2008 (12) TMI 609 - AT - Customs

EXIM - DEPB Scheme - Brand Name Approval by DGFT - jurisdiction to deny DEPB benefit - whether the customs authorities had jurisdiction to modify the DEPB credit allowed by DGFT?

Summary

Issues:
Appeal against denial of DEPB credit.

Analysis:
The appeal pertains to the denial of DEPB credit to the appellants, who were engaged in manufacturing excisable goods under the brand name 'REXELLO'. The Director General of Foreign Trade (DGFT) approved the brand for benefits under EXIM Policy 1997-2002, subject to conditions including prominently displaying "Made in India"/"India" along with the brand name on exported products and related documents. The appellants exported products under this brand and acquired a DEPB scrip, but the Deputy Commissioner of Customs denied benefits for non-compliance with branding conditions on six shipping bills. The appellants appealed to the Commissioner (Appeals) without success, leading to the current appeal.

The counsel argued that customs authorities lacked jurisdiction to modify DEPB credit granted by DGFT, citing precedents where the Tribunal and High Court held that customs authorities cannot disqualify licensees from DEPB benefits. The counsel contended that the exports were made before the appellants received the Brand Approval Letter, making strict compliance unreasonable. The Senior Departmental Representative (SDR) supported the Deputy Commissioner's decision.

Upon review, the Tribunal referenced previous cases to establish that customs authorities cannot independently deny DEPB benefits granted by DGFT. The Tribunal emphasized that any discrepancies should be referred back to DGFT for resolution. In this case, the Tribunal found that the Deputy Commissioner overstepped by evaluating compliance with branding conditions, a task reserved for DGFT. The Tribunal held that the decision of the Commissioner (Appeals) was also unsustainable. Consequently, the impugned order was set aside, and the appeal was allowed.

In conclusion, the Tribunal ruled in favor of the appellants, emphasizing that customs authorities do not have the authority to deny DEPB benefits granted by DGFT. The Tribunal highlighted the need for customs authorities to refer discrepancies back to DGFT for resolution, rather than making independent judgments on compliance issues.