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TMI Blog2017 (9) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Trading (P) Ltd. [2011 (3) TMI 82 - CESTAT, CHENNAI], has held that benefit of N/N. 32/97-Cus. could not be denied - following the ratio set down by the Tribunal in the Sierra Trading case, especially when department has not filed any appeal against allowing of DEPB under N/N. 34/97-Cus., the benefit of N/N. 32/97-Cus. cannot be denied to the appellant - benefit allowed - appeal allowed - decided in favor of appellant. - Appeal Nos. C/210, 211/2007 - Final Order No. 41871-41872 / 2017 - Dated:- 25-7-2017 - Ms. Sulekha Beevi C.S. Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri T. Ramesh, Advocate For the Appellant Shri A. Cletus, ADC (AR)For the Respondent ORDER Per Bench The brief facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was subsequently confirmed vide Orders-in-Original No.2298/2004 and 2299/2004 both dated 14.06.2004. On appeal, Commissioner (Appeals) vide impugned order dt. 26.02.2007 upheld the order of original authority. 2. On 25.07.2017 when the matter came up for hearing, on behalf of the appellant Ld. Advocate Shri T. Ramesh submits that the only issue involved in the present case is with regard eligibility of Notification No.32/97 with respect to goods imported free of duty for jobbing and re-exports and not with Regard to Notification No.34/99 concerning export under claim of DEPB. Ld. Advocate concedes that appellant having imported the goods for jobbing under Notification No.32/97-Cus., they cannot avail DEPB credit under Notification N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an incremental benefit to the exporter, apart from the main scope and intent of neutralizing customs duty, incidence on import content. In our view therefore, the DEPB scheme did not provide for a situation where the import content in the exported product did not suffer any customs duty. By implication, the DEPB scheme did not envisage grant of duty credit only on the value addition portion, in a situation where the import content did not suffer incidence of customs duty. Therefore goods imported with full customs duty exemption or goods with NIL rates of customs duty cannot then become eligible for DEPB credit when processed and resultant product re-exported even if there is value addition in the export product. 5.6 In the appeal at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the FOB value or FOB cap whichever was lower. 5.7 Interestingly, the very issue in this dispute was addressed by the CBEC in their Circular No.26/2002 dt. 16.5.2002, which unequivocally clarified that once the party has availed the benefit of Customs Notification No.32/97, then they become disentitled to DEPB benefit and that the facility available under 32/97 and 34/97 (DEPB scheme) are exclusive and independent of each other. 5. Be that as it may be, in the present appeal while the goods for jobbing have been imported under Notification No.32/97-Cus. and DEPB benefit on subsequently exported goods may have been claimed, there is however no demand that has been made by the department in respect of such DEPB credit availed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been clarified that as the DEPB scheme works on the principle of deemed import content , presuming inputs to be duty-paid, the use of inputs, imported free of cost in terms of Notification No. 32/97 and the resultant product will render such exports ineligible for DEPB benefit. The drawback notifications also stipulate that the rates of drawback schedule shall not be applicable to a commodity if such commodity is a manufactured and exported availing the benefit of Customs Notification No. 32/97. This stipulation is in addition to the restriction in Rule 3 of the Drawback Rules that no drawback shall be admissible if exemption has been availed in respect of inputs. 6. The DGFT authorities appear to have clarified that imports made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under Notification No. 32/97. The ratio of Sierra Trading decision has been followed by Tribunal in Leather Crafts (India) P. Ltd. Vs Commissioner of Customs, Chennai reported in 2011 (274) ELT 379 (Tri.-Chennai). 6. In the event, following the ratio set down by the Tribunal in the Sierra Trading case, especially when department has not filed any appeal against allowing of DEPB under Notification No.34/97-Cus., we hold that benefit of Notification No.32/97-Cus. cannot be denied to the appellant. In consequence, the impugned order is set aside and the appeals are allowed to the extent of granting of customs duty exemption under Notification No.32/97-Cus. ( Operative part of the order pronounced in court ) - - TaxTMI - TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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