Export Benefit Cannot be Denied Unilaterally by Customs Authorities: CESTAT Allows Appeal, Notes Legal Infirmity [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, allowed an appeal and noted legal infirmity, holding that export benefits cannot be denied unilaterally by Customs authorities.

The Commissioner of Customs (Preventive, Tiruchirappalli) had cancelled Let Export Orders issued for 564 Shipping Bills covering the period from February 2008 to September 2011 and directed re-assessment of the same under Section 17 of the Customs Act, 1962. It had also been held that the goods exported were liable for confiscation under Sections 113(d) and 113(i) of the Act thus attracting penalties under Sections 114 and 114AA.

M/s Ganges Internationale Private Limited, the appellant, had claimed DEPB benefits wherein the description of the export product was given as “galvanised transmission line towers and parts thereof”. The benefit was denied later on the ground that they were not towers for transmission of electricity, but rather were telecom towers for cellular use.

The appellant side contested the denial, arguing that only the Director General of Foreign Trade (DGFT) was the competent authority to decide whether the grant of the benefit was correct or not.

The CESTAT clarified that the power to question or deny DEPB benefit for items exported solely rests with the DGFT and not with the Customs authorities. The counsel for the appellant has brought attention to the fallacious assumption that the Act empowered the Commissioner to go ahead with the proceedings for denial of DEPB benefit and the tribunal made note of this.

The two member bench of Vasa Seshagiri Rao (Technical Member) and P. Dinesha (Judicial Member) also took note about certain legal infirmities with respect to Sections 51 and 17. CESTAT therefore allowed the appeal, setting aside the order of the Commissioner.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates