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5. So far as Duty Exemption Scheme is concerned, the relevant paragraph No. 114 is reproduced hereunder :

"114. An application may be made by a Super Star Trading House, Star Trading House, Trading House or Export House and manufacturer exporter in Appendix XVII-A to the Designated Authority attached to the Custom House at Bombay, Calcutta, Delhi and Madras. The Designated Authority will issue a pass-book to such exporter in Appendix XVII-C. As and when export is made, the ex-porter will file a declaration along with Export Promotion copy of the Shipping Bill in Appendix XVII-B to the Designated Authority along with the relevant documents. The Pass Book holder should specify in the export documents including the shipping bill that the export is under the Pass Book Scheme in terms of Paragraph 54 of the Policy. Based on the standard input output and value addition norms (referred to in Paragraphs 51 and 60 of the Policy), the Designated Authority will determine the basic customs duty deemed to have been paid by such an exporter and the said amount will be credited in the Pass Book. The exporter can utilise the credit so given for import of permissible items."

8. Similarly, clause 114 has also been amended. That reads as under :

"114. An application may be made by a Super Star Trading House, Star Trading House, Trading House or Export House and manufacturer exporter in Appendix XVII-A to the Designated Authority attached to the Custom House at Bombay, Calcutta, Delhi and Madras. The Designated Authority will issue a pass-book to such exporter in Appendix XVII-C. As and when export is made, the ex-porter will file a declaration along with Export Promotion copy of the Shipping Bill in Appendix XVII-B to the Designated Authority along with the relevant documents. The Pass Book holder should specify in the export documents including the shipping bill that the export is under the Pass Book Scheme in terms of Paragraph 54 of the Policy. Based on the standard input output and value addition norms (referred to in Paragraphs 51 and 60 of the Policy), the Designated Authority will determine the basic customs duty deemed to have been paid by such an exporter and the said amount will be credited in the Pass Book. The exporter can utilise the credit so given for import of permissible items."

41. Learned counsel for the petitioner drew our attention to the language used in Clause 55 of Chapter VII - Duty Exemption Scheme. Learned counsel for the petitioner also drew our attention to the deeming fiction as found in Clause 54 of the said Chapter, with regard to the pass book scheme. It states that "Based on the standing input-output and value addition norms (referred to in Paragraphs 51 and 60 of the policy), the Designated Authority will determine the basic customs duty deemed to have been paid by such an exporter and the said amount will be credited in the Pass Book. Thus, while producing the goods as stated in the policy, the producer is deemed to have imported the quantity as shown against the material exported and credit to that extent is to be given.

46. Learned counsel emphasised Clause 114 of the passbook scheme, with a view to point out that the designated authority will have to determine the basic customs duty deemed to have been paid by such an exporter and the said amount will be credited in the pass book. In view of this deeming fiction, it was submitted that benefit cannot be denied to the petitioner. It is also clear that in case of advance licence, there is a physical import of raw material out of which goods are produced and are exported. So far as the pass book scheme is concerned, that is not the scheme and the words used "deemed import" clearly indicates that even without importing the material the exporter might have produced the goods and exported it, and that is sufficient compliance.