TaxTMI 
TaxTMI 
2009 (12) TMI 267
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.... Duty Entitlement Pass Book (DEPB) scheme for shipment of various classified goods outside the country. The DEPB can be used for setting-off the import duty and can also be traded. All the goods including the raised hatch'/ 'hatch', exported by the petitioner fall under Item No. 530B of Product Group; Engineering Products entitled to IJEPB to the extent of 8% of the FOB value of the goods exported upto the maximum of Rs.400 per kg. as provided in the schedule of DEPB. 3. Para 2.3 of Chapter 11 of the Foreign Trade Policy 2004-09, provide that any interpretation of the policy about the classification of any goods of any item or schedule or DEPB rate shall be referred to the DGFT, whose decision shall be final. Para 2.3 is quoted as below: "2.3. Interpretation of Policy If any question or doubt arises in respect of the interpretation of any provision contained in this Policy, or regarding the classification of any item in the ITC (US) or Handbook (Vol. 1) or Handbook (Vol. 2), or Schedule of DFPB Rate the said question or doubt shall be referred to the Director General of Foreign Trade whose decision thereon shall be final and binding. If any question or doubt arises whether a ....
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....r export claiming undue DEPB benefits, is supported with the test report of Central Revenue Control Laboratory (CRCL). There may not be any doubt that the proper authority for deciding con fiscability and penal action for rendering the goods liable for confiscation is un der the Customs Act, 1962. The DGFT action of cancellation of license issued against export of misdeclared goods starts once the adjudicating authority of customs confirms the charge of misdeclaration. 7. The Commissioner did not find anything in Circular No. 15 of 1997- Cus. to take away the authority of the Customs Officer, to deal with the goods admitted to be exported by misdeclaration under the provisions of Customs Act, 1962. The exporter has enclosed the clarification on admissibility of DEPB dated 29-4-2008 from DGFI'. The said classification was issued by DGFF on the application of the exporter without disclosing the result of the physical examination by DRT, CRCL test report and the fact of investigation. The DRT investigation and CRCL test report has revealed that the goods are not as per the declaration in the export shipping bill. The Commissioner also forwarded a copy of the show cause notice to DGFT....
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....e goods are liable for confiscation under Section 113(i) and (d) of Customs Act, 1962. 10. Shri Mahesh Chandra, Joint Director of Foreign Trade at Kanpur has stated in his affidavit that if any question or doubt arise in respect of inter pretation of any provision contained in FTP, or classification of any item in ITC (US) or HBP - Volume 1 of HBP volume 2 or schedule of DEPB rates (including contents, scope or issue of an authorisation thereunder) the question or doubt is referred to DCFT, whose decision thereon shall be final and binding. Chapter 4 of the HP provides for grant of DEPB benefit is subject to fulfillment of conditions stated therein and the procedure laid thereunder. Para 4.42 of Chapter 4 of Hand Book of Procedure volume 1 (2004-09) it is stated that credit under DEN shall be utilised for payment of customs duty on any item including capital goods. On the basis of declaration made by company and also certificate from Chartered Engineer produced by it, stating that components had been manufactured through Forging Process and also Bill of Material produced by the firm, DEPB Committee i.e. an inter-ministerial committee, clarified that the product 'Hatch is covered u....
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....on goods. 12. The Customs Act, 1962 provides in Section 11, in Chapter IV the prohibitions on importation and exportation of goods for purposes of maintaining security of India, public order and standards of decency or morality etc provided in sub-section; and detection of illegally imported goods and prevention of shortage of goods and the disposal thereof in Chapter WA. The customs authorities can prevent or detect illegal export of goods The powers to exempt lies with the Central government, by notification in the official gazette to exempt any goods or any class or description from any of the provisions of Chapter IVA or Chapter WE. The levy and exemption from customs duties is provided in Chapter V. The Act provides for advance rulings in chapter VB. The provisions relating to conveyances carrying imported or exported goods are given in Chapter VI. The clearance of imported goods and exported goods in provided Chapter VII. Goods in transit in Chapter V Warehousing in Chapter IX, drawback in Chapter-X; special provisions regarding baggage, goods i....
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....nalty is provided under sub-section (2). Section 12 and 13 providing for the penalty not to interfere with other punishment and the adjudicating authority are quoted as below: "12. Penalty or confiscation not to interfere with other punishments - No penalty imposed or confiscation made Under this Act shall prevent the imposition of any other punishment to which the person affected thereby is liable under any other law for the time being in force. 13. Adjudicating Authority - Any penalty may be imposed or any confiscation maybe adjudged under this Act by the Director General or, subject to such limits as may be specified, by such other officer as the Central Government may, by notification in the Official Gazette, authorise in this be half." 15. A notice is required to be given under Section 14 of the Act before making any order imposing penalty or adjudication or confiscation Chapter V provides for appeal and revision and the miscellaneous provisions including powers to make rules is provided in Chapter VI. 16. The scheme of the Customs Act, 1962 and the Foreign Trade (Development and Regulation) Act, 1992, provide that whereas the officers on the checkpost or port ....
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....er, are not entitled to adjudicate over description and classification of the goods for DEPB. 18. In Pradip Potyflis Pvt. Ltd. v. Union of India, 2004 (173) ELI. 3 (Bom.) a somewhat similar question arose for consideration. The petitioner had exported filter plates and accessories made by Polypropylene under DEBP Scheme through Bombay coastal area at Bombay for which DEBP licenses were issued by DCFF Surat. The customs authorities rejected the claim for credit of duty on the grounds that the goods exported did not fall under Chapter 39 of ITC (HS) classification of export import item, which is a pre-condition for claiming credit under Sl.14, of public Notice No. 6, dated 15-4-1998. It was not in dispute that DEBP licenses were issued against export of Polypropylene filter plates arid accessories as contained in shipping bills, which was required to be forwarded to the customs for verification of the particular set out in the shipping bills and necessary endorsements. The verification of the customs authorities under Circular No. 15 of 1997 dated 3-6-199? was restricted to the description, quantity, and FOB value of the export products set out in the shipping bills The customs auth....