DEPB debit under customs exemption rules need not include Special Additional Duty where basic customs duty and additional duty are covered.

DEPB debits for exemption under Notification No. 34/98-Cus. are sufficient when they cover basic customs duty and additional duty; Special Additional Duty need not be separately debited to claim SAD exemption. The Tribunal's earlier construction treats the DEPB scheme and the exemption notification harmoniously, so requiring a separate SAD debit would conflict with the notification structure. On that reading, the exemption mechanism operates without any debit of SAD from the DEPB book, and the assessee remains entitled to SAD exemption.

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Issues: Whether exemption from Special Additional Duty under Notification No. 34/98-Cus. required debit of SAD from the DEPB book, or whether debit of basic customs duty and additional duty alone was sufficient.

Analysis: The issue was already settled by the Tribunal's earlier decision holding that DEPB debits are intended to cover basic customs duty and additional duty, and not Special Additional Duty. On that construction, the exemption notification does not require SAD to be debited from the DEPB book. The contrary interpretation would render the exemption mechanism inconsistent with the scheme of the notifications.

Conclusion: The requirement to debit Special Additional Duty from the DEPB book was negatived, and the assessee remained entitled to SAD exemption.

Ratio Decidendi: Where the DEPB scheme and the exemption notification are construed harmoniously, debit of DEPB for basic customs duty and additional duty is sufficient and Special Additional Duty need not be separately debited to claim SAD exemption.

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