Court rules in favor of petitioner, quashing denial of DEPB credit for steel forging export

The court ruled in favor of the petitioner, quashing the denial of Duty Entitlement Pass Book (DEPB) credit for the export of "non-alloy steel forging - machined." The court found the reasoning behind the denial to be erroneous, emphasizing that benefits should continue for subsequent exports based on previous approvals and the product description provided in relevant notifications. The petitioner was awarded the claimed amount of Rs. 7,61,423/- with interest at 9% per annum and costs of Rs. 10,000/-, as the court held that the denial of DEPB credit was unjustified.

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Issues:
Challenge to denial of Duty Entitlement Pass Book (DEPB) credit for export of non-alloy steel forging - machined.

Analysis:
The petitioner challenged the Director General of Foreign Trade's decision denying DEPB credit for the export of "non-alloy steel forging - machined." The impugned order referred to a public notice allowing a DEPB rate of 14% for specific exports. The petitioner argued that their product fell within a notification issued by the Government of India in 1997. They contended that since they had already received benefits for earlier exports, the same should apply to subsequent exports. The respondent questioned whether the DEPB credit extended to finished products or only to articles made by forging machined. The petitioner sought clarification from DGFT and submitted details of their exports and DEPB amounts. The petitioner also referenced a subsequent notice by DGFT specifying DEPB rates for non-alloy forged hammers.

The court found the reasoning behind the denial of DEPB credit to be erroneous. The petitioner had already availed DEPB rates for the same product in earlier exports and argued that the benefit should continue for subsequent exports. The court noted that the product description did not restrict benefits to non-finished products. The impugned order was based on a misunderstanding that the subsequent notice applied only prospectively. The court ruled in favor of the petitioner, quashing the impugned order and awarding them the claimed amount of Rs. 7,61,423/- with interest at 9% per annum. The petitioner was also awarded costs of Rs. 10,000/-.

In conclusion, the writ petition was allowed, and the petitioner was granted the claimed amount along with interest and costs. The court held that the denial of DEPB credit was unjustified, emphasizing that the benefit should apply to subsequent exports based on previous approvals and the product description provided in the relevant notifications.

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