(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: