Deemed exports count toward DTA entitlement when computing FOB value, and contrary duty demands are unsustainable.

Deemed exports were treated on par with physical exports for computing FOB value and DTA sales entitlement under the export policy regime, and the inclusion of such deemed exports was held correct. The Tribunal relied on co-ordinate Bench decisions and noted that the earlier view had attained finality after the Supreme Court dismissed the civil appeal. On that settled legal position, a demand challenging concessional duty treatment of the clearances was not sustainable, and the Revenue's challenge to the dropping of proceedings failed.

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Issues: Whether the value of deemed exports could be included while computing the FOB value for determining the extent of DTA sales entitlement, and whether the demand raised by treating the clearances as ineligible for concessional duty was sustainable.

Analysis: The permission granted by the Development Commissioner was treated as operative, and the Tribunal noted that the issue had already been settled by co-ordinate Bench decisions holding that deemed exports are to be counted on par with physical exports for computing DTA entitlement. The Tribunal further noted that the earlier view had attained finality since the Supreme Court had dismissed the civil appeal against the co-ordinate Bench decision. In light of that settled position, the Revenue's challenge to the dropping of proceedings could not succeed.

Conclusion: The inclusion of deemed exports in the FOB value for DTA entitlement was held to be correct, and the Revenue's appeal was rejected.

Ratio Decidendi: For computing DTA sales entitlement under the relevant export policy regime, deemed exports are to be treated on par with physical exports, and a demand contrary to that settled position is not sustainable once the view has attained finality.

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