Beneficial customs exemption for jobbing imports cannot be denied merely because DEPB was also claimed on exports.

Notification No. 32/97-Cus. was treated as a beneficial exemption for duty-free import of goods used for jobbing in execution of export orders, provided its own conditions on utilisation, export obligation and value addition were met. The denial of customs duty exemption could not be justified merely on an allegation that DEPB benefit had also been taken on the exported products, especially when no demand was raised on the DEPB credit issue and the dispute was confined to entitlement under the notification. The importer was therefore held entitled to the exemption, and the customs duty denial was unsustainable.

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Issues: Whether the importer was entitled to the benefit of Notification No. 32/97-Cus. for duty-free import of goods for jobbing and re-export, notwithstanding the claim that DEPB benefit had also been availed on the exported products.

Analysis: The Notification No. 32/97-Cus. was treated as a beneficial exemption intended to permit import of goods for execution of export orders by way of jobbing, subject to fulfilment of its own conditions, including utilisation of the imported goods for export obligation and prescribed value addition. The denial of exemption could not rest merely on the allegation of dual benefit when the department had not raised any demand in respect of DEPB credit and the issue before the Tribunal was confined to entitlement under Notification No. 32/97-Cus. The Tribunal followed its earlier view that, where the conditions of the exemption notification were satisfied, the exemption could not be withdrawn on the ground that DEPB was claimed on the exports.

Conclusion: The importer was entitled to the benefit of Notification No. 32/97-Cus. The denial of customs duty exemption was unsustainable.

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