2015 (11) TMI 820 - AT - Customs

Denial of benefit of DFIA notification - Provisional clearance of goods - Invocation of bank guarantee - Held that - License being freely transferable no actual user condition can be imposed on the transferee who has purchased the License from the open market. The importer therefore is not required to establish the actual user condition in terms of DGFT Policy Circular 50/2008 and CBEC Circular No. 46/2007. We note that in similar cases of same goods i.e. Saffron the Orders of Commissioner Appeals allowing such import at Mumbai and Nava Sheva were accepted by the Department and the imports under relevant B/Es such B/E No 5551749 field at ACC Mumbai bear the remarks Assessed as per Commissioner (Appeal) order accepted by Committee of Commissioner of Customs vide F.No. S/3-Misc-18/2010 DFI ACC . No appeal having been filed in view of acceptance of this Order the acceptance by the Committee of Commissioners is binding on officers and any contrary decision amounts to defiance of the decision taken by Committee of Commissioners. - department cannot now impose strict conditions for provisional release when there are Orders of the Tribunal and the Commissioner (Appeals) in favour of the appellant. Therefore the Order imposing 100% Bank Guarantee is not sustainable. - adjudicating authority does not have the authority to impose such conditions for provisional release. This exercise of the power is very arbitrary and suffers from lack of reasonableness in view of the judicial pronouncements in appellant s favour. - Decided in favour of assessee.

Summary

Issues:
- Imposition of 100% PD Bond and Bank Guarantee for clearance of import consignment provisionally under Notification No. 98/2009-Cus.
- Validity of the remand order dated 20.1.2014 by CESTAT.
- Interpretation of DFIA License conditions and SION norms for import of saffron as "food flavour".
- Compliance with actual user conditions and FTP provisions.
- Applicability of duty exemption criteria based on SION norms and DFIA description.
- Authority of adjudicating authority to impose conditions for provisional release.
- Binding nature of decisions by higher authorities and acceptance by Committee of Commissioners on similar cases.

Analysis:
1. The appeal concerned the imposition of a 100% PD Bond and Bank Guarantee for the provisional clearance of an import consignment of saffron under Notification No. 98/2009-Cus, following a series of orders by the customs authorities.

2. The appellant argued that the remand order dated 20.1.2014 by CESTAT precluded the appeal, and the fresh DFIA License lacked actual user conditions, thus challenging the need for provisional assessment based on bank guarantees.

3. The appellant contended that previous orders by Commissioner (Appeals) had allowed similar imports under the DFIA License against export of biscuits, which had been accepted by the Committee of Commissioners, supporting their case.

4. The Tribunal referenced a previous case and held that the DFIA description of "food flavour" entitled the appellant to import saffron regardless of the ITC (HS) Code, emphasizing the absence of actual user conditions post-transfer of the license.

5. It was established that the adjudicating authority lacked the power to unreasonably impose strict conditions for provisional release, especially in light of favorable decisions by higher authorities and acceptance by the Committee of Commissioners in similar cases.

6. Ultimately, the Tribunal set aside the order for 100% Bond and Bank Guarantee, directing Customs to release the consignment within three days, emphasizing the binding nature of previous decisions and the need for compliance with DFIA requirements.

This detailed analysis covers the key issues and the Tribunal's comprehensive reasoning in the legal judgment.