Customs cannot override DGFT's DEPB entitlement determination on alleged brand approval non-compliance.

Customs authorities had no jurisdiction to deny or modify DEPB credit already granted by DGFT on the basis of alleged non-compliance with Brand Approval Letter conditions. Once eligibility and entitlement were determined by the licensing authority on the exporter's records, customs officers could only verify the position and, if necessary, refer the matter back to that authority for appropriate action. The denial of DEPB benefit on an independent assessment by customs was therefore unsustainable.

---

---

Issues: Whether the customs authorities had jurisdiction to deny or modify DEPB credit granted by the DGFT on the ground of alleged non-compliance with conditions of the Brand Approval Letter.

Analysis: The DEPB scrip had been issued by the DGFT on the basis of the exporter's records. The dispute raised by the Revenue concerned alleged breach of conditions attached to the brand approval, which was a matter for the licensing authority that issued the approval and the scrip. In the light of the earlier binding view that customs authorities cannot sit in judgment over the entitlement already determined by DGFT, their role was confined to verification and, if necessary, reporting the result to the licensing authority for appropriate action.

Conclusion: The customs authorities had no jurisdiction to deny the DEPB benefit granted by DGFT, and the denial was unsustainable.

Final Conclusion: The impugned order was set aside and the appeal succeeded.

Ratio Decidendi: Where DEPB eligibility has been determined by the licensing authority, customs officers cannot independently disqualify the exporter on alleged non-compliance with the approval conditions and may only refer the matter back to the licensing authority.

---