ALFA INTERNATIONAL Vs. UNION OF INDIA

JUDGEMENT

(1.) The challenge in the present writ petition is to the order dated 10-1-2008, Annexure P-13, passed by the Director General of Foreign Trade setting aside the order dated 4-5-2006 passed by the Additional Director General of Foreign Trade whereby it was ordered to recover the Duty Entitlement Passbook Scheme (for short "DEPB") benefit along with interest; suspension of licence for a period of six months; and imposing penalty equivalent to 50% of the Free On Board (for short "FOB") value of export.

(2.) The facts leading to the said order are that the petitioner exported goods through Dry Port, Ludhiana. The said goods were exported under Duty Entitlement Pass Book Scheme. The said Scheme is used for importing goods without payment of custom duty. The objective of the Scheme is to neutralise the incidence of Customs duty on the import content of the export product. The neutralisation shall be provided by way of grant of duty credit against the export product.

(3.) The Scheme was part of Export and Import Policy for the period 1st April, 1997 to 31st March 2002 as contained in Chapter VII thereof. Under paragraph 7.25 of the Scheme, an exporter is eligible to claim credit as specified percentage of FOB value of exports made in freely convertible currency. By virtue of Notification No. 34 of 1997/Customs, dated 7-4-1997 published by the Central Government in exercise of powers conferred by sub- section (1) of Section 25 of the Customs Act, 1962, the Central Government has exempted goods imported into India in terms of Duty Entitlement Pass Book by the Licensing Authority in pursuance of paragraph 7.25 read with paragraph 7.29 of the Export and Import Policy.