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of <h1>Customs Overreach Denied: DEPB Scheme Benefits for Polypropylene Exports Upheld by Court Decision.</h1> The HC ruled in favor of the petitioners, determining that Customs authorities had no basis to deny DEPB Scheme benefits for the export of Polypropylene ... EXIM - Export of Polypropylene filter plates and accessories - benefit of Duty Entitlement Pass Book (DEPB) Scheme - HELD THAT:- In this case, it is not in dispute that pursuant to the application made by the petitioners seeking benefit of DEPB Scheme in respect of export of filter plates and accessories made of Polypropylene, two DEPB licences were issued by the DGFT in favour of the petitioners. The endorsement made on the licences clearly show that the DEPB licences have been issued against the export of Polyproplyene filter Plates and accessories as contained in the shipping bills furnished by the petitioners. The said DEPB licences were required to be forwarded to the Customs for verification of the particulars set out in the shipping bills and necessary endorsement thereon. Under Circular No. 15/97, dated 3-6-1997 the verification by the Customs authorities was restricted to the description, quantity and FOB value of the export product set out in the Shipping Bill. It is not the case of the Customs authorities that there is any discrepancy in the description, quantity and FOB value of the export product. Under the circumstances, when the DEPB licence is issued by the Licensing authorities specifically holding that the Petitioners are entitled to avail the benefit of the DEPB Scheme in respect of Polypropylene filter plates and accessories, the Customs authorities were, not justified, in rejecting the claim of the Petitioners on the ground that the Articles exported by the Petitioners were not covered under Chapter 39 ITC (HS) classification. Whether an item falls under Chapter 39 of ITC classification or not is for the licensing authorities to consider before issuing the licence. Even after the issuance of the licences, the licensing authorities have not taken any steps to declare that the said licences were wrongly issued. Once the 1icensing authorities have held that the export product is covered under the DEPB Scheme and have issued the DEPB licence, it is not open to the Customs authorities to hold that the said export product is not covered under the DEPB Scheme. Thus, the petition succeeds. Issues involved: Whether petitioners are entitled to avail the benefit of Duty Entitlement Pass Book (DEPB) Scheme on export of Polypropylene filter plates and accessories.Summary:1. The Customs Authorities denied the benefit of the DEPB Scheme to the petitioners as they claimed that the goods exported, polypropylene filter plates and accessories, did not fall under Chapter 39 ITC (HS) classification, which is a prerequisite for the scheme. 2. The DEPB Scheme provides credit on the FOB value of exports, and DEPB licenses are issued by the Director General of Foreign Trade (DGFT) for availing benefits. The scheme allows for the utilization of DEPB credit for customs duty payment on imported goods.3. The petitioners exported filter plates and accessories made of Polypropylene under the DEPB Scheme. Customs rejected their claim based on the goods not falling under Chapter 39 of the ITC classification, as required by a public notice.4. The public notice was amended multiple times, specifying that articles made solely of Polypropylene are entitled to DEPB Scheme benefits, irrespective of falling under Chapter 39 of the ITC classification.5. The petitioners argued that once the licensing authorities issued DEPB licenses for the goods, Customs cannot deny the benefit. They cited a government circular limiting Customs' role to verifying export product details, which were found correct in this case.6. Respondents contended that DEPB licenses were subject to Customs verification, and since the goods did not meet the Chapter 39 requirement at the time of export, the benefit was rightly denied.7. The Court found that the DEPB licenses were issued for Polypropylene filter plates and accessories, and Customs had no grounds to reject the claim based on ITC classification. Licensing authorities determine eligibility for the DEPB Scheme, and Customs cannot overturn their decision.8. The Court ruled in favor of the petitioners, quashing the Customs authorities' decision to deny DEPB benefits. No costs were awarded in this case.
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