New Delhi, Sept. 21 -- The Supreme Court has reiterated that Central Board of Direct Taxes (CBDT) circulars cannot bind courts and held that premium earned from the sale of export quota does not qualify as export income eligible for deduction under Section 80HHC of the Income Tax Act.

The Court dismissed a batch of appeals by assessees engaged in manufacturing and exporting readymade garments, who had relied on a 1998 CBDT circular to claim deductions on income earned from the sale of export quota for assessment years 2000-01 and 2001-02.

It held that the premium could not be treated as income generated from exports as the transaction did not involve the earning of foreign exchange. It therefore could not be categorised as income from e...