DEPB- Error in classifiation

[Pradeep Jain]

Dear Sir,

We had made export under DEPB in the year 2008-2011 and got the DEPB license from DGFT . In between during export It came to notice of Customs Authority that in some product there is error in DEPG classification , although DEPB rate is same ,for which licenses are  already taken . At the time of registration of the said license department has raised this query and hold the DEPB license for registration and issue redemption certificate. Department is planning to issue SCN.

Now query is that:-

1- Can any export benefits be denied due to technical error ?

2- what are remedies available with us to  avail this benefits.

If possible please mentioned related case law and rules and section also.

Regards

Pradeep Jain

[YAGAY andSUN]

Dear Pradeep,

There are plethora of judgments on the either side of this aforesaid matter.  We understand from the above query that Department is willing to issue a SCN.  We would like to have a look on the SCN and accordingly would be able to draft a reply against the impugned SCN.

After receiving the SCN, you may contact us in this matter.  We would be glad to work with your organization.

Regards

Team YAGAY & SUN,

(Management and Indirect Tax Consultant).

[Pradeep Jain]

Dear Pradeep K,

Department has no firm view about the issue of SCN and the matter is pending since 2011. If the details are provided on the above mentioned line can refrain from SCN.

Regards

Pradeep Jain

[YAGAY andSUN]

Dear Pradeep,

If this matter was known to the Department since 2011, then, Department cannot issue SCN now as this matter is barred by limitation.  Write them to resolve this matter without any further delay.

Regards,

Team YAGAY & SUN

(Indirect Tax Consultants)

AI Summary

Limitation defence may bar a show cause notice over a known DEPB classification error, enabling challenge to withheld export benefits. Customs discovered a product classification error on DEPB licences, placed the licences on hold, and intended to issue a show cause notice and withhold redemption; the core issues are whether export benefits may be denied for a technical classification error and what remedies-including contesting the SCN and invoking a limitation defence where authorities had prior notice-are available to the exporter.