DEPB imports and special additional duty: exemption scope was limited, and non-debit in the pass book was not a breach.

Duty entitlement pass book imports cleared under Notification No. 34/97 were exempt only from basic and additional customs duty, and the required DEPB debit applied only to duty covered by that notification. Special additional duty of customs fell outside that exemption. Notification No. 34/98 later extended special additional duty exemption to specified goods, including goods imported under Notification No. 34/97, subject to its stated conditions. On that basis, non-debit of special additional duty in the DEPB pass book was not a breach of Notification No. 34/97, and a demand founded on alleged non-compliance was not sustainable.

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Issues: Whether goods imported under the Duty Entitlement Pass Book Scheme and cleared under Notification No. 34/97 could be subjected to special additional duty of customs, and whether the non-debit of such special additional duty in the pass book amounted to breach of the notification conditions.

Analysis: Notification No. 34/97 granted exemption only from basic and additional customs duty, subject to debit in the DEPB pass book of the duty otherwise leviable on the goods covered by that notification. Special additional duty of customs was outside the scope of that exemption. The later exemption under Notification No. 34/98 covered special additional duty only for specified goods, including goods imported in terms of Notification No. 34/97 subject to the conditions, if any, specified therein. Since the debit contemplated by Notification No. 34/97 related only to the duties from which exemption was granted under that notification, failure to debit special additional duty could not be treated as non-compliance with its conditions.

Conclusion: The appellant was entitled to exemption from special additional duty under Notification No. 34/98, and the demand based on alleged non-debit of such duty in the DEPB pass book was unsustainable.

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