Summary
Goods supplied in India to a project financed by an international agency under the applicable export policy qualified as deemed exports and were eligible for duty drawback. Because the drawback claims were refunded after substantial delay, the supplier was entitled to interest at the rate fixed for the relevant period.
Issues
- Whether the supplies to the project qualified as deemed exports under the 1992–1997 Exim Policy and were eligible for duty drawback.
- Whether interest was payable on the delayed drawback refund and at what rate.
Provisions considered
- Chapter X; Sections 121 and 122, Export and Import Policy, 1992–1997The supplies were deemed exports because the goods were manufactured in India, paid for in rupees, and supplied to an eligible internationally financed project; the policy allowed drawback benefits. (¶ 31-35)
- Sections 27(1), 27A and 75A(1), Customs Act, 1962The delayed drawback refund attracted interest after three months; the applicable rate was the 15% rate fixed by the Central Government at the time. (¶¶ 32, 35-39)
- Rules 3 and 14, Duty Drawback Rules, 1995The Rules authorize drawback on eligible supplies and provide for payment of drawback and interest. (¶ 34-35)
Held
- The supplies to the project fell within the policy definition of deemed exports and qualified for drawback; the entitlement was not a concession. (¶ 31-35)
- The claims were filed in 1996, approved in 2002 and paid in 2003. Under Section 75A read with Section 27A, interest was payable after the three-month period at the then-applicable rate of 15% per annum. (¶ 35-39)
Result
The appeal was dismissed and the High Court judgment awarding interest was affirmed.