TaxTMI 
TaxTMI 
2017 (8) TMI 500
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the job worked goods and allegedly availed ineligible DEPB credit. Accordingly, proceedings were initiated against the appellant which culminated in the issue of the impugned order dt. 25.03.2005, wherein the adjudicating authority denied the DEPB benefit to the appellant, demanded Rs. 87,26,869/- towards irregularly claimed DEPB credit along with interest thereon and also imposed penalty of Rs. 20 lakhs under Section 114 (i) of the Customs Act, 1962. Aggrieved, the appellants have filed this appeal before this forum. 2. It is seen that in the first stage of litigation before this forum that the appeal had been initially rejected by this Tribunal vide Final Order No.40914/2015 dt. 26.6.2015. Appellant filed application for restoration of appeal vide an application No.C/ROA/40215/2016, dated 06.04.2016 which was allowed by this Tribunal, by Order No.40427-40428/2016 dt. 29.9.2016, inter alia, on the following findings: "5. There is no doubt at all that the order dt. 26.6.2015 was passed by Tribunal exparte in absence of appellant who makes the above grievance for non-service of the intimation for appearance. 6. Considering the difficulties expressed and also looking into the gr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the consignments. (ii) Appellants have claimed DEPB benefit only on the export invoice value (iii) There is no evidence that appellants have used any duty paid inputs in the products exported. (iv) DEPB credit is intended to compensate the incidence of customs duty on the import content of the export product. When the import goods have not suffered any duty whatsoever as they had been imported under Notification No.32/97, there can be no question of DEPB credit on the export goods. 5. Heard both sides and have gone through the facts of the case. In the first place, the appellants have contended that the impugned order is liable to be set aside since it has been passed in spite of a writ petition filed by the appellant in the High Court of Madras. On a closer analysis however, what emerges is that the appellant had filed W.P.No.38245/2002 before the Honble High Court challenging the Boards circular No.26/2002 dt.16.5.2002 and 54/2002 dt.27.8.2002 which had been admitted by the Honble High Court. We are unable to appreciate any connection between these two proceedings. The writ petition was challenging vires of Boards circulars, whereas the adjudication proceedings were only f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s were incorporated into the Duty Drawback Schedule with effect from 1 October 2011. 5.4 During the relevant period of the dispute, the DEPB scheme provisions were given in para-7.25 onwards of the Export and Import Policy 1997-2002. Paras7.25, 7.29 & 7.30 are found to be relevant to the dispute in this appeal which are as under : Duty Entitlement Pass Book 7.25 The objective of Duty Entitlement Pass book Scheme is to neutralise the incidence of basic customs duty on the import content of the export product. The neutralisation shall be provided by way of grant of duty credit against the export product. The duty credit under the scheme shall be calculated by taking into account the deemed import content of the said export product as per Standard Input Output Norms and determine basic customs duty payable on such deemed imports. The value addition achieved by export of such product shall also be taken into account while determining the rate of duty credit under the Scheme. Under the Duty Entitlement Pass Book (DEPB) Scheme, an exporter shall be eligible to claim credit as a specified percentage of fob value of exports made in freely convertible currency.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cation, 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. Apart from providing for different DEPB rates for different types of exported goods, a value cap was also applicable which was with respect to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rt consignments where benefit of Customs Notification No. 32/97 was taken at the time of import, it should be made mandatory for the party to declare this fact on the body of the shipping bill along with details of materials as imported free of duty under 32/97. 4. Suitable tradenotice and standing orders for the guidance of trade and staff may respectively be issued. 5.8 It is, further noted that CBEC issued a subsequent circular on the issue wherein mention was made of unscrupulous exporters having availed simultaneous benefit of duty free import of inputs in terms of Notification No.32/97-Cus. as well as duty drawback on the same lines as clarified in earlier circular No.26/2002. CBEC clarified that duty drawback is also available only where the inputs gone into the manufacture of export product have suffered customs/export duty. Since for goods imported under Notification No.32/97, no customs duty is paid, such goods becomes disentitled to drawback. The relevant portion of the circular is reproduced below:- Circular No. 54/2002-Cus., dated 27-8-2002 F.No. 605/55/2002-DBK Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, Ne....