(a) Assessee was manufacturer and exporter of goods. It imported raw material and paid Basic Customs Duty using DEPB scrip. It claimed duty drawback of basic customs duty after exporting goods.
(b) The department denied its claim on the ground that the duty was not paid in cash but through DEPB scrip. Further, department also contended that the imports made under DEPB scheme were exempt from payment of customs duty and therefore, it could not be stated that the imports had suffered customs duty. But assessee was of the view that payment through DEPB scrip would also deemed as 'payment of duty' and it was eligible for drawback.
The High Court held as under:
(1) The drawback is allowed on export of goods at such rates as may be determined by the Central Government. Further, rules are made therein which provide that drawback would not be available in various categories. None of these categories include the payment of customs duty on the goods through DEPB scrip.
(2) Moreover, in case of Liberty India v. CIT  317 ITR 218/183 Taxman 349, the Apex Court held that payment of import duty through DEPB scrips did not mean that goods had not suffered import duty.
(3) Since, import of goods under dierent other schemes substantially stand on the same footing, drawback could not be denied merely because duty was paid by using DEPB scrips. Therefore, duty paid using DEPB scrip would also be eligible for duty drawback. -  71 taxmann.com 202 (Gujarat)