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(i) assessee had an option to choose either the Duty Drawback or DEPB Scheme; and

(ii) rate of drawback credit was higher than the rate of credit allowable under Duty Entitlement Pass Book Scheme, 5.2.1 It is submitted that DEPB credits are granted under the Foreign Trade (Development & Regulation) Act, 1992. DEPB credits are granted under the Import & Export Policy issued in terms of powers conferred under section 5 of the said Foreign Trade (Development & Regulation) Act, 1992. Chapter 7 of the Export Import Policy lays down various Duty Exemption and Duty Remission Schemes. DEPB Scheme is one of the Duty Remission Scheme given under the said Chapter 7 of the Export Import Policy. The salient features of the DEPB Scheme and the license granted under the DEPB scheme are analyzed hereunder. In order to promote exports from India, the Government has framed special schemes under which imports are permitted free of duty or at concessional rate of customs duty. Chapter 7 of the Policy lays down various Duty Exemption/Remission Schemes. Duty Exemption Scheme enables import of inputs required for export production. The Duty Remission Scheme enables post export replenishment/remission of duty on inputs used in export product. Issue of an Advance Licence is one of the Duty Exemption Scheme(s), which allow import of inputs duty free that are physically incorporated in the export product. DEPB scheme is one of the Duty Remission Schemes that allows-drawback of import charges paid on inputs used in the export product. DEPB scheme is an optional facility for exporters not desirous of going through the licensing route. The objective of DEPB Scheme is to neutralise the incidence of customs duty on the import content of the export product in order to enable the exporters competitive in the foreign market. The neutralisation is provided by way of grant of duty credit against the export product. Under the Scheme, an exporter applies for credit, at a specified percentage of FOB value of exports, made in freely convertible currency. The credit is available against such export products and at the rates specified for import of raw materials, intermediates, components, parts, packaging material etc. Para 7.17 clearly stipulates that the exports made under the DEPB Scheme is not entitled for duty drawback. This is understandably provided to avoid double benefit, one by way of DEPB credit and other by way of duty drawback. The credit is obtained on DEPB rates in relation to the FOB value of exports and is valid for a period of 12 months from the date of issue. The DEPB credit and the items imported there-against are freely transferable.