2011 (7) TMI 936 - AT - Customs

DeEPB benefit - In the present case, although learned counsel for the assessees have vehemently contended that the value addition has been achieved, we are not satisfied that the material on record establishes the above fact - Moreover, as pointed out by learned SDR, the shipping bill filed by the assessees do not contain any reference to the imports and value addition in terms of Notification - Decided against the assessee

Summary

Issues:
1. Claim of DEPB benefit and denial of exemption under Notification No. 32/97.
2. Fulfillment of conditions regarding value addition under the notification.

Issue 1: Claim of DEPB benefit and denial of exemption under Notification No. 32/97

The case involved the import of 'Black fabric Lining material' for the manufacture of 'Leather spect cases' and claiming DEPB benefit on certain shipping bills. The denial of benefit under Notification No. 32/97 was based on the contention that simultaneous benefit under both the notification and DEPB was not legally permissible. Additionally, it was argued that the required value addition of at least 10% as per the notification was not met by the assessees. The appeal was made challenging this denial.

Issue 2: Fulfillment of conditions regarding value addition under the notification

In the judgment, reference was made to a previous case involving the import of 'shoe soles' for manufacturing 'men shoes' where the benefit of the notification was extended to importers. The Tribunal held that while benefit of drawback/DEPB could be denied for jobbing and exports made using such imports, the benefit of the notification was admissible upon fulfilling the condition of value addition. In the present case, the Tribunal was not convinced that the value addition had been achieved based on the material on record. It was noted that the shipping bills did not contain any reference to the imports and value addition as required by Notification No. 32/97. Following the precedent set by the previous case, the impugned order was set aside, allowing the appellants to avail the benefit of the notification upon demonstrating the fulfillment of the value addition requirement.

This judgment highlights the importance of complying with the conditions specified in notifications related to import benefits and value addition requirements. It emphasizes the need for importers to provide clear documentation and evidence to support their claims for benefits, especially when seeking exemptions and allowances under different schemes simultaneously. The decision also underscores the role of precedents in guiding the interpretation and application of legal provisions in customs and excise matters.