Export drawback cannot be denied for non-delivery abroad, and later drawback rules cannot operate retrospectively.

Export drawback remained available where goods had been taken out of India and export remittances were received, even though the foreign consignee in Russia did not take delivery of the consignments. Alleged defects in foreign landing certificates did not by themselves defeat the statutory drawback entitlement on the facts stated. A later rule under the 1995 Drawback Rules could not be applied retrospectively to exports made in 1993-94, so it did not support denial of drawback or confiscation. On that basis, the disallowance, appropriation and confiscation were not sustainable.

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Issues: Whether drawback could be denied and confiscation ordered in respect of 9 shipments of ladies garments which had been exported out of India but not delivered to the intended foreign consignee in Russia.

Analysis: The governing drawback scheme treated export as taking goods out of India to a place outside India, and drawback as a refund connected with such export. Once the goods had crossed Indian territory and the remittances had been received, the absence of delivery in Russia, or any alleged irregularity in the foreign landing certificates, did not by itself displace the statutory entitlement to drawback. The order also rested on Rule 16A of the 1995 Drawback Rules, but those rules were held not to operate retrospectively so as to govern exports made in 1993-94. The record did not disclose any statutory basis sufficient to sustain denial of drawback or confiscation on the facts found.

Conclusion: The appellant was entitled to drawback on the 9 consignments, and the disallowance, appropriation, and confiscation could not be sustained.

Final Conclusion: The appeal succeeded and the impugned order was set aside.

Ratio Decidendi: Drawback cannot be denied for exports that have taken goods outside India merely because the foreign consignee did not take delivery, and a later delegated rule cannot be applied retrospectively to defeat an export drawback claim arising before its commencement.

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