Deemed exports and DTA clearance: FOB value may include deemed exports, and no implied permission can be added to the notification.

Deemed exports are treated as exports for FOB computation under Notification No. 2/95-C.E. unless the notification expressly excludes them, so their value may be included for entitlement to Domestic Tariff Area clearance. A clearance notification for an Advance Release Holder cannot be read to impose prior permission from the Development Commissioner where no such requirement appears in its text; in any event, permission had also been granted. On that reasoning, denial of notification benefit was unsustainable and the demand could not survive on either ground.

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Issues: (i) Whether the value of deemed exports could be included while computing the total FOB value for entitlement under Notification No. 2/95-C.E. dated 04.01.1995; (ii) Whether prior permission of the Development Commissioner was required for clearance of final products to the Domestic Tariff Area under Notification No. 82/92-C.E. dated 27.08.1992.

Issue (i): Whether the value of deemed exports could be included while computing the total FOB value for entitlement under Notification No. 2/95-C.E. dated 04.01.1995.

Analysis: The notification referred to exports without drawing any distinction between physical exports and deemed exports. Deemed exports were treated as having the essential attributes of exports, including payment in foreign exchange, and there was no legal basis to exclude them while computing FOB value for the purpose of DTA clearance entitlement.

Conclusion: The issue was decided in favour of the assessee.

Issue (ii): Whether prior permission of the Development Commissioner was required for clearance of final products to the Domestic Tariff Area under Notification No. 82/92-C.E. dated 27.08.1992.

Analysis: The notification governing duty-free clearance to an Advance Release Holder did not prescribe a requirement of prior permission from the Development Commissioner. In any event, permission had also been granted by the Development Commissioner for clearance of the finished goods to the Domestic Tariff Area.

Conclusion: The denial of the notification benefit was unsustainable and the issue was decided in favour of the assessee.

Final Conclusion: The demand sustained against the assessee could not survive on either ground, and the assessee obtained complete relief while the revenue's challenge failed.

Ratio Decidendi: Where a notification refers broadly to exports, deemed exports cannot be excluded from FOB computation unless the notification expressly does so, and a clearance notification cannot be read to impose a permission requirement not stated in its text.

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