Only DGFT Can Cancel DEPB Scrips, Not Customs CESTAT

Case Details: Pankaj Chordia vs. Commissioner of Customs, Air Cargo Complex, New Delhi (2026) 38 Centax 18 (Tri.-Del) 

Judiciary and Counsel Details

• Justice Dilip Gupta, President & Shri P. V. Subba Rao, Member (T)
• S/Shri B.L. Narasimhan, Anurag Kapur, Ms. Rubel Bareja, Arun Goyal, Ms. Bharti Badesra, Shivleen Pasricha, Krishnendu, B. Bhushan, Ms. Nidhi Gupta, Shubham Singh, R.M. Saxena, B.L. Garg, Anil Kumar  &  Ms. Shreya Dahiya, Advocotes, for the Appellants.
• Shri Girijesh Kumar, Authorised Representative, for the Respondent.

Facts of the Case

The Directorate of Revenue Intelligence (DRI) alleged that certain exporters had misused export promotion schemes by making false declarations and using Bank Realisation Certificates (BRCs), pursuant to which Duty Entitlement Pass Book (DEPB) scrips were issued by the Directorate General of Foreign Trade (DGFT). Proceeding on this basis, DRI treated the DEPB scrips as ab initio void and issued a show cause notice seeking to fasten customs duty on the users of such scrips. It was contended that the DEPB scrips were issued by DGFT and that neither DRI nor customs authorities had the power to cancel or nullify licences or scrips issued by DGFT, even where fraud was alleged. The matter was accordingly placed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

CESTAT Held

The CESTAT held that DEPB scrips were issued by DGFT and not by DRI or customs authorities, and that any finding of fraud required reference to DGFT for cancellation of such scrips. The Tribunal held that no power was conferred under the Customs Act or under section 9 read with section 6 of the Foreign Trade (Development and Regulation) Act, 1992 on DRI or customs authorities to cancel or declare DGFT-issued scrips void. It was further held that even if procured by fraud, the scrips were voidable and not void unless DGFT declared them so. Accordingly, the show cause notice and the order declaring the DEPB scrips void and fastening duty liability were held to be without authority of law.

List of Cases Cited

• Apar Industries Ltd. v. Commissioner — Customs Appeal No. 594/2004, dated 13-5-2025 by CESTAT, New Delhi — Relied on [Para 19]