DEPB benefit cannot be denied on suspicion alone when misdeclaration is unproved and technical evidence supports the exporter.

DEPB credit cannot be denied on a mere allegation of misdeclaration where Revenue fails to produce independent technical evidence showing that the exported goods were other than declared. The exporter's reliance on DGFT clarification, technical opinions and the Foreign Trade Policy was accepted, and the competent export authority's determination on the nature and eligibility of the goods remained unchallenged. In the absence of sampling or contrary proof by Revenue, suspicion could not displace the documentary material supporting the declaration. The redemption fine and penalty were therefore unsustainable, and the adverse adjudication was set aside with consequential relief.

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Issues: Whether DEPB benefit could be denied on the allegation that the exported goods were misdeclared as draw bars when the exporter relied on DGFT clarification and other technical material, and whether the redemption fine and penalty were sustainable.

Analysis: The material showed that Revenue did not draw any sample from the export consignments or otherwise obtain independent technical evidence to establish that the goods were ball mounts and not draw bars. The exporter placed reliance on the DGFT's clarification, technical opinions, and the Foreign Trade Policy, under which questions relating to interpretation and admissibility of export incentives were to be decided by the DGFT whose decision was final and binding. In the absence of contrary evidence, the finding that the goods were ball mounts remained unproved, and mere suspicion could not displace the documentary and technical support produced by the exporter. On that basis, the adjudication denying DEPB credit and imposing penalty could not be sustained.

Conclusion: The denial of DEPB benefit, redemption fine, and penalty were not justified, and the appeal succeeded.

Final Conclusion: The exporter was held entitled to the DEPB credit, with the adverse adjudication set aside and consequential relief granted in accordance with law.

Ratio Decidendi: Where the competent export authority's determination on the nature and eligibility of the exported goods remains unchallenged and Revenue fails to produce independent proof of misdeclaration, DEPB benefit cannot be denied on conjecture or suspicion.

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