2013 (10) TMI 1152 - AT - Customs

Date of applicability of new policy - whether foreign trade policy; as was available on the relevant date when the DIFA were transferred to the appellant and endorsed by the authorities i.e. on 7.11.06 are required to be taken or subsequent amendment in the policy, which was applicable on the date of import is required to be adopted - Held that - while endorsing the transferability, authorization is required to bear the note as to liability of such additional customs duty/ customs duty which would be reimbursed to exporter as draw back. One thing becomes clear from said para that such note is required to be put on authorization, by the authorities, at the time of endorsing transferability. Admittedly, such a note can be put to authorization only in respect of those documents which are endorsed after coming into existence of the new provisions. Such note cannot be put on the documents issued prior to April, 2007. In the present case, the documents were issued prior to April, 2007. This leads us to conclude that new policy is applicable in those documents which are endorsed for transferability after April, 2007. Circulars issued by the Board clarifying the disputed issues are binding on the departmental authorities deciding the same very issue and they cannot be heard arguing the same. Inasmuch as the said circular in clear terms clarifies that the amendments made in the Policy would not be applicable to the authorization issued prior to 1.4.07, we are of the view that confirmation of demand against the appellants is not justified - Decided in favour of assessee.

Summary

Issues involved:
1. Interpretation of para 4.4.6 of the foreign trade policy regarding the liability of additional customs duty on imports made against Duty Free Import Authorization (DFIA).
2. Determination of whether the policy in effect at the time of transferability of DFIA or the policy at the time of import should be applied.
3. Consideration of subsequent policy changes and circulars affecting the liability of additional customs duty/excise duty on imports made against DFIA.

Detailed Analysis:
1. The appellant, engaged in trading iron and steel items, imported goods against DFIA procured from a supplier. Subsequent investigations revealed changes in the foreign trade policy, leading to a demand for additional customs duty on the imports. The Commissioner confirmed the duty demand but did not impose a penalty due to the department's change in views.
2. The central issue was whether the policy at the time of DFIA transfer or the policy at the time of import should govern the liability of additional customs duty. The Tribunal analyzed the relevant policy amendments, specifically para 4.4.6, which outlined the transferability of DFIA and the liability for additional customs duty upon transfer.
3. The Tribunal noted that the policy changes in April 2007 and 2008 clarified the treatment of authorizations issued before April 1, 2007, exempting them from additional customs duty even after transferability. A subsequent circular further supported this interpretation, emphasizing that amendments post-issuance would not apply retroactively. The Tribunal also cited a precedent highlighting the importance of applying the policy in effect at the time of authorization for imports/exports.
4. Relying on the clear policy provisions, subsequent clarifications, and established legal principles, the Tribunal set aside the Commissioner's order, ruling in favor of the appellant and granting consequential relief. The judgment emphasized the binding nature of circulars issued by the Board on disputed issues and upheld the relevance of applying the policy effective at the time of authorization issuance.

This detailed analysis highlights the key legal considerations, policy interpretations, and precedents that informed the Tribunal's decision in this case.