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2019 (4) TMI 146 - HC - Customs


Issues Involved:
1. Entitlement to import popcorn maize under DFIA scheme.
2. Violation of Clause 4.12(i) of the FTP 2015-20.
3. Interpretation of the term "maize" in SION E75.
4. Actual user condition in the DFIA scheme.
5. Retrospective application of policy circulars.

Detailed Analysis:

1. Entitlement to Import Popcorn Maize under DFIA Scheme:
The petitioner, a Private Limited Company engaged in the export business, sought to import popcorn maize under the Duty Free Import Authorisation Scheme (DFIA) for exporting maize starch powder as per SION entry E75. The court examined whether the petitioner could import popcorn maize under this scheme. The court concluded that the petitioner is entitled to import popcorn maize under DFIA scheme vide SION entry E75, as there is no restriction on the variety of maize specified in the entry. The court emphasized that the scheme permits the import of maize without specifying the type, thus allowing the import of popcorn maize.

2. Violation of Clause 4.12(i) of the FTP 2015-20:
The respondents argued that the petitioner violated Clause 4.12(i) of the FTP 2015-20 by not endorsing the specific input (popcorn maize) in the relevant shipping bills and bills of entry. Clause 4.12(i) mandates that when SION permits the use of generic inputs, the specific input must be endorsed in the shipping bill. The court, however, found that the term "maize" is specific and not generic, thus Clause 4.12(i) does not apply. The court held that maize is a specific class of cereal, and the petitioner did not violate Clause 4.12(i).

3. Interpretation of the Term "Maize" in SION E75:
The court analyzed whether the term "maize" in SION E75 includes all varieties of maize, including popcorn. The petitioner argued that "maize" should be interpreted broadly to include all varieties as there is no restriction in the entry. The court agreed with the petitioner, citing precedents where terms in policies were interpreted broadly in the absence of specific restrictions. The court held that the term "maize" in SION E75 includes popcorn maize, allowing its import under the DFIA scheme.

4. Actual User Condition in the DFIA Scheme:
The respondents contended that the petitioner misused the DFIA scheme by importing popcorn maize, which is costlier and not commercially viable for manufacturing maize starch powder. They argued that the scheme has an actual user condition, requiring the imported item to be used for manufacturing the export product. The court found no actual user condition in the DFIA scheme. The court emphasized that the scheme is post-export and transferable, meaning the imported item need not be used by the importer. The court ruled that there is no actual user condition in the DFIA scheme, thus the petitioner did not misuse the scheme.

5. Retrospective Application of Policy Circulars:
The respondents relied on a circular dated 14.11.2017 to argue for an actual user condition. The petitioner countered that the circular applies to the Advance Authorization Scheme and cannot have retrospective effect. The court agreed with the petitioner, citing a precedent that policy circulars do not apply retrospectively. The court held that the circular cannot be used to deny the petitioner's entitlement to import popcorn maize under the DFIA scheme.

Conclusion:
The court concluded that the petitioner is entitled to import popcorn maize under the DFIA scheme vide SION entry E75. The court directed the respondents to issue the necessary authorizations, subject to the fulfillment of the rest of the policy conditions. The writ petition was disposed of accordingly.

 

 

 

 

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