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2016 (5) TMI 557 - SUPREME COURT

2016 (5) TMI 557 - SUPREME COURT - 2016 (336) E.L.T. 10 (SC) - Entitlement of benefit under Notification No. 07/2002-2007 dated 05.06.2002 - DEPB benefit in lieu of drawback claimed - Supplies from DTA to SEZ units - Held that:- by reproducing the language of Notification dated 05.06.2002, it uses the expression that the Central Government hereby amends/corrects the Export and Import Policy 2002-2007. Thus it is, clear that insofar as the amendment is concerned, that was made effective by the is .....

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laim benefit of DEPB in lieu of drawback for supplies made to SEZ or unit in SEZ. - Insofar as the Circular No. 25/2003 dated 01.04.2003 is concerned, it is only administrative in nature. It prescribed the procedure/requirements that were to be fulfilled for claiming the benefit of DEPB in lieu of drawback. By administrative circular, notification dated 05.06.2002 which was passed under Section 5 of the Act, could not be altered as that would amount to amendment of the notification and it w .....

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Appellant : Mr. Rauf Rahim, Adv. Mr. Abhijat P. Medh, Adv. Ms. Poulami Das, Adv. For the Respondent : Mr. R. Balasubramanian, Adv. Ms. Kiran Bhardwaj, Adv. Mr. Pranav Kumar, Adv. Mr. Santosh Kumar, Adv. Mr. M. K. Maroria, Adv. Ms. Kiran Bhardwaj, Adv. Mr. C. K. Makker, Adv. Mr. V. K. Verma, Adv. JUDGMENT A. K. Sikri, J. This appeal, filed by the appellant-assessee, challenges the correctness of orders dated 03.11.2004 passed by the High Court of Gujarat in Special Civil Application No. 11755 of .....

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of the Foreign Trade (Development and Regulation) Act, 1992 (hereinafter referred to as 'Act'). It is not in dispute that this Policy is statutory in nature. The Act also empowers the Central Government to amend, modify or rescind such policy. Exercising this power which is conferred by Section 5 of the said Act, Notification No. 7/2002-2007 dated 05.06.2002 was issued amending/correcting the EXIM Policy. By this Notification, amendments were made to paragraph 7.9 of the EXIM Policy. Sin .....

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ed to paragraph 7.9(I). The text of the new sub paragraph would be: - (iv) Benefit of DEPB in lieu of Drawback for supplies made to SEZ or unit in SEZ. Accordingly the amended para 7.9(a)(1) would read as under: 7.9(a) Supplies from DTA to SEZ units shall be eligible for the following: (I) DTA supplier shall be entitled for: - (i) Relevant entitlements under paragraph 8.3 of the policy. (ii) Discharge of export performance, if any, on the supplier; (iii) Benefit of DEPB in lieu of Drawback for s .....

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these were to be treated as exports and entitled to Drawback under the EXIM Policy. However, what was stipulated by the said Notification was that the concerned person making such 'exports' can avail the benefit of DEPB in lieu of Drawback. In order to allow the aforesaid benefit of DEPB in lieu of drawbacks, the Customs Department issued Circular No. 25/2003 dated 01.04.2003. This circular laid down the procedure that has to be followed for availing the benefits. Paragraph 2.5 thereof, .....

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the Customs Act shall be controlled by the Commissioner of Customs with the assistance of proper officers of Customs. The goods entered into the SEZ from the DTA shall be under the cover of a Bill of Export. This Bill shall be registered in the SEZ Customs formation and assigned a running serial number. Thereafter the goods shall be examined by the Customs Officers posted in the SEZ like a normal export consignment. These goods shall be eligible for DEPB benefit & the DEPB scrips shall be i .....

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o claim benefits thereunder as, as per the aforesaid notification, these were to be treated as exports. These supplies were admittedly made after 05.06.2002 but before 01.04.2003. The appellant claimed benefit of DEPB in lieu of drawback for those supplies by application dated 26.05.2003. The request was, however, turned down on the ground that Circular No. 25/2003 came into effect only from 01.04.2003 and, therefore, the exports made before the said date were not eligible for DEPB benefits. The .....

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uld not be eligible for such a benefit of DEPB. In arriving at this conclusion, the High Court has held that since there was no procedure prescribed prior to the issuance of the circular which came into force from 01.04.2003, the intention was to give the benefit to the exporters from financial year starting from 01.04.2003 and, therefore, corresponding notification was issued only w.e.f. 01.04.2003. The aforesaid reasons given by the High Court are clearly flawed and not in accordance with law. .....

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