TMI Blog2017 (8) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e difficulties expressed and also looking into the gravity of the matter, so also the demand of ₹ 87,26,869/- may cause prejudice to interest of justice, the order dt. 26.6.2015 is recalled to grant an opportunity of hearing to the appellant on merit. 3. In the circumstances, the matter, once again came up for hearing before this forum on 24.07.2017. The appellant was represented by Shri Zaffarullah Khan, Advocate. Ld. Counsel submits that the impugned order is required to be set aside even on the preliminary ground that the same had been passed in spite of the fact that W.P.No.38245/2002 filed by the appellant was pending in the High Court of Madras. On merits, the learned advocate made oral submissions which can be summarized as under : (i) The goods had been imported by the appellant under Notification No.32/1997 for execution of export order placed on the appellant by supplier of goods for jobbing. The said notification provided for full exemption from customs duty and additional duty of customs, for such imported goods subject to certain conditions. Nowhere in the notification was there any condition that importer would not claim DEPB while causing reexport of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition was challenging vires of Boards circulars, whereas the adjudication proceedings were only for a limited purpose of adjudging the allegation made against the appellant in the SCN dt.06.02.2003 with respect to disputed DEPB credit availed to the extent of ₹ 87,26,869/-. We therefore do not find any impropriety in the adjudicating authority having proceeded with the adjudication on the basis of records in view of the fact appellant chose not to appear for personal hearing on four occasions. 5.1 Sample copies of shipping bills and export invoices available in the records have been seen by us. In respect of shipping bill dt. 1.5.2002 on page 39 of the appeal file involving export of ladies leather sandal shoe uppers[POST SHPMT]the total value declared by the exporter for DEPB items is US$ 10695.1494. Corresponding invoice No.012/SU/2002-2003 found in pages 41 to 43 of the appeal file reveals that C AF of the same consignment related to this shipping bill has been at 11185.65 US$. Thus the value declared by appellant for DEPB is the entire value declared in the corresponding invoice. This is the pattern followed in all the sample invoices, and export documents submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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. The credit shall be available against such export products and at such rate as may be specified by the Director General of Foreign Trade by a Public Notice issued in this behalf. Any item except those appearing in the Negative List of Imports shall be allowed for import without payment of basic customs duty special duty of customs as well as additional duty of customs, against the credit under a Duty Entitlement Pass Book (DEPB). The holder of Duty Entitlement Pass Book (DEPB) shall have the option to pay additional customs duty, if any, in cash as well. . . Types of DEPB 7.29 DEPB may be issued on : (a) Post export basis and (b) Pre export basis DEPB on post Exports basis 7.30 DEPB on post-export basis shall be granted against exports already made. 5.5 Thus it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one 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 the FOB value of exports. The DEPB rate was applied on the FOB value or FOB cap whichever was lower. 5.7 Interestingly, the very issue in this dispute was addressed by the 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 32/97 and 34/97 (DEPB scheme) are exclusive and independent of each other. Extract of the CBEC circular is reproduced herein below for ready reference, with emphasis added in some places: Circular No. 26/2002-Cus., dated 16-5-2002 F. No. 605/55/2002-DBK Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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, New Delhi Subject : Wrong availment of DEPB/Drawback benefit in respect of exports where imports were made without payment of customs duty under notification No. 32/97-Cus. dated 1-4-1997 regarding. Kind attention is invited to DOR Circular No. 26/2002-Cus. dated 16-5-2002 on the subject issue where customs field formations were alerted about cases involving unintended/double benefit in the form of duty free import of inputs under Customs Notification No. 32/97 and also involving availment of DEPB benefit at the time of export. 2. It is given to understand that some unscrupulous exporters have availed? simultaneous benefits of duty free import of inputs in terms of 32/97-Cus. as well as duty drawback. Duty Drawback is available w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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