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2017 (11) TMI 1536 - HC - CustomsDEPB benefit - Applicability of Policy Circular No.6, dated 20.05.1998 and Policy Circular No.35, dated 03.09.1998 to the petitioner s case and what is the legal effect of such policy Circulars - Whether the denial of DEPB benefit based on the impugned policy Circulars is valid and proper? Held that - This benefit which flows from the statutory policy is sought to be denied based upon the policy Circular Nos.6 and 35 as held in the case of Karle International Vs. Commissioner of Customs, Bangalore 2012 (10) TMI 652 - KARNATAKA HIGH COURT , the right conferred in the statute which in the instant case is in the nature of Export Import Policy cannot be taken away by issuing Circulars. Thus, the benefit which has accrued to the petitioner by virtue of Export Import Policy cannot be denied by relying upon the impugned policy circulars. Though the petitioner has challenged the amendment to Circular No.31/2000, eventually in the impugned order reference has been made to policy Circular Nos.6 and 31. In the light of the finding that the policy circulars cannot override the statutory benefit, the rejection of the petitioner s request for being eligible for DEPB Scheme vide order dated 28.02.2003 and the consequential communications of the 4th respondent dated 20.03.2003 and 04.03.2003 are held to be unsustainable in law. It may not be necessary for this Court to declare the policy circular as either null and void or ultravires and it would suffice to hold that the policy Circulars cannot overide the statutory policy which is the Export Import Policy of the year 1997 framed under the provisions of Foreign Trade (Development and Regulations) Act, 1992 - petition allowed - decided in favor of petitioner.
Issues Involved:
1. Applicability of Policy Circular No.6, dated 20.05.1998 and Policy Circular No.35, dated 03.09.1998 to the petitioner's case and the legal effect of such policy circulars. 2. Validity and propriety of the denial of DEPB benefit to the petitioner based on the impugned policy circulars. Issue-wise Detailed Analysis: 1. Applicability of Policy Circular No.6 and Policy Circular No.35: The petitioner, a Domestic Tariff Area (DTA) unit, challenged the applicability of Policy Circular No.6, dated 20.05.1998, and Policy Circular No.35, dated 03.09.1998. These circulars were used to deny the petitioner benefits under the Duty Entitlement Passbook (DEPB) scheme for exports processed through a 100% Export Oriented Unit (EOU). The petitioner argued that the circulars were contrary to the Export Import Policy (EXIM Policy) and violative of Articles 14 and 265 of the Constitution of India. The court referred to a similar case decided by the High Court of Karnataka (Karle International Vs. Commissioner of Customs, Bangalore), where it was held that statutory rights under Section 75 of the Customs Act cannot be overridden by circulars. The court concluded that the policy circulars could not override the statutory benefits conferred by the EXIM Policy, thus affirming the petitioner's entitlement to the benefits. 2. Validity of Denial of DEPB Benefit: The petitioner contended that the denial of DEPB benefits based on the impugned circulars was improper. The court noted that the petitioner had utilized the manufacturing facilities of a 100% EOU for processing denim fabrics, which were then exported. The policy circulars in question restricted the benefits for goods processed in EOUs, contrary to the statutory provisions of the EXIM Policy. The court reiterated that rights conferred by statutory provisions cannot be negated by administrative circulars. The court held that the petitioner's exports were eligible for DEPB benefits, and the denial based on the impugned circulars was unsustainable in law. Conclusion: The court concluded that the policy circulars could not override the statutory benefits provided by the EXIM Policy. The rejection of the petitioner's DEPB benefits was deemed unsustainable. The writ petitions challenging the denial of DEPB benefits were allowed, and the impugned orders were set aside. The writ petition challenging the public notice was disposed of, with the court holding that policy circulars could not override the statutory policy.
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