Judgment

SABYASACHI MUKHARJI, J.-This appeal under Section 130-E(b) of the Customs Act, 1962 (hereinafter called the Act) is directed against the order dated July 14, 1987 of the Customs Excise and Gold (Control) Appellate Tribunal (hereinafter called CEGAT). By the impugned order the Tribunal allowed the appeal of the respondent.

2. On June 7, 1980 the respondent M/s Sun Industries of Calcutta had shipped 6000 bundles containing 1,00,000 sets of plywood panels for tea chests on the M. V. Mohur Gang. The shipment of the said goods was intended for delivery at Colombo under claim for drawback on the said goods under Section 75 of the Act against shipping bill. On June 20, 1980 on proceeding to the voyage after shipment of the goods, the ship developed engine trouble on the way and returned back and ran aground in Indian territorial waters at the port of Paradeep. The fitting stores and cargo vessel had been salvaged into India under the supervision of Port Trust, Paradeep. The respondent thereafter applied for drawback under Section 75 of the Act. By an order dated October 25, 1986, the Assistant Collector of Customs rejected the claim for drawback on the said goods under Section 75 of the Act read with Section 2(18) and Rule 2(c) of the Customs and Central Excise Duties Drawback Rules, 1971. Being dissatisfied the respondent appealed to the Appellate Collector of Customs, Calcutta. By the order dated February 12, 1981 the Appellate Collector rejected the appeal holding that the ship ran aground in territorial waters of India, therefore, the said goods could not be deemed to have been exported. Dissatisfied with the said order the respondent preferred a revision under Section 131 of the Act. The revision petition was thereafter transferred to the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi.

3. Section 75 of the Act provides drawback on imported materials used in the manufacture of goods which are exported. The said section reads as follows :

75(1) Where it appears to the Central Government that in respect of goods of any class or description manufactured 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 of 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).

(1-A) 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 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 of 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 of export goods of that class or description either by manufacturers generally or by any particular manufacturer ;

(b) for the production of such certificates, documents and other evidence in support of each claim of drawback as may be necessary ;

(c) for req