Duty drawback cannot be denied when Advance Licenses were invalidated

Tufropes Pvt Ltd. Vs Union of India (Bombay High Court)

One fact very clearly emerges from the documents annexed to the petition and the affidavits is that the advance licences of petitioner were invalidated for direct import of relevant HDPE/P Granules / Chips and petitioner was allowed to procure the same indigenously from Reliance Industries Ltd, Mumbai. The fact that the granules used in the ropes exported had been procured from Reliance Industries Ltd by paying excise duty also is not disputed. The fact that the shipping bills referred to advance licences and that was an error, is also not disputed. In fact in the affidavit in reply of one KGVN. Suryateja affirmed on 20^th December 2011, it is mentioned “it was also observed that in the present advance licences, against which the goods were exported, were issued under Notification No.43/02/Cus dated 19^th April 2002 which exempted all duties of Customs on import of inputs used for the manufacture of export product. The exempted material in the present case for the export product is HDPE granules. As per the licence conditions direct import of inputs was not permitted and petitioner procured the inputs indigenously from Reliance Industries Ltd.” Therefore, it is indisputable that petitioner did not use any HDPE granules procured under the advance licences by direct import but procured the granules from indigenous source, i.e., Reliance Industries Ltd. If that is the factual position, petitioner should be entitled for the drawback. Mr. Jetly in fairness submitted that locally procuring the products on which excise duty is paid and those products are used in manufacture for export goods, the excise duty paid can be claimed as drawback.

In view of the above, the factual position notwithstanding the error in the shipping bills, which an alert petitioner could have amended on time, petitioner will be entitled and should be granted the drawback as it was rightly granted earlier by the DGFT.

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT

1 This petition was admitted by an order dated 16^th July 2012 and interim relief in terms of prayer clause (c) was granted. This petition has been filed under Article 226 of the Constitution of India challenging the legality and validity of order dated 18^th May 2011 passed by respondent no.2.

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