ADG DRI Does Not Have Power To Declare DEPB Scripts Issued By DGFT Null And Void: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that ADG DRI (Additional Director General of the Directorate of Revenue Intelligence) does not have power to declare DEPB (Duty Entitlement Pass Book) scripts issued by DGFT Directorate General of Foreign Trade) null and void. Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) stated that the customs officers who cleared the goods also must have also accepted the DEPB scrips in good faith. At any rate, the DEPB scrips were validly issued by the DGFT and neither the Commissioner nor the DRI has the power to overrule the decision of the DGFT and hold that the DEPB scrips were ab initio null and void. The case of DRI was that M/s J. Minakshi, M/s JAY ESS and M/s Kanishka the three exporters had filed false declarations in Annexure I and II in order to avail excess drawback and they had also fraudulently obtained Duty Entitlement Passbook scrips from the Directorate General of Foreign Trade on such exports. Instead, the exporters bought goods from market and then exported them declaring them to be goods manufactured without availing CENVAT credit in order to avail drawback as per higher AIR of drawback. The DRI concluded that the three exporters had mis-declared in Annexure I & II filed along with shipping bills and thereby availed ineligible drawback which was recoverable from them. The DRI further concluded that the DEPB Scrips were issued by DGFT to the exporters based on the wrong declarations and wrongly obtained BRCs. Therefore, DRI concluded that the DEPB scrips were ab initio, null and void. Accordingly, ADG, DRI issued the SCN followed by the corrigendum and addendum. The proposals in these were confirmed by the Commissioner in the impugned order. The Tribunal stated that the proposal in the SCN and the decision in the impugned order is that the DEPB scrips were ab inito null and void. However, these scrips were issued neither by the Commissioner who adjudicated the matter nor by the ADG DRI who issued the SCN. They were issued by the DGFT. Nothing in the Customs Act gives either the ADG DRI or the Commissioner of Customs or any other Customs Officer the power to declare the DEPB scrips issued by the DGFT null and void. The bench further opined that bank realization certificates are issued by the banks as per the guidelines of the RBI under the FEMA. The ADG, DRI who issued the show cause notice, and the Commissioner who passed the impugned order have wrongly assumed that they had the power to determine the correctness of the BRCs issued by the banks or otherwise. They had no such power under FEMA or under the Customs Act or under any other law. In view of the above, the Tribunal allowed the appeal. Case Title: Pankaj Chordia v. The Commissioner of Customs, Cargo Complex Case Number: CUSTOMS APPEAL NO. 50453 OF 2023 Counsel for Appellant/ Assessee: Shri B.L. Narasimhan, Shri Anurag Kapur, Ms. Rubel Bareja, Shri Arun Goyal, Ms. Bharti Badesra, Shri Shivleen Pasricha, Shri Krishnendu, Shri B. Bhushan, Ms. Nidhi Gupta, Shri Shubham Singh, Shri R.M. Saxena, Shri B.L. Garg, Shri Anil Kumar and Ms. Shreya Dahiya Counsel for Respondent/ Department: Girijesh Kumar Click Here To Read/Download The Order

ADG DRI Does Not Have Power To Declare DEPB Scripts Issued By DGFT Null And Void: CESTAT

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