DEPB-linked exports and drawback exclusion bar All Industry Rate drawback, with no interest once entitlement fails.

Goods exported after manufacture using imported inputs cleared against DEPB debits were held ineligible for All Industry Rate drawback because the drawback notifications expressly excluded products manufactured or exported availing the DEPB Scheme. The fact that the exports were filed on drawback shipping bills did not override that exclusion, and circulars on average-based drawback or actual duty incidence could not expand the notification. Circular No. 57/2004-Cus. did not create drawback entitlement, and Circular No. 41/2005-Cus. on brand rate drawback was prospective only. As drawback was inadmissible, the claim for interest also failed.

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Issues: Whether export goods manufactured by availing the Duty Entitlement Pass Book Scheme on imported inputs were eligible for All Industry Rate drawback, and whether interest could be granted when drawback itself was inadmissible.

Analysis: The governing drawback notifications excluded commodities or products manufactured or exported availing the Duty Entitlement Pass Book Scheme. The imported chemicals were cleared against DEPB debits, which were treated as availing the scheme, and the exclusion operated even though the exports were filed under drawback shipping bills. Circulars clarifying that All Industry Rate drawback is based on averages and that actual duty incidence need not be proved did not override the express exclusion in the notifications. Circular No. 57/2004-Cus. related to DEPB benefit and did not confer drawback entitlement. Circular No. 41/2005-Cus. allowing brand rate drawback on duty paid through DEPB was held to be prospective and did not apply to exports made before its issuance.

Conclusion: All Industry Rate drawback was not admissible, and the consequential claim for interest also failed.

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