Drawback on imported materials used in the manufacture of export goods [Section 75] :

The drawback under section 75 is on a totally different footing. The following important aspects should be remembered in this regard:

(i) The goods exported are entirely different from the inputs.

(ii) The input could be either imported goods on which duty of customs has been paid or indigenous goods on which central excise duty has been paid.

(iii) The existence of the imported/indigenous excise duty paid goods in the final product is not capable of easy verification at the point of export.

(iv) The goods, namely the inputs might have undergone changes in physical shape, property etc.

(v) The quantity of inputs per piece of final product may not be uniform and may not also be capable of verification at the time of exportation.

The underlying principle of the drawback under section 75 is that, the Government fixes a rate per unit of final article to be exported out of the country as the amount of drawback payable on such goods. This amount is dependent upon prior verification of the mode of manufacture, the quantum of raw material required, the average content of duty paid articles in the final product and lastly, the standardization of the final product conforming to these norms.