Statutory Provisions:
Sub-section (1) of section 75 provides that where it appears to the Central Government that in respect of good of any class or description manufactured, processed or on which any operation has been carried out in India, being
(1) the goods have been entered for export and an order permitting the clearance and holding thereof for exploration has been made under section 51 by the proper officer, or
(2) the goods have been entered for export by post under section 82 and an order permitting clearance for exportation has been made by the proper officer,
a drawback should be allowed of the duties of customs chargeable under this Act or any imported materials class or description used in the manufacture or processing of such goods or carrying out any operation on such goods, the Central Government may by notification in the Official Gazette, direct that drawback shall be allowed.
Explanation: In this case, the rate of duty is not determined by the officer granting the drawback. Nor is it related to the actual import duty or excise duty paid on the raw materials or the components used in the manufacture of the final product exported. It is, therefore, an average amount determined by the Government having regard to all the circumstances and the facts of the manufacturing industry.
As a corollary to this proposition, it would follow that the rate fixed by the Government would be applicable for a prescribed period only. If there is (a) any variation in the rate of duty paid on the input whether customs or excise duty; (b) variation in the composition of the final product and (c) change in the process of manufacture, the rate of duty already fixed by the Government would not be applicable. It would require to be revised. The fixat ion of a rate of drawback is, therefore a continuous process and the industry availing of such facility of drawback is required to furnish continuously its costing and production data to the organisation entrusted with the responsibility of fixation of rates of drawback.