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12. The learned Commissioner (Appeals) has erred in placing reliance upon the ruling of the Hon'ble Madras High Court in the case of Tanfac Industries Ltd vs Asst. Commissioner, Cuddalore [2009 (240) ELT 341 (Mad)], rendered in the context of DEPB scheme to hold that the goods imported under such schemes cannot be treated as exempted. Assailing the findings, it is urged that in Tanfac Industries Ltd (supra), the Hon'ble High Court dealt with the issue of interest on warehoused goods, where such demand arose on account of clearance of goods beyond 90 days. The issue in the instant case was not involved therein. Further, the said judgment in Tanfac Industries Ltd (supra) has been considered by the Hon'ble Gujarat High Court in Gujarat Ambuja Exports (supra), whereby, it was held that notifications issued under Sec 25 of the said Act grants total exemption from the payment of BCD and ACD and the conditions contained in such notifications are only procedural in nature. The judgment in the case of Gujarat Ambuja Exports (supra) being passed at a later point of time needs to be considered based on the principle of "the latter the better". Further urges that the jurisdictional High Court of Andhra Pradesh in CCE vs Kedia Overseas Ltd (supra) has held that the condition of debit of the exempted duties to the scrips is merely procedural as the scrip has value and would not change the nature of benefit, from one being of exemption having been issued in exercise of powers conferred under Sec 25 of the Customs Act, thereby waiving the actual collection. It has also been held in Bhushan Steel & Strips Ltd (supra) that the condition as regards the availability of drawback or Cenvat credit against the amount debited from the said scrips does not alter the factum of exemption.

28. The Apex Court has thus acknowledged the fact that under the DEPB scheme, which is similar to MEIS, the debit to scrips reflects payment of duty.

29. Following the aforementioned observations of the Apex Court, the Hon'ble Madras High Court in Tanfac Industries Ltd (supra) has held that it is clear that under DEEC scheme, the clearance is allowed duty free, whereas, under DEPB scheme, the exporters are issued DEPB scrips, which allows them specific amount to be utilized for payment of duty. Therefore, the importers who use DEPB scrips pay duty not by cash but by way of credit. Thus, it is evident that goods cleared under DEPB scheme cannot be treated as exempted goods but they can only be treated as duty-paid goods and therefore, attracts consequential interest. The debit of any amount under the DEPB scheme is a mode of payment of duty on the imported goods and cannot be treated as exempted goods, unlike the goods under DEEC scheme.