2002 (10) TMI 485 - HC - Customs

Summary

Issues Involved:
1. Entitlement to avail credit of customs duties under the 'passbook' scheme based on Standard Input-Output Norms (SION).
2. Applicability of SION norms prevailing up to 31-3-1997 versus those starting from 1-4-1997.
3. Requirement of proving actual prior imports of Vitamin Mixes and Mineral Mixes for claiming customs duty credit.

Issue-wise Detailed Analysis:

1. Entitlement to avail credit of customs duties under the 'passbook' scheme based on Standard Input-Output Norms (SION):
The petitioners, being major exporters and Super Star Trading Houses, claimed credit for customs duties on Vitamin Mixes and Mineral Mixes based on their exports of frozen Head-on/Headless Shrimps as per SION prevailing from 1st April 1992 to 31st March 1997. The core of the dispute revolved around whether the petitioners were entitled to credit for 227 kg of Vitamin Mixes per metric ton of shrimp exports or if this should be restricted to 27 kg as per SION effective from 1st April 1997.

2. Applicability of SION norms prevailing up to 31-3-1997 versus those starting from 1-4-1997:
The court examined whether the subsequent SION norms, effective from 1-4-1997, could be applied retrospectively to exports made during the period when the passbook scheme was active. The court held that the norms applicable at the time of export should govern the credit entitlement. It was emphasized that the passbook scheme, which was absent in the new policy post-1997, should be governed by the norms in force during its validity. Therefore, the petitioners were entitled to the credit based on the unamended SION norms of 227 kg per metric ton for exports made up to 31-3-1997.

3. Requirement of proving actual prior imports of Vitamin Mixes and Mineral Mixes for claiming customs duty credit:
The court addressed the argument that the petitioners needed to prove actual prior imports to claim credit. It was clarified that the passbook scheme allowed for credit based on notional imports, calculated as per SION, without necessitating actual imports. The court rejected the contention that the amended scheme, which introduced the term "deemed imports," required actual imports for credit entitlement. The scheme's language and intent were to provide credit based on exports made, calculated on notional imports, thus supporting the petitioners' claim for credit without proving actual prior imports.

Conclusion:
The court concluded that the petitioners were entitled to credit based on the unamended SION norms of 227 kg of Vitamin Mixes per metric ton of shrimp exports for the period up to 31-3-1997. The subsequent SION norms effective from 1-4-1997 were not applicable retrospectively. The court directed the customs authorities to grant the appropriate credit and return the bonds and bank guarantees furnished by the petitioners. The rule was made absolute, with no orders as to costs.