issue for consideration is: whether profit from Duty Entitlement
Passbook Scheme (DEPB) and Duty Drawback Scheme could be said to be
profit derived from ... profit of
the industrial undertaking on account of DEPB and Duty Drawback credited
to the Profit & Loss account. The Assessing Officer denied deduction under
assessee on sale of the
Duty Entitlement Pass Book (for short ‘the DEPB’) represents profit on
transfer of DEPB under Section 28(iiid ... year relevant to
the assessment year 2002-2003, the assessee sold the DEPB and DFRC
(Duty Free Replenishment Certificate) which had accrued to the
assessee
Crores received on the sale of Duty Entitlement Pass Book
(DEPB) credit. The export turnover of the Appellant was over Rs.10
Crores. The Assessing ... ground that under the third
proviso to sub section (3), the DEPB credit could be considered for
deduction in the case of an assessee with
with a subsidy relatable
to cost of manufacture but dealt with a DEPB drawback scheme, which related
to export of goods and not manufacture ... referring directly to Section 80-IB in which the
question was whether DEPB credit or Duty drawback receipt could be said to
be in respect
which
reads as under:
"8. On the nature of DEPB it was submitted that the
amount of DEPB was granted under Exim-Policy issued ... Trade (Development and Regulation) Act, 1992.
According to the appellant(s), the DEPB Scheme is a
Duty Remission Scheme which allows drawback of
import charges
Govt. of India, Ministry of Commerce,
called Duty Entitlement Pass Book (DEPB) scheme as a part
of the Export-Import Policy for the period ... imported without payment of customs duty
against the credit available under a DEPB. The procedure
specified for issue of DEPB scrips entails submission
Exports (Control) Act, 1947 . Those were replaced by Duty
3
Entitlement Passbook (DEPB) provided for in the Exim Policy 1997-
02 under the Foreign Trade ... sale of REP licences;
the other five arise from the sale of DEPB. In those five cases it is
contended on behalf of the appellants
Limited filed six shipping bills
under the Duty Entitlement Pass Book Scheme (DEPB Scheme) bearing
Nos. 136 to 141 dated 06.01.2001. M/s Aadee Exports ... said shipping bills were
filed for post export benefit under the DEPB Scheme claiming credit rate @
15% vide Sl. No.20(iii) of the DEPB
goods under the License or the
availment of credit under the DEPB Scrip by the
Transferee of the License/DEPB Scrip prior to
cancellation ... such License/DEPB Scrip by the
appropriate authority, could be held to be illegal or
improper?
F. Whether the provisions of proviso (2) Sub-Section
entry No. 67 was inserted which reads as: "REP, DEPB and other tradable licenses". Similarly by the second amendment, in terms of newly ... transfer of credit lying in Duty Entitlement Passbook, (in short, DEPB) is illegal, as the same is not goods and there was no sale
