2008 (8) TMI 763 - HC - Customs

DEPB credit - Quartz watches - Held that - Keeping in view the facts of this case we are of the opinion that quartz wrist watches with gold bracelets would fall in the generic description of quartz watches at serial Nos. 36 and 37 of the DEPB Scheme. In fact our interpretation is in consonance with the general instruction No. 4/general Para No. 4 introduced on 31st March 1999 inasmuch as it admits that gold watches are covered under the generic description of watches. Consequently the respondents who had exported quartz wrist watches with gold bracelet prior to 1st April 1999 in our view had rightly claimed benefit of the 21% credit rate under the DEPB Scheme as the above rates which were notified by the Directorate General of Foreign Trade were to cover exports made on or after 15th April 1998. Moreover the public notice dated 31st March 1999 was amendatory in nature and could only govern export transactions executed after 1st April 1999. Appeal dismissed.

Summary

Issues:
Appeal against judgment allowing writ petitions for mandamus to release DEPB Credit for export of quartz wrist watches with gold bracelet; Interpretation of DEPB Scheme notifications and applicability to exports made before and after specified dates.

Analysis:
The High Court dealt with the appeals against a judgment allowing writ petitions for mandamus to release DEPB Credit for the export of quartz wrist watches with gold bracelets. The court noted that identical issues were involved in the appeals and decided to dispose of them by a common order. The material facts included the Directorate General of Foreign Trade notifying credit rates under the DEPB Scheme for exports made on or after a specified date. The respondents exported the watches before a particular date but claimed benefits under the scheme.

A public notice was issued later, clarifying the applicability of the DEPB Scheme to certain products, including gold watches. The appellants denied benefits to the respondents, arguing that the notifications did not cover exports of quartz watches with gold straps. The court analyzed the notifications and held that the general instruction introduced later was an amendment to the scheme, not a mere clarification. The court emphasized that fiscal matters usually do not apply retrospectively.

The court referred to the judgment of a Three Member Bench and concluded that the consignment in question fell under the relevant category for DEPB credit. The court observed that the department's lack of clarity should not disentitle the petitioner from availing benefits as per a straightforward interpretation. The court interpreted the quartz wrist watches with gold bracelets to fall under the generic description of watches in the DEPB Scheme, aligning with the general instruction introduced in March 1999.

Consequently, the court held that the respondents rightfully claimed the 21% credit rate under the DEPB Scheme for their exports made before a specified date. The court determined that the public notice issued in March 1999 was amendatory and could only apply to transactions after a particular date. As a result, the court dismissed the appeals, affirming the judgment of the learned Single Judge without any costs imposed.