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2018 (3) TMI 203 - AT - CustomsDEPB Benefit - denial of benefit on the ground that the goods were actually Cart/Trolley Axle without hubs classifiable under 87169090 - Held that - the CBEC has clarified in its instructions dated 03.06.1997 that the role of customs authorities in the matters relating to DEPB Scheme would be confined to verification of correctness of exporter declaration regarding quantity, description and FOB value of the export products. It would be for the licensing authorities granting credit to ensure that the credit is permitted by them at the correct rate as notified by DGFT. Admittedly, no such reference has been made by the lower authorities and they have straightway gone ahead and the adjudicated the matters relating to classification of the Rear Axle Shaft. The matters are remanded back to the adjudicating authority, who is directed to refer the matters with all the material including Chartered Engineer Certificate to the office of DGFT - appeal allowed by way of remand.
Issues:
Classification of goods for DEPB benefit under the Customs Tariff Act, jurisdiction of Customs authority in DEPB matters, applicability of CBEC instructions, reference to DGFT for classification. Analysis: The judgment by the Appellate Tribunal CESTAT Chandigarh involved multiple appeals concerning the classification of goods for DEPB benefit under the Customs Tariff Act. In the first set of appeals, M/s Windsor Exports exported rear Axle Shafts and claimed DEPB benefit, but the Department contended that the goods were actually "Cart/Trolley/Trailer Axles" with a nil rate of DEPB benefit. Similarly, in the second set of appeals by M/s K N M Spare Pvt. Ltd., the Department disputed the classification of Axle Shafts as "Cart/Trolley Axle without hubs" with no DEPB benefit. The goods were examined by a Chartered Engineer, who provided an opinion on the classification discrepancy. The Customs authorities issued show cause notices, leading to the denial of DEPB benefit, confiscation of goods, and imposition of penalties under the Customs Act. The appellants appealed, arguing that Customs authorities lacked jurisdiction to adjudicate on descriptions for DEPB purposes. They cited relevant judgments, including those by the Allahabad High Court and the Tribunal, to support their position on the interpretation of classification under the DEPB scheme. After considering the submissions and records, the Tribunal referred to CBEC instructions stating that Customs authorities' role in DEPB matters is limited to verifying exporters' declarations. The Tribunal emphasized the need to refer classification doubts to the DGFT under the Foreign Trade (Development and Regulation) Act. As no such reference was made in the present case, the Tribunal set aside the Commissioner's orders and remanded the matters to the adjudicating authority. The authority was directed to seek a report from the DGFT on classification and DEPB rates before taking further action in accordance with the law. In conclusion, the Tribunal disposed of all appeals by remanding the cases back to the adjudicating authority for proper classification verification through a reference to the DGFT. The judgment clarified the jurisdiction of Customs authorities in DEPB matters and highlighted the importance of following established procedures for classification under the DEPB scheme.
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