NOBLE RESOURCES Vs. UNION OF INDIA

JUDGEMENT

(1.) Rule, by consent returnable forthwith. With the consent of Counsel and at their request the Petition is taken up for hearing and final disposal.

(2.) In these proceedings the challenge is to the validity of a public notice issued on 31 March 2011 by the Director General of Foreign Trade stipulating that the export of cotton shall not be entitled to DEPB benefits with respect to shipments made on or after 21 April 2010. The Petitioner has also questioned the legality of consequential notices of demand seeking to recover DEPB benefits allowed in respect of the export of cotton.

(3.) The Petitioner engages in the business of the manufacture and export of cotton bales. The Union Government in exercise of the powers conferred by Section 4 of the Foreign Trade (Development and Regulation) Act 1992 has formulated the Foreign Trade Policy for 2009 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.