Customs Act, 1962 › Chapter X — Drawback

Section 75. Drawback on imported materials used in the manufacture of goods which are exported

Customs Act, 1962

Bare Act

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, 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 clause (a) of section 84 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 except under such circumstances or such conditions as the Central Government may, by rule, specify, 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 imported 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 out any process or other operation to give access to every part of his manufactory to any officer of customs specially authorised in this behalf by the Assistant Commissioner of Customs or Deputy Commissioner of Customs to enable such authorised 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.

Judgments on Section 75

  • Haji S International vs Commissioner Of Customs-Air Cargo… — CESTAT, 30 Apr 2026. Where the repealing 2017 Drawback Rules contain a specific saving provision in rule 20(2), section 159A of the Customs Act does not apply, and recovery of drawback under rule 16 or 16A of the repealed 1995 Rules cannot…
  • Isgec Heavy Engineering Ltd vs Commissioner, Customs (Export)-New… — CESTAT, 16 Oct 2025. The FOB/transaction value of exported goods cannot be modified by any customs officer; re-determination under the Valuation Rules only fixes the assessable value, and drawback payable as a percentage of FOB must be…
  • Manasa Impex Services vs Commissioner Of Customs And Central Excise, Coimbatore) With — CESTAT, 21 Aug 2025. A customs broker's failure to perform duties under CHALR attracts disciplinary action under CHALR alone; a penalty under section 114 of the Customs Act requires proof of abetment or active collusion — involvement beyond…
  • Rajbir Singh vs Union Of India & Ors. — Delhi High Court, 8 Apr 2025. Where Rule 16 of the Duty Drawback Rules prescribes no period of limitation, the general three-year limitation cannot be presumed to apply by default, especially where there are strong suspicions of fraudulent availment…
  • M/S Kanushi Enterprises vs Union Of India & Ors. — Delhi High Court, 13 Feb 2025. Mere unlocking/activation of a mobile phone before export is mere 'configuration' of the product for the destination territory and does not constitute 'taken into use' under the proviso to Rule 3 of the Duty Drawback…
  • Hemant Bohra vs Commissioner Of Customs-Nhava Sheva -… — CESTAT, 26 Aug 2024. Drawback provisions being an incentive-oriented scheme for augmenting exports, procedural requirements such as Rule 13(1)(a) documentation and Section 149 shipping bill amendment must receive a liberal construction and…
  • Yash Pakka Limited vs Lucknow Prev — CESTAT, 14 Feb 2024. Under Section 149 of the Customs Act, 1962, a shipping bill may be amended or converted even after export if supported by documentary evidence in existence at the time of export, and a circular's self-imposed time limit…
  • Union Of India vs M/S. B.T. Patil And Sons Belgaum… — Supreme Court of India, 5 Feb 2024. Where duty drawback on a deemed export is not refunded within three months of the claim, the claimant is statutorily entitled to interest under Section 75A(1) of the Customs Act at the rate fixed under Section 27A (15%…
  • Seco Tools India (P) Ltd vs Commissioner Of Customs-Air Cargo… — CESTAT, 29 Sep 2022. A Board circular cannot curtail the amendatory power under section 149 of the Customs Act, 1962 by imposing time limits or restrictions not contemplated in the parent statute, so a request for conversion of shipping…
  • M/S.Jai Logistics Services Pvt. Ltd vs The Principal Commissioner Of Customs — Madras High Court, 12 Jun 2020. Failure of the Inquiry Officer to communicate the inquiry report within the 90-day period stipulated in Regulation 17(5) of the CBLR, 2018 — even after reckoning the COVID-19 extension under Notification G.S.R.601(E)…
  • M/S Jairath International And Another vs Union Of India And Others — Punjab-Haryana High Court, 4 Oct 2019. The customs department has no power under Rule 16 of the Drawback Rules, 1995 or the Valuation Rules, 2007 to re-assess a shipping bill duly assessed at the time of export, because goods already exported are not 'export…
  • Himalyani Gupta vs Commissioner Of Customs (Air Cargo… — CESTAT, 24 Aug 2026. Section 113 authorises confiscation of only 'export goods' (section 2(19)) — once goods are exported they cease to be export goods and become exported goods — so penalties under sections 114 and 114AA cannot stand…
  • Charan Singh Surjit Singh Gujral vs Union Of India And Ors — Bombay High Court, 15 Apr 2026. On a conjoint reading of Sections 54 and 56 of the CGST Act, the Department must process export IGST refunds in a time-bound manner and delayed refunds attract interest under Section 56, even where the Department claims…
  • Anil Kapoor vs Niranjan Subudhi — Delhi High Court, 28 Jun 2025. The Settlement Commission constituted under the Customs Act, 1962 can grant immunity only from prosecution and penalty under the Customs Act in cases involving the levy, assessment and collection of customs duty, and…
  • John Deere India P Ltd vs Commissioner Of Customs-Pune — CESTAT, 13 Dec 2024. Where shipping bills are converted under section 149 of the Customs Act, 1962, the date of export for computing limitation under the Drawback Rules, 2017 must be deemed to be the date of conversion, not the original let…
  • Ms Yash Pakka Limited vs C.C. Lucknow — CESTAT, 23 Aug 2023. A request under Section 149 of the Customs Act, 1962 for conversion of free shipping bills into drawback shipping bills cannot be rejected without affording the exporter an opportunity of hearing — an order passed…
  • Jindal Drugs P Ltd vs Commissioner Of Customs -Nhava Sheva -… — CESTAT, 15 Dec 2022. A request to amend a shipping bill under section 149 of the Customs Act, 1962 should be permitted unless established evidence exists that the goods were not in conformity with the details furnished in the shipping bill,…
  • Posco Maharashtra Steel Pvt Ltd vs The Commissioner Of Customs-Mumbai… — CESTAT, 7 Dec 2022. An amendment request under section 149, Customs Act, 1962, may be refused only for sufficient reason after notice and hearing; ascertainability of the facts at the time of export — not mere lapse of time under a…
  • Numinous Impex (I) Pvt. Ltd vs The Commissioner Of Customs — Madras High Court, 8 Apr 2022. Where the All Industry Rate of duty drawback is identical under both the CENVAT-availed and CENVAT-not-availed columns of the drawback schedule, the exporter has not claimed a 'higher rate of drawback', and mere claim…
  • M/S Sultan Tanneries And Leather Products vs Union Of India And 3 Othes — Allahabad High Court, 7 Apr 2022. An officer appointed by the Board as common adjudicating authority remains a 'proper officer'/officer of Customs competent to adjudicate the show cause notice assigned to him, and there is no right to cross-examine…

All 28 judgments