Brand rate of drawback for indigenous duty-paid inputs under DEPB was upheld where credit was unavailable and policy permitted it.

Brand rate of drawback on duty-paid indigenous inputs used in export goods under the DEPB Scheme was admissible because the decisive factor was that Cenvat or Modvat credit had not been availed. The later EXIM Policy and departmental clarification allowed drawback where excise duty or additional customs duty was paid in cash, without distinguishing between imported and indigenous inputs, so the earlier narrower circular could not govern the claim. The objection based on non-production of original shipping bills also failed because attested copies were produced before the appellate authority, making rejection of the drawback application unsustainable.

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Issues: Whether indigenous inputs used in the manufacture of export goods under the DEPB Scheme were eligible for brand rate of drawback, and whether rejection could be sustained on the basis of the earlier circular and non-production of original shipping bills.

Analysis: The decisive consideration was whether Cenvat or Modvat credit had been availed on the duty suffered inputs. The governing policy position under the later EXIM Policy and the Board's clarification recognized drawback where excise duty or additional customs duty was paid in cash and credit was not available, without distinguishing between imported and indigenous inputs. The earlier circular relied on by the lower authority was held to be inapplicable in the changed policy regime. The objection regarding original shipping bills also failed because the requisite attested copies were produced before the appellate authority.

Conclusion: The claim for brand rate of drawback on indigenous inputs was held admissible, and the rejection of the drawback application was unsustainable.

Ratio Decidendi: Where duty-paid inputs used in export production do not qualify for credit and the later DEPB policy and departmental circulars permit drawback without distinguishing the source of inputs, brand rate of drawback cannot be denied merely because the inputs are indigenous or because an earlier circular took a narrower view.

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