Pass Book Scheme credit depends on export-period norms and deemed imports, not later retrospective restrictions.

Under the Pass Book Scheme, export credit accrued on the basis of the norms in force when the exports were made, so later revised input-output norms could not retrospectively reduce entitlement from 227 kg to 27 kg per metric ton of exported shrimps. The scheme was distinct from the Advance Licence Scheme and operated on immediate credit against export performance. Entitlement also did not depend on proof of actual prior imports; credit was computed on deemed or notional imports, and the later reference to "deemed" was only clarificatory. Accordingly, the prevailing export-period norms governed the credit and authorities were to grant consequential relief.

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Issues: (i) Whether the standard input-output norms introduced from 1-4-1997 could be applied to exports made under the earlier Pass Book Scheme period so as to restrict the credit to 27 kg of Vitamin Mixes instead of 227 kg per metric ton of exported shrimps; (ii) whether entitlement under the Pass Book Scheme depended upon proof of actual prior imports or could be worked out on the basis of deemed or notional imports.

Issue (i): Whether the standard input-output norms introduced from 1-4-1997 could be applied to exports made under the earlier Pass Book Scheme period so as to restrict the credit to 27 kg of Vitamin Mixes instead of 227 kg per metric ton of exported shrimps.

Analysis: The Pass Book Scheme operated on the basis of the norms in force at the time of export and was distinct from the Advance Licence Scheme. The earlier policy and handbook contemplated immediate credit on export, and the later policy did not contain the Pass Book Scheme at all. The revised bifurcation of Vitamin Mixes and Mineral Mixes from 1-4-1997 was held to be prospective and could not govern exports made when the earlier norms were in force.

Conclusion: The revised norms could not be applied retrospectively, and the assessee was entitled to credit at the earlier rate of 227 kg per metric ton.

Issue (ii): Whether entitlement under the Pass Book Scheme depended upon proof of actual prior imports or could be worked out on the basis of deemed or notional imports.

Analysis: The scheme permitted credit to be calculated on export alone, with the credited amount usable for any permissible imports and even goods other than the input items in the norm. The language of the policy and handbook showed that the credit represented duty deemed to have been paid on notional imports, and the later insertion of the word "deemed" was only clarificatory. The scheme did not require matching actual imports before credit could be granted.

Conclusion: Actual prior imports were not required, and credit was allowable on the basis of deemed or notional imports.

Final Conclusion: The petitioners succeeded in establishing entitlement to Pass Book credit under the norms prevailing when the exports were made, and the authorities were directed to grant credit accordingly and give consequential relief.

Ratio Decidendi: Under the Pass Book Scheme, credit accrued on export according to the standard input-output norms then in force, and subsequent revisions could not retrospectively curtail that entitlement; the scheme was founded on deemed duty credit rather than proof of actual matching imports.

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