Madras HC allows Benefit of DEPB/Duty Drawback under Import-Export Policy in case of 100% EOUs

Case covered:

The Central Board of Excise and Customs

Versus

M/s.K.G.Denim Limited

Prayer:

Appeals filed under Clause 15 of the Letters Patent Act, praying to set aside the common order dated 14.11.2017 passed by this Court in W.P.Nos.11645 to 11648 of 2003.

Common Judgment:

Having heard the learned counsel for the parties and in view of the legal position, we are of the opinion that there is no merit in the present intra Court Appeals filed by the Revenue and the view of the learned Single Judge deserves to be upheld. We are of the opinion that the Circulars like Circular No.74/1999-Cus dated 05.11.1999 as well as the Circular No.31/2000-Cus dated 20.04.2000 could not have restricted or denied the benefit of Drawback or DEPB if such manufacturing was done by 100% EOU Units and then exports were made by such 100% EOUs. We have quoted below Paragraph No.4 of the Circular No.74/1999 Cus illustratively to explain the said point. 

“4.It has been brought to the notice of the Board that there is a lack of clarity as to who will file the Shipping Bill and where the Shipping Bills of such exports will be assessed. It is clarified that the Shipping Bill in such a case will be filed in the name of the DTA unit and the name of the EOU/EPZ unit will also be mentioned on the Shipping Bill as a job worker. In case of job work by EPZ units, the Shipping Bill will be assessed by the Assistant Commissioner in charge of zone, in case of EOU, as the Shipping Bill is filed at the Gateway Port, the Shipping Bill will be assessed by Assistant Commissioner in charge of Export or any other officer as may be specified by Commissioner of Customs at Gateway Port. However, the name of the exporter i.e., the DTA unit and name of job worker i.e., EOU unit shall be required to be mentioned on the invoice and AR-4. Also, the AR-4 shall be signed by both the parties. It is also clarified that no drawback/DEPB benefits shall be admissible either to EOU/EPZ units or to the DTA unit for such exports.“

The said para 4 clearly reveals that by the said Circular 74/1999, the Central Board intended to prescribe the authority as to who will assess and clear the consignments in question, where the exports were made by EOU/EPZ units or the Bills of Entries will mention as well as the DTA Units viz., the present Assessee/Respondent. The Para 4, however, ends up with another alleged clarification saying that no drawback/DEPB benefits shall be admissible either to EOU/EPZ units or to the DTA unit for such exports. This denial of benefit to the Assessee under the guise of clarification for which, in our opinion, no power was bestowed on the Central Board. More so, if such Circulars come in direct conflict with clear statutory provisions of law or Import Export Policy having statutory character.

Therefore, respectfully agreeing with the views of the earlier Division Bench Judgments of this Court in the case of Commissioner of Customs, Tuticorin V. L.T. Karle & Co., reported in 2007 (207) E.L.T. 358 (Mad.) as well as the Karnataka High Court in the case of Karle International V. Commissioner of Customs, Bangalore, 2012 (281) E.L.T.  486 (Kar.), we do not find any merit in these Writ Appeals filed by the Revenue Department. We hold that the Judgments relied upon by the Appellant/Revenue were rendered in a different context and they pertain to statutory Notifications issued by the Central Government and not with the Circulars issued by the Central Board of Excise and Customs.

In view of the aforesaid observations, the present Writ Appeals are bound to be dismissed and they are dismissed. No costs.

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