Supreme Court reverses High Court, grants DEPB benefits to appellant as per Notification.

The Supreme Court allowed the appeal, overturning the High Court's decision, and directed the appellant to receive DEPB benefits in line with Notification No. 07/2002-2007 dated 05.06.2002 for supplies to SEZ units. The Court clarified that the Circular issued by the Customs Department could not delay the entitlement to benefits as per the Notification's effective date. The appellant was instructed to fulfill the required conditions within two months to avail of the benefits outlined in the statutory Notification.

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Issues:
Challenge to correctness of orders by High Court denying benefit under Notification No. 07/2002-2007 dated 05.06.2002 for supplies made to SEZ or unit in SEZ.

Analysis:
The appellant challenged the High Court's dismissal of the writ petition seeking benefits under Notification No. 07/2002-2007 dated 05.06.2002, which amended the Export and Import Policy 2002-2007. The Notification allowed DEPB benefits in lieu of Drawback for supplies to SEZ units from DTA. The Customs Department issued Circular No. 25/2003 detailing the procedure for availing DEPB benefits. The appellant made supplies to SEZ units after the Notification but before the Circular's effective date. The High Court held that benefits were applicable only from the Circular's date, reasoning that no procedure was prescribed earlier. However, the Supreme Court found this reasoning flawed.

The Supreme Court emphasized that the Notification dated 05.06.2002 was statutory and amended the EXIM Policy, making exporters eligible for DEPB benefits for supplies to SEZ units. The Circular dated 01.04.2003 was administrative and outlined the procedure for claiming DEPB benefits. The Court clarified that the Circular could not alter the Notification's effective date or amend it. The authorities could set conditions for claiming benefits but could not delay entitlement from the Notification's date. Thus, the Court allowed the appeal, setting aside the High Court's order and directing the appellant to be granted DEPB benefits in accordance with the Notification, subject to fulfilling necessary conditions within two months.

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