SAD exemption allowed for import of goods under DEPB from Guntur ICD
Sometimes, the after effects of omissions in drafting notifications may be felt even after 10 years. In 1997, when the DEBP exemption Notification 34/97-Cus dated 7.4.1997 was issued, Guntur ICD was not mentioned as a specified port under this notification. This omission was made good vide notification No.87/97-Cus dated 27.11.1997, by which ICD, Guntur was also included in notification No.34/97-Cus as an eligible port under the DEPB Scheme. But, what about the period from7.4.1997 to 27.11.1997? The Indian Tobacco Association took the matter to AP High Court and the Department to Supreme Court and the SC upheld the order of the High Court of Andhra Pradesh stating that in this case the Central Government only intended to rectify a mistake and, thus, the same will have retrospective effect and retro-active operation.
Consequent to the above, the DEPB licences were issued by DGFT sometime in September, 2006 in respect of tobacco exports made from ICD, Guntur during the period 7.4.1997 to 26.11.1997. These licences are reportedly issued with an endorsement that "this DEPB is issued under Customs notification No. 34/97 dated 7.4.1997"
Now the question is whether exemption from the special additional duty leviable under section 3(5) of CTA, 1975 can be allowed for the goods imported under DEPB Scheme against the above licences issued in pursuance of the Supreme Court judgement (as was prevalent during the period 7.4.1997 to 26.11.1997) or the said duty is required to be debited from the DEPB scrip / licence as is now being done in respect of regular DEPB licences.
The Board after consulting the Law Ministry has clarified that, exemption from special additional duty may be allowed for the goods imported under the DEPB Scheme against licences issued in pursuance of Supreme Court judgement during the period from 7.4.1997 to 26.11.1997 and that this duty is not required to be debited from the DEPB licence / scrip.
CBEC CIRCULAR NO. 36/2007-Cus., Dated: October 3, 2007