DEPB credit for quartz wrist watches exported before 1 April 1999 upheld; later notice treated as prospective and amendatory.

Quartz wrist watches with gold bracelets exported before 1 April 1999 were treated as falling within the generic description of quartz watches eligible for DEPB credit at 21% under the Export and Import Policy, 1997-2002. The later public notice of 31 March 1999, read with the accompanying general instruction, operated to change the earlier entitlement position by excluding gold watches rather than merely explaining it. In fiscal matters, an instrument affecting entitlement is not retrospective unless clearly stated. Because the notice itself took effect from 1 April 1999, it applied only to exports made thereafter. The exporters were therefore entitled to DEPB credit for pre-1 April 1999 exports.

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Issues: Whether quartz wrist watches with gold bracelets exported before 1 April 1999 were eligible for DEPB credit at 21% under the generic description of quartz watches, and whether the public notice issued on 31 March 1999 was clarificatory or amendatory in operation.

Analysis: The exports in question fell within the generic description of quartz watches covered by the DEPB rates notified under the Export and Import Policy, 1997-2002. The later public notice and the accompanying general instruction recognised that gold watches, though covered by the generic description of watches, were not eligible under the scheme, which showed that the later instrument operated to change the earlier position rather than merely explain it. In fiscal matters, a change affecting entitlement cannot be given retrospective effect unless clearly expressed. The public notice itself stated that it would come into force from 1 April 1999, indicating that it governed exports made thereafter and not completed exports made earlier.

Conclusion: The exporters were entitled to DEPB credit for exports made before 1 April 1999, and the later public notice was prospective and amendatory, not merely clarificatory.

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