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2017 (8) TMI 500 - AT - CustomsDEPB Benefit - job-work - suppression of facts - N/N. 32/97 - Held that: - the DEPB scheme did not envisage grant of duty credit only on the value addition portion, in a situation where the import content did not suffer incidence of customs duty. Therefore goods imported with full customs duty exemption or goods with NIL rates of customs duty cannot then become eligible for DEPB credit when processed and resultant product reexported even if there is value addition in the export product. The appellant has imported goods with full exemption from customs duties under Notification No.32/1997-Cus, which is a specific exemption to goods imported for execution of an export order for jobbing. Amongst various conditionalities of that notification, there is a requirement that the imported goods are utilized only for the discharge of export obligation and that FOB value of the resultant products exported is at least 10% more than the CIF value of the goods imported. We therefore find that the Notification No.32/97 is a beneficial provision to facilitate such processes involving jobbing without creating the need for the job worker in India to suffer incidence of customs duties on the imported goods. Precisely due to the requirement that import content of export goods have to necessarily suffer incidence of customs duty for claiming DEPB credit, the said notification No.32/97-Cus also laid down that DEPB was not applicable to export of a commodity or product, interalia, manufactured and or exported by a 100% EOU or by an unit in a free trade zone or export processing zone etc. In fact, even in the case of export of goods of foreign origin, DEPB is made inapplicable, unless the goods have been manufactured or processed or on which similar operations have been carried out in India. CBEC in their Circular No.26/2002 dt. 16.5.2002, which unequivocally clarified that once the party has availed the benefit of Customs Notification No.32/97, then they become disentitled to DEPB benefit and that the facility available under N/N. 32/97 and 34/97 (DEPB scheme) are exclusive and independent of each other - Both these circulars have been issued based on complaints or detection of ineligible availments of both the N/N. 32/97 and N/N. 34/97 (DEPB/drawback) noted by CBEC. Hence these circulars will definitely have retrospective effect. Demand upheld - penalty reduced to ₹ 10,00,000/- - decided partly in favor of appellant.
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