CBZ Ltd. manufacturer of garments during the month of March, 2020 had exported the following brands/products to the customer in Germany : Product FOB value of goods Exported Amount (₹) Market Price of goods exported Amou

As per Rule 9 of the Customs and Central Excise Duties Drawback Rules, 2017, the drawback amount or rate determined under rule 3 of the said rules shall not exceed one third of the market price of the export product. In the present case, duty drawback amount @ 30% of ₹ 4,30,000 = ₹ 1,29,000. However, duty drawback is to be restricted to 1/3 of the market price of the goods exported being 1/3 of ₹ 3,50,000 = ₹ 1,16,667. As per 1st proviso to Section 75 of the Customs Act, 1962, no drawback shall be allowed in case the export value of goods is less than the value of imported goods used in the manufacture or processing of export goods. In the present case, assuming that Product B underwent manufacturing operation in India, as the export value i.e. FOB value of the goods ₹ 6,00,000 is less than the value of imported materials of ₹ 8,00,000 used therein, no drawback should be granted. Alternatively, if Product - B is imported and the same product is exported without any manufacturing operation carried out on the same, no duty drawback is admissible under section 75 of the Customs Act, 1962 as the said provision envisage carrying out manufacturing or processing of imported inputs. As per Rule 3 of the Customs and Central Excise Duties Drawback Rules, 2017, no duty drawback shall be allowed, if the said goods are produced or manufactured, using imported materials or excisable materials in respect of which duties have not been paid. In case of Product C, since it is manufactured out of duty free inputs, no duty drawback is allowed on export of Product C.