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(2)Whether the denial of DEPB benefit to the petitioner by virtue of the decision taken by the 4th respondent based on the impugned policy Circulars is valid and proper.

3.The petitioner is a Domestic Tarrif Unit (DTA) carrying on business of manufacturing Denim Fabrics. The petitioner has exported the fabrics by utilising the manufacturing facility of 100% EOU at Hosur, who is termed as Job Worker who carries out weaving operations before the manufacture of Denim Fabrics at the factory of the petitioner. The Petitioners' case is that the Fabrics were exported in terms of Chapter VII of EXIM Policy 1997-2002 under the DEPB scheme following the requirements of para 3.54 of the said policy. It is further submitted that in terms of para 7.14 of EXIM Policy 1997-2002, an exporter not desirous of going through licensing route, is given an optional facility under DEPB Scheme and he is entitled to apply for credit at a specified percentage of FOB value of exports made in freely convertible currency. The credit were made available against such export products and at such rates specified by the Director General of Foreign Trade (DGFT) by way of public notice issued in this behalf for import of raw materials, intermediate component, parts, packing materials, etc. In terms of para 7.17 of the earlier policy and 4.3.5. of the new Export Import Policy 2002-2007, exports made under DEPB scheme are not eligbile for drawback. Only additional duty of customs paid in cash on inputs under DEPB were made eligible to be adjusted as CENVAT or duty drawback as per the rules framed by the Department of Revenue. Thus, the petitioner would state, only Addiitional Duty of Customs is eligible for CENVAT/Drawback.