1999 (6) TMI 440 - AT - Central Excise

Tribunal remands DEPB credit determination, stresses procedural adherence

The Tribunal set aside the Order-in-Appeal and Order-in-Original, remanding the matter to the Assistant Commissioner of Customs for referral to the DGFT ... EXIM policy - Duty Entitlement Passbook Scheme (DEPB) - Credit - Adjudication - Expeditious adjudication Issues:Appeal against Order-in-Appeal restricting credit in Duty Entitlement Passbook scheme to 2% instead of claimed 4% sanctioned by DGFT. Dispute over jurisdiction of Customs to reduce credit quantum. Interpretation of DEPB scheme and role of Customs vs. DGFT.Analysis:1. The appeal challenged the Order-in-Appeal upholding the Order-in-Original restricting the credit in the Duty Entitlement Passbook (DEPB) scheme to 2% instead of the claimed 4% sanctioned by the Directorate General of Foreign Trade (DGFT). The dispute centered around the jurisdiction of Customs to reduce the credit quantum sanctioned by the DGFT, as per the DEPB scheme regulations.2. The appellant's advocate argued that under the DEPB scheme, the DGFT has the sole authority to adjudicate and sanction the quantum of credit, not the Customs authorities. Citing Circular No. 15/97 by the Board of Central Excise & Customs, it was emphasized that Customs' role is limited to verifying the exporter's declaration, not determining the credit rate. Legal precedents were cited to support the argument that DGFT's interpretation of the scheme is final and binding on Customs.3. The respondent, however, contended that Customs has a duty to verify the description of goods exported, as per the DEPB scheme guidelines. Any discrepancies between the exporter's declaration and the DGFT sanction order should be addressed to ensure the correct credit rate is applied. The Customs authorities must ensure alignment between the DEPB scheme details and the goods exported.4. The Tribunal examined the submissions and records, noting that while Customs verified the goods before export, a discrepancy arose regarding the credit rate due to mismatched declarations. It was acknowledged that the existing system did not facilitate sharing exporter's declarations with the DGFT, leading to confusion. The Tribunal found that Customs exceeded its authority by unilaterally reducing the credit without referring the matter back to the DGFT for resolution.5. In light of the legal principles and precedents cited, the Tribunal set aside the impugned orders and remanded the matter to the Assistant Commissioner of Customs. The Assistant Commissioner was directed to refer the issue to the DGFT for a final decision on the credit quantum. A time frame was set to ensure prompt resolution before the license expiration, emphasizing the need for fairness and adherence to the DEPB scheme guidelines.6. The Tribunal's decision focused on upholding the authority of the DGFT in determining DEPB credit rates, emphasizing the need for proper procedures and coordination between Customs and DGFT. The judgment aimed to ensure a just resolution while respecting the regulatory framework governing the DEPB scheme.This comprehensive analysis highlights the key legal arguments, regulatory framework, and the Tribunal's decision in the appeal concerning the DEPB scheme credit dispute and the respective roles of Customs and DGFT.