The peak rates of Customs duties were brought down from 35 per cent to 30 per cent in the Budget 2002. As a consequence, the Duty Entitlement Passbook (DEPB) rates have also to be revised downwards.
As usual, the Director General of Foreign Trade (DGFT) might notify the revised rates with effect from April 1.
Naturally, many exporters might like to export their goods before April 1 to take advantage of the current DEPB rates.
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DGFT's Policy Circular No. 19 dated 10.07.98 says that wherever DEPB rates have been reduced or value capping has been imposed, the reduction of rate or imposition of value cap shall not be applicable wherever the consignment of exports under DEPB have already been handed over to the Customs authorities prior to the date of notification for examination and clearance for exports.
What is meant by handing over consignment to Customs?
This question came up before the Tribunal [2002 (140) ELT 424 (Tri. Delhi)], in the case of Cannon Steels Pvt Ltd (CSPL).
CSPL filed eight shipping bills, through their Customs House Agent (CHA), for export of acrylic shawls on March 28, 2000, under the DEPB scheme claiming DEPB at the rate of 17 per cent.
Part of the goods covered by the eight shipping bills arrived at the shed of Container Corporation of India (Concor) at the Tughlaqabad inland container depot (ICD) at Delhi on March 29, 2000, and rest of the goods were received at 6 pm on March 31, 2000.
The DEPB rates were reduced to 9 per cent with effect from April 1, 2000. CSPL claimed DEPB at 17 per cent on the grounds that goods were handed over to the Customs before the reduced DEPB rates came into effect.
The Customs rejected the claim on the grounds that the goods were never presented for examination before April 1, 2000. The packages covered by the eight shipping bills were required to be stuffed in a single container.
For that the permission was granted by the Customs only on April 1, 2000, i.e., after the reduced rates had come into effect.
The tribunal observed that the CHA had neither got the fact of arrival of goods with the Customs nor handed over the packing details to the Customs on March 31, 2000.
No doubt, CSPL had communicated to the Customs on March 31, 2000, that the export consignment should not be held up due to non-functioning of the computer system but there was no other evidence to show that the goods were actually handed over to the Customs on March 31, 2000.
The tribunal held that mere handing over of the goods to Concor, without packing details or permission of the Customs for clubbing the eight shipping bills for stuffing in a single container or getting the arrival of goods recorded with the Customs, could not amount to actual presentation of the export goods for examination.
The tribunal relied on the Supreme Court judgment in the case of Mihir Textiles Ltd case [1997 (92) ELT 9 (S.C.)], wherein it was held that where the exemption/ benefit depends upon the satisfaction of certain conditions, the same can not be granted unless such conditions are complied with, even if such conditions are only directory.
Accordingly, the tribunal upheld the decision of the Customs to grant only 9 per cent DEPB.