2006 (8) TMI 59 - AT - Central Excise

Exports DEPB Scheme- Alleged that assessee used DEPB Scheme by misdecleration of export gods Impugned order for recovery of DEPB credit is illegal and set aside.

Summary

Issues: Alleged misdeclaration of goods description and market value leading to DEPB credit recovery

The judgment by the Appellate Tribunal CESTAT, Mumbai, addressed the issue of alleged misdeclaration by the exporters in the description of goods exported and the market value to avail DEPB credit. The Commissioner of Customs upheld the misdeclaration of goods description but dropped the charges regarding over-invoicing, as the exporters had received the full transaction value from overseas buyers and submitted bank realization certificates. The Customs Authorities ordered the recovery of DEPB credit already sanctioned, leading to a dispute.

The appellants' counsel argued that Customs Authorities cannot disallow DEPB credit already granted by the DGFT. The counsel cited precedents like TTK Prestige Ltd. v. CC, Bangalore, Suresh Enterprises v. CC, Mumbai, Vrundavan Exports v. CC, Mumbai, and Kobian ECS India Pvt. Ltd. v. CC, Mumbai, emphasizing that once the licensing authority issues a DEPB license, Customs Authorities cannot question its validity. Any discrepancies should be reported to the DGFT as per these decisions.

After considering the submissions and the relevant legal precedents, the Tribunal concluded that the Commissioner of Customs' order for DEPB credit recovery was illegal and erroneous. The Tribunal set aside the order, allowing the appeal with consequential relief to the appellants as per the law. The judgment provided clarity on the authority's power to disallow DEPB credit and emphasized the importance of following established procedures in such matters.

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