2018 (5) TMI 928 - AT - Customs

Benefit of DFIA Licenses (Duty Free Import Authorisation) - import of certain chemicals described as Melamine - It is the claim of the appellant that the item Syntan refers to synthetic tanning agent and will cover the goods imported since the said goods are capable of being used as synthetic tanning agent - whether the goods imported and described as Melamine will be covered by the description SYNTAN appearing in the DFIA licences? Held that - The goods imported have been declared as Melamine but the DFIA licences produced for clearance of such goods cover the items Syntan - From the opinion of the CLRI, it is evident that Melamine cannot be used as such, in leather processing as Syntan leading us to the inescapable conclusion that the benefit allowable under DFIA licence to Syntan cannot be extended to Melamine, which is imported by the appellant. The appellant has relied on the ratio of the Tribunal s decision in the case of Dimple Overseas 2002 (3) TMI 636 - CEGAT, MUMBAI - the benefit of the said Tribunal s decision cannot be extended to the imports in the present case, since that decision was delivered in the context of Value Based Advance Licence issued under the then N/N. 203/92, whereas in the present case, we are dealing with the DFIA licence and the terms of issue of both licenses are entirely different. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Interpretation of DFIA licences covering specific chemicals.
2. Determination of whether the goods imported can be given the benefit of DFIA licences.
3. Consideration of expert opinion from CLRI regarding the chemical composition of imported goods.
4. Application of Tribunal's previous decision on the classification of "Melamine" as a tanning agent.

Analysis:
The appeal challenged an Order-in-Appeal regarding the denial of DFIA licence benefits for the import of "Melamine" due to discrepancies with the items covered by the licence. The appellant argued that "Melamine" could be considered as "Syntan" based on its use in the Leather Processing Industry. The Customs Department, supported by the opinion of CLRI, maintained that "Melamine" and "Syntan" were chemically different and covered under distinct HS Codes. The Tribunal noted the issue of whether the imported goods could benefit from DFIA licences, emphasizing the discrepancy between the goods imported and those covered by the licences. CLRI's opinion clarified that "Melamine" could not function as "Syntan" in leather processing, indicating the distinct nature of the two chemicals. The Tribunal rejected the appellant's reliance on a previous decision, emphasizing the differences in licensing terms and chemical classifications. Ultimately, the Tribunal upheld the impugned order, denying the benefit of DFIA licences for "Melamine" imports based on the expert opinion and classification differences.