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Issues:
1. Entitlement to benefit of Notification 204/92 for imported sheets of second or defective quality. 2. Requirement of establishing nexus between imported goods and exported product for license transferee. 3. Interpretation of conditions of Notification 204/92 regarding transferability of license and fulfillment of export obligation. Analysis: 1. The appeal involved a dispute over the entitlement to the benefit of Notification 204/92 for imported sheets of second or defective quality. The Department contended that the imported sheets were not entitled to the benefit as the exported product was believed to be made of prime quality sheets, and there was no indication of the imported sheets' quality in the shipping bill. The Asst. Commissioner denied the benefit based on this discrepancy. 2. The importer appealed, and the Commissioner (Appeals) held that the Department failed to prove the exported product was defective. Additionally, the Commissioner required the appellant, as a transferee of the license, to establish a nexus between the imported goods and the exported product. The appeal was allowed based on these findings, leading to the Department challenging this decision. 3. The crux of the appeal revolved around the interpretation of Notification 204/92 conditions regarding the transferability of the license and the fulfillment of export obligations. The Department argued that mere transfer of the license did not automatically extend the benefit of the notification to the imported goods without demonstrating a clear nexus between the imported and exported goods. The Tribunal emphasized that the transfer of the license indicated satisfaction of export obligations by the licensing authority, and conditions 7 and 8 of the notification outlined the requirements for benefiting from the exemption. 4. The Tribunal highlighted that the purpose of the notification was to exempt imported goods to meet export obligations or replenish goods used for exported products. It clarified that once export obligations were fulfilled, the license could be transferred, as stipulated in the policy. The Tribunal explained that the conditions of the notification did not explicitly require the licensee or transferee to prove the specific use of imported goods in the exported product, especially if the goods were covered by the notification. 5. The Tribunal further elucidated that the conditions of the notification, particularly condition 8, clarified that the benefit could be extended to a transferee after fulfilling export obligations. The Tribunal emphasized that the imported goods could be used for purposes other than export obligations if those obligations had already been met. The decision was supported by precedent, including the case of Nitco Marble and Granite Pvt. Ltd. & Anr. v. C.C. Nhavasheva & Anr., which established a similar interpretation. 6. Ultimately, the Tribunal found no reason to interfere with the Commissioner (Appeals) decision and dismissed the appeal, affirming that the transfer of the license and fulfillment of export obligations were sufficient for the transferee to avail the benefit of Notification 204/92 without the need to establish a direct nexus between the imported and exported goods.
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