1998 (7) TMI 102 - HC - Customs

Summary

Issues Involved:
Petitioner seeks mandamus for DEPB licences verification.

Analysis:
The petitioner, engaged in export business, sought a writ of mandamus directing the authorities to complete verification of Duty Entitlement Pass Book (DEPB) licenses as per specified procedures. The DEPB Scheme allows exporters to claim a credit based on the FOB value of exports, which can be used to pay import customs duty. The process involves submitting shipping bills to licensing authorities, who issue DEPB licenses indicating the credits granted. Customs authorities are required to verify exports details before allowing imports against the credits. Circulars issued by the Ministry of Finance emphasize the need to verify export values and limit credits based on market value. The petitioner obtained DEPB licenses after exporting goods and requested prompt verification, but faced delays from respondents 2 and 3.

The petitioner argued that no enquiry is warranted since exports were completed, and Circular No. 69/97 deems the declared value accepted if no action is taken within 30 days. The petitioner contended that the authorities must abide by circulars and cannot conduct further inquiries beyond the specified time frame. The respondents, on the other hand, alleged overvaluation of exports to claim excessive duty credit and initiated an investigation due to suspicions of illegal transactions. They sought additional time for inquiries and dismissal of the writ petition.

After hearing both parties, the court found in favor of the petitioner based on the Circulars issued by the Ministry of Finance. The court noted that the declared FOB values were accepted without objection, and no action was taken against the petitioner within the stipulated time frame. Referring to legal precedents, the court emphasized the binding nature of circulars on the department and ruled that the petitioner should be granted the relief sought. Consequently, the court directed respondents 2 and 3 to complete the verification of DEPB licenses as per specified procedures and allow the petitioner to use the granted credits. The writ petition was allowed without costs.