Duty Drawback cannot be denied when goods to be re-exported were brought in the Customs area within stipulated time even if Let Export Order is issued later
Oil And Natural Gas Corporation Ltd.(the Appellant) filed shipping bills for re-export of various machineries (impugned goods) imported for exploration purposes and claimed Drawback of the duty paid at the time of import. The Drawback claim was denied on the premise that out of 25 shipping bills, for 13 shipping bills Let Export Order (LEO) have been issued beyond the period of 36 months from the clearance for home consumption of the impugned goods.
Being aggrieved, the Appellant preferred an appeal before the Hon’ble CESTAT, Mumbai wherein the Appellant contended that they had filed the shipping bills within 36 months of the date of clearance of the impugned goods and the goods were brought to the Customs area within such time period in terms of the Notification 19/1965-Customs dated February 6,1965.
On the other hand, the Revenue contended that in terms of Notification No. 33/1994-Customs (NT) dated July 1, 1994 read with Section 74 of the Customs Act, 1962 (“the Customs Act”), the Commissioner of Customs has the power to allow Drawback when the goods are entered for export within three years from the payment of duty on the importation. In the instant case, the impugned goods were entered for export after issuance of LEOso the relevant date is the date of LEO and as the same is beyond the period specified in Section 74 of the Customs Act, Drawback claim has rightly been rejected.
It was held by the Hon’ble CESTAT, Mumbaithat when the impugned goods are in the control of the Customs and the same has been entered in the Customs area for export, it is immaterial when LEO has been issued.
It was further observed that in most of the cases, goods entered in the Customs area, loaded in the vessel and the vessel is sailed before the issuance of LEO and LEO has been obtained later on. In those cases, the date of export was taken by the Department as the date when goods were entered in the Customs area.
Accordingly, when the impugned goods entered in the Customs area for export, the said date is to be termed as date for consideration under Section 74 of the Customs Act. Since in the instant case, all the shipping bills and the impugned goods have been brought in the Customs area within 36 months from the date of clearance of the home consumption, the Appellant is entitled for Drawback claim.