- (1.) The petitioner is a public limited company having its office at Ludhiana and factory premises at Jitwal Kalan. The petitioner has installed a refinery for refining of crude edible oil into finished edible oil. The petitioner is also registered under Vegetable Oil Products (Regulation) Order, 1998 with the Directorate of Vanaspati, Vegetable Oils and Fats for manufacturing of refined vegetable oils with annual installed capacity of 23,040 Metric Tonnes. The import and export is governed and controlled by Foreign Trade (Development and Regulation) Act, 1992. The Central Government in terms of provisions of Section 3 of the Act has power to make provisions relating to import and export. The Government has power to prohibit, restrict or regulate the import or export of any goods. The Government under Section 5 of the Act has also power to issue policy to achieve the objectives of the said Act. Sections 3 and 5 of the Act are reproduced as under : "Section 3. Power to make provisions relating to imports and exports. - (1) The Central Government may, by Order published in the Official Gazette, make provision for the development and regulation and foreign trade by facilitating imports and increasing exports. (2) The Central Government may also, by Order published in the Official Gazette, make provision for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by or under the Order, the import or export of goods. (3) All goods to which any Order under sub-section (2) applies shall be deemed to be goods the import or export of which has been prohibited under section 11 of the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly. Section 5. Export and Import Policy. - The Central Government may from time to time, formulate and announce by notification in the Official Gazette, the export and import policy and may also, in like manner, amend that policy."
(2.) In terms of the provisions of Foreign Trade Policy import and export of all goods have been classified into three categories, i.e., free, restricted and prohibited. The prohibited goods cannot be imported at all, however, restricted goods can be imported and exported subject to compliance of restriction. Any body on payment of duty, if leviable can import freely importable goods.
(3.) With the intention to promote export, Government has declared different incentive schemes under Customs Act and Foreign Trade Policy. Advance authorization is one of the policies declared under Foreign Trade Policy and duty drawback is under the Customs Act, 1962. As per advance authorization, goods can be imported without payment of duty and as per drawback scheme, refund of duties paid at the time of import is granted to the exporter. Section 75 of the Customs Act, 1962 dealing with drawback is reproduced as under : "Section 75. Drawback on imported materials used in the manufacture of goods which are exported. - (1) Where it appears to the Central Government that in respect of goods of any class or description, (manufactured or processed or on which any operation has been carried out in India) (being goods which have been entered for export and in respect of which an order permitting the clearance and loading thereof for exportation has been made under Section 51 by the proper officer,) (or being goods entered for export by post under Section 82 and in respect of which an order permitting clearance for exportation has been made by the proper officer), a drawback should be allowed of duties of customs chargeable under this Act on any imported materials of a 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 in respect of such goods in accordance with, and subject to the rules made under sub-section (2) : Provided that no drawback shall be allowed under this sub-section in respect of any of the aforesaid goods which the Central Government may, by rules made under sub-section (2), specify, if the export value of such goods or class of goods is less than the value of the imported materials used in the manufacture or processing of such goods or carrying out any operation on such goods or class of goods, or is not more than such percentage of the value of the imported materials used in the manufacture or processing of such goods or carrying out any operation on such goods or class of goods as the Central Government may, by notification in the Official Gazette, specify in this behalf : Provided further that where any drawback has been allowed on any goods under this sub-section and the sale proceeds in respect of such goods are not received by or on behalf of the exporter in India within the time allowed under the Foreign Exchange Management Act, 1999 (42 of 1999), such drawback shall be deemed never to have been allowed and the Central Government may, by rules made under sub-section (2), specify the procedure for the recovery or adjustment of the amount of such drawback. (1A) Where it appears to the Central Government that the quantity of a particular material impelled into India is more than the total quantity of like material that has been used in the goods manufactured, processed or on which any operation has been carried out in India and exported outside India, then, the Central Government may, by notification in the Official Gazette, declare that so much of the material as is contained in the goods exported shall, for the purpose of sub-section (1), be deemed to be imported material. (2) The Central Government may make rules for the purpose of carrying out the provisions of sub-section (1) and, in particular, such rules may provide - (a) for the payment of drawback equal to the amount of duty actually paid on the imported materials used in the manufacture or processing of the goods or carrying out any operation on the goods or as is specified in the rules as the average amount of duty paid on the materials of that class or description used in the manufacture or processing of export goods or carrying out any operation on export goods of that class or description either by manufacturers generally or by persons processing or carrying on any operation generally or by any particular manufacturer or particular person carrying on any process or other operation, and interest if any payable thereon; (aa) for specifying the goods in respect of which no drawback shall be allowed; (ab) for specifying the procedure for recovery or adjustment of the amount of any drawback which had been allowed under sub-section (1) or interest chargeable thereon; (b) for the production of such certificates, documents and other evidence in support of each claim of drawback as may be necessary; (c) for requiring the manufacturer or the person carrying on any process or other operation to give access to every part of his manufactory to any officer of customs specially authorized in this behalf by the Assistant Commissioner of Customs or Deputy Commissioner of Customs to enable such authorized officer to inspect the processes of manufacture, process or any other operation carried out and to verify by actual check or otherwise the statements made in support of the claim for drawback. (d) for the manner and the time within which the claim for payment of drawback may be filed; (3) The power to make rules conferred by sub-section (2) shall include the power to give drawback with retrospective effect from a date not earlier than the date of changes in the rates of duty on inputs used in the export goods.";