Duty drawback cannot be denied for missing invoice disclosure where the duty burden was included in the purchase price.

Customs duty drawback cannot be denied merely because the invoice does not separately disclose the duty component where the supplier has paid customs duty and social welfare surcharge on imported inputs and the buyer has paid a price inclusive of that burden. The statutory presumption of passing on the duty burden under Section 28D of the Customs Act operates in the buyer's favour unless rebutted, and no separate invoice disclosure requirement is shown under the Customs Act, 1962 or the Drawback Rules, 2017. An omission in the drawback statement, if inadvertent, does not defeat substantive entitlement. Brand rate drawback was therefore available on the duty and surcharge embedded in the purchase price.

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Issues: Whether the petitioner was entitled to duty drawback on customs duty and social welfare surcharge paid by its EOU supplier and included in the price of goods sold to the petitioner, and whether the authorities were justified in rejecting the drawback claim for want of a separate invoice disclosure of customs duty.

Analysis: The supplier had paid customs duty and social welfare surcharge on the imported inputs used in the goods cleared to the petitioner and had issued declarations and invoices stating that the duty burden was included in the sale price. The Court held that, once the supplier had paid the duty and the petitioner had paid the price inclusive of that duty, the incidence of duty was borne by the petitioner. The presumption under Section 28D of the Customs Act, 1962 operated in favour of passing on the duty burden to the buyer unless the contrary was proved. The authorities erred in insisting that the customs duty must be separately reflected in the invoice, because no such requirement was shown under the Customs Act, 1962 or the Drawback Rules, 2017. The petitioner's omission in the drawback statement was treated as an inadvertent mistake and not a ground to deny substantive entitlement.

Conclusion: The rejection of the drawback claim was unsustainable and the petitioner was held entitled to brand rate drawback on the customs duty and surcharge borne through the purchase price.

Final Conclusion: The impugned orders were quashed and the petitioner's drawback applications were directed to be sanctioned in accordance with law.

Ratio Decidendi: Where customs duty paid by a supplier forms part of the sale price charged to the buyer, the duty incidence is presumed to have been passed on to the buyer, and drawback cannot be denied merely because the invoice does not separately disclose the customs duty component.

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