2017 (1) TMI 1016 - AT - Customs

Denial of DEPB credit - the condition for entitlement of credit on export of fish and fish products, was subject to observation of prescribed standard input output norms in the usage of preservatives and chemicals in exported goods - appellant had used less quantity of preservative in the exported goods not adhering to the standard, input output norms hence DEPB credit claim seems to be incorrect. Held that - the statement of General Manager who is handing day today activities of the processing of the fish products need to be considered in its correct perspective which indicates that HIPL had used chemicals and preservatives fish and fish products which are exported, though not to the quantity as indicated in standard input output norms - The statement very clearly indicates that there was usage of preservatives and chemicals, but not to the quantum as indicated in the standard input output norms. There was a requirement for giving only declaration of usage of chemicals and preservatives on the shipping bills has been withdrawn with effect from 01.04.2002 under DEPB scheme, it is decided that exporter shall be allowed to avail 04% DEPB benefit if he is otherwise eligible for such benefit. In the absence of contrary evidence to show that HIPL has not used any preservatives in processing of fish and fish products which are exported, we have to hold that the impugned order is correct and legal - DEPB credit allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
Revenue challenging Order-in-Original dropping proceedings on DEPB credit claim.

Analysis:

Issue 1: DEPB Credit Claim
The main issue in the judgment revolves around the DEPB credit claimed by the respondent company for exporting fish and fish products. The revenue challenged the Order-in-Original that dropped the proceedings initiated through a show-cause notice, alleging incorrect DEPB credit claims by the company. The investigation revealed discrepancies in the usage of preservatives and chemicals in the exported goods, leading to the issuance of the show-cause notice in 2003.

Issue 2: Evidence Consideration
The Departmental Representative argued that the adjudicating authority did not consider crucial evidence, specifically the statements of the General Manager and a partner of the exporting firm. These statements indicated that the company did not adhere to standard input output norms regarding the usage of preservatives in the exported goods. The representative contended that these statements, recorded under the Customs Act, should be considered as admissible evidence, and the adjudicating authority erred in relying on a Board circular without proper evaluation of its contents.

Issue 3: Interpretation of Circular
The counsel for the respondent company countered by highlighting the clarity in the General Manager's statement, acknowledging the use of a meagre quantity of chemicals and preservatives in the exported goods. Referring to a DEPB circular, the counsel argued that the benefit should be extended even for minimal usage of such substances. The lower authorities were supported for their correct adjudication of the matter, emphasizing the compliance with relevant circulars.

Judgment and Conclusion
After considering arguments from both sides and reviewing the records, the Tribunal found in favor of the respondent company. The Tribunal emphasized that the statement of the General Manager indicated some usage of preservatives and chemicals, albeit not in the quantities specified by standard norms. Additionally, the Tribunal noted the relevance of the Board circular dated 2003, which allowed a 4% DEPB benefit for eligible exporters even with minimal usage of preservatives. As there was no contrary evidence presented to refute the company's claims, the impugned order was deemed correct and legally sound. Consequently, the revenue's appeals were dismissed for lacking merit.

This detailed analysis of the judgment showcases the intricate legal considerations and factual assessments made by the Tribunal in resolving the issues raised by the revenue challenging the DEPB credit claims of the exporting company.