1991 (12) TMI 75

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....987. After clearance, the said crank shaft was found to be defective. Therefore, the same was re-exported under a free shipping Bill (and not under drawback claim under Section 74 of the Customs Act, -1962). The free replacement against the said shaft was received by them in March, 1988 on which also they had to pay duty. Since it resulted in double payment, they asked for refund of duty on 10-6-1988 for Rs. 2,27, 871/- as stated in their Advocate's letter dated 7-9-1991 but the concerned authorities informed the respondents that they should have claimed drawback under Section 74. Thereafter, they approached the drawback department and filed a drawback claim with the Asstt. Collector (Drawback). The drawback claim filed by them was rejected....

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....eference to the description of goods imported, as provided under Section 74; (b) the claim for drawback should not exceed the prevailing market price of the goods exported (vide Section 76 of the Customs Act, 1962). 2. In so far as the first ingredient is concerned, Government accepts the reasoning of the Collector (Appeals) and hold that the goods exported were the same as imported originally. However, it is in regard to the second ingredient that difficulty arises in this case. The respondents filed a free shipping bill and would no doubt have enclosed other related documents such as approval of the RBI etc. But, it may be noted, that the value given in the documents seeking permission from the RBI is for the purposes of foreign exc....

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....rpose of foreign exchange regulations requirements and not at all the market price. 4. It may sometimes happen after the goods have been cleared out of customs charge, these are found to be defective at importers premises. The market value (often referred to as 'salvage value') in such cases, in terms of Section 76, needs to be ascertained, before drawback claim is considered. The position would have been different if the salvage value of the defective crank shaft at the time of export was declared and verified [Reference 1986 (25) E.L.T. 104 (Tribunal)]. In that case if the value was higher than drawback claim it could be sanctioned if otherwise in order. But for the Collector (Appeals) to hold that the PMV was irrelevant is an uncalled....