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2010 (7) TMI 600 - AT - CustomsProvisional assessment - Notification No. 48/2000-Cus., dated 25-4-2000 - Demand - whether the benefit of Notification 48/2000-Cus. (Serial No. 10) is admissible to the processed cotton fabrics imported by the respondent in the month of March 2001 - it may be pertinent to note that the DFRC licensee had obtained it from the DGFT after exporting processed cotton fabric made-ups other than grey , a fact not in dispute - it should have occurred to the officer of Customs, who dealt with the shipping bills, that a sample of the export goods should be preserved and got tested for its chemical composition and other specifications - The format of DFRC presently in vogue has also been shown to us, from which it appears that the licensing authority has started specifying the composition of textile materials in DFRCs, both for export and for import and, therefore, today, there is no scope for issues of this kind to arise - Decided in the favour of assessee
Issues Involved:
1. Whether the benefit of Notification No. 48/2000-Cus. is admissible to the processed cotton fabrics imported by the respondent. 2. Compliance with condition No. 2(c) of Notification No. 48/2000-Cus. 3. Binding nature of DGFT clarifications under para 4.13 of the EXIM Policy. 4. Interpretation of "processed cotton fabrics" under the DFRC scheme. Detailed Analysis: 1. Admissibility of Notification No. 48/2000-Cus. Benefit: The appeal filed by the Revenue challenges the appellate Commissioner's order granting the benefit of Notification No. 48/2000-Cus. to the respondent for the import of processed cotton fabrics under DFRC No. 0410009541. The original authority denied this benefit, which was later allowed by the Commissioner (Appeals). The Tribunal upheld the appellate authority's decision, granting the benefit of the Notification to the respondent. 2. Compliance with Condition No. 2(c) of Notification No. 48/2000-Cus.: The Revenue argued that the respondent did not satisfy condition No. 2(c) of the Notification, which required the DFRC to specify the quality, technical characteristics, specifications, and quantity of the materials used in the resultant product allowed to be imported duty-free. The DFRC in question described the import item merely as "processed cotton fabric," which the Revenue contended was insufficient. The Tribunal found that the DFRC's description was adequate and that the Customs authorities had not maintained proper records to verify the technical characteristics at the time of export. 3. Binding Nature of DGFT Clarifications: The Tribunal examined contradictory clarifications issued by the DGFT regarding the import of processed cotton fabrics containing 55% cotton and 45% polyester. It was noted that the DGFT's authority under para 4.13 of the EXIM Policy to clarify doubts or questions was not properly exercised, as decisions were based on recommendations from the Advance Licence Committee (ALC) without independent application of mind. The Tribunal held that such clarifications were not binding unless independently decided by the DGFT. 4. Interpretation of "Processed Cotton Fabrics": The Tribunal considered the interpretation of "processed cotton fabrics" in the DFRC. It referred to the Standard Input Output Norms (SION) and tariff entries to conclude that the term "processed cotton fabrics" could include fabrics predominantly composed of cotton, even if blended with other materials like polyester. The Tribunal emphasized that the Customs authorities should have maintained records through sampling and testing of export goods to verify the correlation with import goods. The Tribunal found no justification for the Revenue to deny the benefit based on the description provided in the DFRC and bill of entry. Conclusion: The Tribunal dismissed the Revenue's appeal, sustaining the lower appellate authority's decision to grant the benefit of Notification No. 48/2000-Cus. to the respondent. The Tribunal underscored the importance of maintaining proper records and the need for a judicious application of the DGFT's authority under para 4.13 of the EXIM Policy. The decision highlighted that the Customs authorities cannot retrospectively impose conditions not specified at the time of export.
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