2015 (1) TMI 1359 - HC - Customs

Denial of Duty Entitlement Pass Book (DEPB) credit - public notice issued on 21-9-1998 - The impugned order states that the notification would be applied only prospectively and cannot be availed for the petitioner who is claiming the benefit for its exports between May 1998 to July 1998 - Held that - The petitioner was only asking for rates as prevalent for the earlier period and the amount claimed at ₹ 7,61,423/- was on the rates that were prevalent at the relevant time. The doubt created that such a benefit would be applicable only to non-finished products was quite unnecessary for the Entry 71 does not say any more than the description of the product. The denial of benefit was erroneous and the impugned order cannot be supported - petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to denial of Duty Entitlement Pass Book (DEPB) credit for export of non-alloy steel forging - machined.

Analysis:
The petitioner challenged the Director General of Foreign Trade's decision denying DEPB credit for the export of "non-alloy steel forging - machined." The impugned order referred to a public notice allowing a DEPB rate of 14% for specific exports. The petitioner argued that their product fell within a notification issued by the Government of India in 1997. They contended that since they had already received benefits for earlier exports, the same should apply to subsequent exports. The respondent questioned whether the DEPB credit extended to finished products or only to articles made by forging machined. The petitioner sought clarification from DGFT and submitted details of their exports and DEPB amounts. The petitioner also referenced a subsequent notice by DGFT specifying DEPB rates for non-alloy forged hammers.

The court found the reasoning behind the denial of DEPB credit to be erroneous. The petitioner had already availed DEPB rates for the same product in earlier exports and argued that the benefit should continue for subsequent exports. The court noted that the product description did not restrict benefits to non-finished products. The impugned order was based on a misunderstanding that the subsequent notice applied only prospectively. The court ruled in favor of the petitioner, quashing the impugned order and awarding them the claimed amount of Rs. 7,61,423/- with interest at 9% per annum. The petitioner was also awarded costs of Rs. 10,000/-.

In conclusion, the writ petition was allowed, and the petitioner was granted the claimed amount along with interest and costs. The court held that the denial of DEPB credit was unjustified, emphasizing that the benefit should apply to subsequent exports based on previous approvals and the product description provided in the relevant notifications.