TaxTMI 
TaxTMI 
TaxTMI 
2011 (10) TMI 313
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....owers conferred by Section 4 of the Foreign Trade (Development and Regulation) Act 1992 has formulated the Foreign Trade Policy for 20-09-2014. Chapter IV of the Policy contains provisions for duty exemption and inter alia covers the Duty Entitlement Passbook (DEPB) scheme. The handbook of procedures, which has been notified by the Director General of Foreign Trade, makes provisions for implementing the DEPB scheme. The basic object of the DEPB scheme is to neutralize the incidence of customs duty on import content of export products. Neutralization is provided by way of a grant of duty credit against the export product. An exporter may apply for a credit at a specified percentage of the FOB value of exports made in freely convertible currency. Credit is made available against such export products and at such rates as may be specified by the Director General of Foreign Trade by way of a public notice. The credit can be utilized for the payment of customs duty on freely importable items and/or restricted items. 4. By a public notice dated 5 November 2008 general instructions were issued by the Director General of Foreign Trade for DEPB rates. The DEPB schedule prescribes sev....
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.... on exports made on or after 1 April 2011. Similarly, another public notice came to be issued on 4 August 2011 as regards the extension of DEPB benefits on the exports of cotton, with effect from 1 October 2010 under Sr. No.22D of the schedule of rates of the product group 'miscellaneous products'. Consequently, exports of cotton made on or after 1 October 2010 have been made entitled for the grant of DEPB benefits. 7. The dispute in the present case relates to exports of cotton made after 21 April 2010, but prior to 30 September 2010. As noted earlier, the DEPB benefits on cotton have been restored with effect from 1 October 2010. 8. Counsel appearing on behalf of the Petitioner submitted that the grant of DEPB benefits is governed under the substantive provisions of Chapter IV of the Foreign Trade Policy. The Director General of Foreign Trade under the Handbook of procedures and even statutorily is vested with the power to implement the policy. The Director General of Foreign Trade notifies the product groups and the schedule of rates. The duty credit under the scheme is calculated by taking into account the deemed import contained as per the standard input output....
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....the exports of cotton after that cut off date. Hence, it was urged that it was open to the Director General of Foreign Trade to issue a policy circular on 31 March 2011 withdrawing the benefits under the DEPB scheme on the export of cotton with effect from 21 April 2010. 10. The Central Government is empowered to formulate and announce the export and import policy and to amend that policy under Section 5 of the Foreign Trade (Development and Regulation) Act 1992. The Director General of Foreign Trade is under Section 6 vested with the statutory authority to advice the Central Government in the formulation of the exim policy and is made responsible for carrying out the policy. Paragraph 2.3 of the policy is to the following effect: "2.3 Interpretation of Policy If any question or doubt arises in respect of interpretation of any provision contained in FIP, or classification of any item in ITC (HS) or HBP v1 or HBP v2, or Schedule of DEPB Rates (including content, scope or issue of an authorization there under) said question or doubt shall be referred to DGFT whose decision thereon shall be final and binding." 11. The Director General of Foreign Trade i....
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....awn on 21 April 2010, no provision was made for the withdrawal of benefits in respect of the exports of cotton until 31 March 2011. There was no specific entry in the schedule of rates pertaining to cotton as there was in regard to cotton yarn including Melange yarn (Sr. No.78 of the product group textiles). Exports ' ' of cotton were governed by Sr. No.22D of the miscellaneous product groups. Sr. No.22D as noted earlier was a residuary item relating to export products covered under standard input output norms for which no specific rates were notified, packed in any packaging material. The Petitioner has placed on the record notifications issued by the Director General of Foreign Trade withdrawing with immediate effect DEPB benefits which were hitherto available inter alia in respect of the export of the skim milk products (by a notification dated 17 April 2008) and on exports of Basmati rice (by a notification dated 3 April 2008). This has been pressed in aid to submit that where the DEPB benefit has been withdrawn, it has been withdrawn with prospective effect. Be that as it may, the issue in the present case is really an issue of the existence of authority or power. The Director....