DEPB-based input procurement bars All Industry Rate Drawback for the same export goods under strict fiscal construction.

Goods manufactured with inputs procured under the DEPB scheme were held ineligible for All Industry Rate Drawback where the applicable notifications excluded products manufactured or exported by availing DEPB. The input procurement through DEPB debit was treated as use of the scheme at the manufacturing stage, so the exporter could not combine DEPB benefits with drawback for the same export goods. The governing fiscal notifications and export policy were construed strictly and according to their plain language, with no expanded reading permitted. Accordingly, the drawback claim was not admissible and the Revenue's rejection of the claim was upheld.

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Issues: Whether goods manufactured using inputs procured under the DEPB scheme, including inputs on which duty was not paid in cash, remained eligible for All Industry Rate Drawback under the applicable drawback notifications and export policy.

Analysis: The governing notifications and export policy were read according to their plain terms. The relevant drawback notifications provided that the specified All Industry Rate Drawback would not apply where the commodity or product was manufactured or exported by availing the DEPB facility. On the facts found, the inputs used in manufacture had been procured by debiting DEPB and no duty had been paid in cash. The Court treated DEPB-based procurement as an availing of the scheme at the manufacturing stage and held that the exporter could not combine benefits under DEPB and All Industry Rate Drawback for the same export goods. It also applied the principle of strict and plain construction in fiscal matters and declined to permit any expanded reading of the scheme provisions.

Conclusion: The claim to All Industry Rate Drawback was not admissible, and the Revenue's view rejecting the drawback claim was upheld.

Ratio Decidendi: Where the governing drawback notification excludes goods manufactured or exported by availing DEPB, an exporter who has used DEPB to procure inputs cannot claim All Industry Rate Drawback for the same goods, and fiscal exemption or incentive provisions must be construed strictly according to their plain language.

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