2019 (6) TMI 225 - AT - Customs

Benefit of duty free import - inshell walnut - against the DFIA issued for export of biscuit - Denial of benefit on the ground that CTH mentioned in the Annexure A to DFIA are different from the CTH mentioned in the BE - HELD THAT - The issue raised in the above appeal is also covered by the order by the Hon ble Bombay High Court in the case of USMS SAFFRON CO. INC. VERSUS COMMISSIONER OF CUSTOMS (ACC EXPORT) MUMBAI 2015 (11) TMI 820 - CESTAT MUMBAI . The appellate tribunal held that ITC (HS) mentioned in the DFIA is not a criterion to get the benefit under FTP and Custom provisions as long as the items imported falls under the description of the goods mentioned in the DFIA. In that case, the appellate tribunal held that the imported saffron is covered by the description food flavour mentioned in the DFIA irrespective of ITC (HS) mentioned in the DFIA. We also find that Hon ble Bombay High Court in the case of USMS Saffron upheld the order of the appellate tribunal holding saffron can be imported as food flavour without payment of duty against DFIA issued for export of biscuits. We find considerable force in the submission of the appellant that the term generic input and alternative input are not defined under FTP (2009-14) and 2015-2020 and the relevant Public Notice No. 93 dated 01.02.2012 for export of biscuits under DFIA covered by SION E-5 and SION E-5 mentions that the description of import item in very specific details and rationalised quantities. Once the imported goods satisfy the description given in the SION and reproduced in the DFIA, they are clearly entitled to claim benefit without payment of duty on the strength of the valid DFIA irrespective of ITC (HS) No. mentioned in the DFIA. Interestingly, SION does not refer to ITC (HS) Codes and only the description and quantity of the goods allowed to be imported are mentioned - also no actual user condition is specifically mentioned in the SION E-5. In a post export entitlement scheme like DFIA, in our view once the endorsement of transferability is made in the DFIA, the imported goods only requires to be covered by the description, quantity mentioned in the DFIA within the overall CIF Value as specified therein. Thus, the appellant is entitled to clear the imported Inshell Walnut against the DFIA License obtained against export of Biscuits and produced before the Customs authority. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Interpretation of Foreign Trade Policy (2009-14) and Customs Notification No. 98/2009-Cus
- Eligibility for duty free benefits under Transferable Duty Free Import Authorisation (DFIA)
- Classification of imported goods under DFIA
- Consideration of technical evidence for classification
- Application of High Court judgments in similar cases

Interpretation of Foreign Trade Policy (2009-14) and Customs Notification No. 98/2009-Cus:
The case involved the interpretation of the Foreign Trade Policy (2009-14) and Customs Notification No. 98/2009-Cus regarding the exemption of goods from Customs duty. The appellant claimed exemption based on these provisions in relation to the import of Inshell Walnut under a transferable DFIA. The Tribunal analyzed the relevant provisions and their applicability to the imported goods.

Eligibility for duty free benefits under Transferable Duty Free Import Authorisation (DFIA):
The key issue was whether the appellant was eligible for duty free benefits under the Transferable Duty Free Import Authorisation issued against the export of Biscuits. The Tribunal examined the specifics of the DFIA scheme, including the conditions for eligibility and the nature of the goods covered under the authorization.

Classification of imported goods under DFIA:
Another crucial aspect was the classification of the imported goods, particularly the Inshell Walnut, under the DFIA. The Tribunal reviewed the description of goods in the DFIA and assessed whether the imported items fell within the specified categories mentioned in the authorization.

Consideration of technical evidence for classification:
Technical evidence, including certificates from technical institutions and reference materials, played a significant role in determining the classification of Inshell Walnut as a relevant food flavour/flavouring agent/flavour improver or dietary fibre. The Tribunal evaluated the technical opinions and material presented by the appellant to support their classification claim.

Application of High Court judgments in similar cases:
The Tribunal referred to judgments from the Hon’ble MP High Court and the Hon’ble Bombay High Court in similar cases to support its decision. The Tribunal considered the precedent set by these judgments in interpreting the relevant provisions of the law and applying them to the present case.

In conclusion, the Tribunal allowed the appeal, granting the appellant the benefit of duty free import of Inshell Walnut against the DFIA license obtained for the export of Biscuits. The decision was based on a thorough analysis of the legal provisions, technical evidence, and precedents from relevant High Court judgments. The Tribunal also directed the authorities to consider any application for revalidation of the DFIA, in line with the decision in a similar case by the Hyderabad bench of the Tribunal.