JINDAL DRUGS LIMITED Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THE petitioners have raised pure question of law in this petition. The petitioners contend that credit in the Duty Entitlement Pass Book ("d. E. P. B. " for short) issued under the Export Import Policy 1977-2002 ("said Policy" for short) cannot be treated as "goods", as such not classifiable under Schedule C of the Bombay Sales Tax Act, 1959. FACTUAL SCORE

(2.) THE first petitioner is a company incorporated under the Companies Act, 1956 engaged in the manufacture, sale and export of pharmaceuticals, drugs, dyes and dye intermediates. The first petitioner is a trading house as contemplated under the said policy.

(3.) IF one turns to the aforesaid policy, the said Policy (Chapter VII) provides for the Duty Exemption Scheme consisting of Duty Free Licence and Duty Entitlement Pass Book. The objective of the D. E. P. B. is to neutralise the incidence of basic customs duty on the import content of the export product. The neutralisation is to be provided by way of grant of duty credit against the export product. The duty credit under the said scheme is calculated by taking into account the deemed import content of the said export product as per Standard Input Output Norms and determines basic customs duty payable on such deemed imports. The value addition achieved by export of such product is also taken into account while determining the rate of duty credit under the scheme. Under the D. E. P. B. Scheme an exporter is eligible to claim credit as a specified percentage of F. O. B. value of exports made in freely convertible currency. The credit is available against such export products and at such rate as may be specified by the Director General of Foreign Trade by public notice issued in this behalf. Any item except those appearing in the Negative list of imports is allowed for import without payment of basic customs duty, special duty of customs as well as additional duty of customs against the credit under the D. E. P. B. Scheme. The holder of D. E. P. B. shall have an option to pay additional customs duty, if any, in cash as well.