Pre-deposit Blues - Erroneous drawback is not duty?

Sir,
Learned author made an attempt to conclude that drawback is not duty by citing definition of drawback as provided under Rule 2(a) of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 framed exercising concurrent powers conferred on the government under Section 37 of CE Act,Section 75 of the Customs Act and Section 93A read with 94 of the Finance Act 1994 and also Rule 2(a) of Re-
Export of Imported Goods (Drawback of Customs Duties) Rules, 1995. It is true that drawback in former Rules consists of duty components excise,customs and service tax, while it consists of customs duty component only in the case of latter Rules. Therefore, obviously they cannot be the same. I beg to differ with authors view that drawback is not duty as the said view hits the exporters badly at the time of granting it. It is considered as drawback of duty so as to credit to the applicant exporter instead of being credited to the Fund .It is defined in both Rules that drawback means either rebate of duty or refund of duty. Further Section 27(2)(e) of
the Customs Act ,mandates drawback of duty payable under Section 74 or 75 is to be paid to the applicant exporter instead of crediting the same to the Fund. That means while granting drawback, it takes the form of duty to avoid the sanctioned drawback amount being credited to the Fund. Coming to pre-deposit of drawback as required under Section 129E of the Customs Act,contents of the CBEC circular dt
5.1.2015 are in very much in accordance with the law as the appellate provisions contained Section 128 of the Customs Act are applicable to any decision passed in pursuance of the Customs Act. Further, it may be mentioned that duty drawback under both Rules mentioned above are sanctioned by the Customs Authorities who have to initiate recovery process in case of erroneous drawback sanctioned if any.Thus what is duty when sanctioning needs to be duty while recovery also!.

rrkothapally rrkothapally 30/01/2015