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2023 (7) TMI 489 - AT - CustomsDenial of Exemption from payment of Basic Customs Duty - import of Titanium Dioxide (Rutile) - denial on the strength of Transferable DFIA License issued against Export of Glass Bottles by M/s. Piramal Glass Limited - eligibility to claim benefit of N/N. 98 of 2009 - HELD THAT - The appellant has imported Titanium Dioxide (Rutile) which is not in dispute. The DFIA produced by the appellant are endorsed with transferability by the RA which establishes that the Export obligation has been discharged by the Exporter M/s. Piramal Glass Limited and the license has been made freely transferable by licensing authorities - As per the list of import goods permitted for duty free import inter alia shows the input item Rutile is mentioned under the description of Glass Formers. It is not in dispute that Rutile refers to Titanium Dioxide as we observe from the technical references produced by the appellant. The ITC (HS) Code 32061900 mentioned in the DFIA against Rutile is fully covered by the import goods of Titanium Dioxide. In the present case DFIA is issued post discharge of export obligation and endorsed with transferability. The Hon ble Bombay High Court in the case of SHAH NANJI NAGSI EXPORTS PVT. LTD. VERSUS UNION OF INDIA MINISTRY OF COMMERCE INDUSTRY DIRECTORATE GENERAL OF FOREIGN TRADE AND JOINT DIRECTOR GENERAL OF FOREIGN TRADE 2019 (4) TMI 146 - BOMBAY HIGH COURT has already held that under post transferability of DFIA there is no actual user condition exists in the DFIA License which is further concurred by the Hon ble Allahabad High Court in the case of SACHIN PANDEY VERSUS U.O.I. THRU. SECY. MINISTRY OF COMMERCE INDUSTRIES AND ORS. 2019 (10) TMI 1057 - ALLAHABAD HIGH COURT . Keeping in with the judicial decorum and discipline the ruling rendered by the higher judicial forums are bound to be followed. There is no requirement of actual use of inputs and quantities for claiming DFIA benefit as held by this Tribunal in identical cases. It is agreed upon that as long as the imported goods are covered by the description value and quantity of DFIA as per SION DFIA benefits cannot be denied. The actual use of Titanium Dioxide Rutile in the resultant product is not necessary for claiming DFIA benefit so long as Rutile is mentioned in the SION and in the DFIA. The appellant is entitled to claim DFIA benefit under Custom Notification No. 98 of 2009 for their import of Titanium Dioxide (Rutile) as a glass former against the Export of Glass bottles under DFIA Scheme. The lower authorities are directed to issue a certificate as per Para 2.13.1 of Hand Book for the purpose of revalidation if such a request is filed by the appellant - Appeal allowed.
Issues involved:
The denial of Exemption from payment of Basic Customs Duty under Custom Notification No. 98/2009-Cus dated 11.09.2009 against the import of Titanium Dioxide (Rutile) under Transferable DFIA License. Summary: Issue 1: Eligibility for exemption under Notification No. 98 of 2009 The appellant imported Titanium Dioxide Rutile R-2195 and claimed exemption under Custom Notification No. 98 of 2009. The appellant argued that the DFIA allows import of Rutile against the description of 'Formers' classified under CTH No. 32061900. The appellant contended that actual use of Titanium Dioxide in the resultant product is not necessary for claiming benefits under Notification No. 98 of 2009. Various legal precedents were cited in favor of the appellant to support their claim. Issue 2: Compliance with FTP provisions The appellant argued that the DFIA issued is covered for the policy period (2009-14) and that there is no condition in the notification or FTP to suggest that only inputs with actual quantities used in the resultant product are entitled to claim DFIA benefit. The appellant emphasized that Titanium Dioxide Rutile is a specific entry in the DFIA and therefore Para 4.12 of FTP has no application. Legal judgments were cited to support the argument that actual user condition is not required for claiming DFIA benefits. Issue 3: Interpretation of DFIA provisions The Revenue contended that the appellant failed to comply with the obligation to claim benefits based on information about input utilization by the original license holder. The Revenue argued that Glass formers are generic entries and that the importer is permitted to import only proportionate quantity of former rutile actually used in production. The appellant's obligation ceased to exist despite the DFIA being transferable. Judgment: The Tribunal found that the appellant imported Titanium Dioxide (Rutile) covered by the DFIA and that the Export obligation had been discharged. The Tribunal observed that Rutile refers to Titanium Dioxide and that the DFIA is governed by the provisions of FTP (2009-14). Legal precedents were cited to support the finding that actual use of inputs and quantities is not necessary for claiming DFIA benefits. The Tribunal set aside the impugned order, allowing the appellant to claim DFIA benefit under Custom Notification No. 98 of 2009 for their import of Titanium Dioxide (Rutile) as a glass former against the Export of Glass bottles under DFIA Scheme. The lower authorities were directed to issue a certificate for revalidation if requested by the appellant.
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