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TMI Blog2014 (8) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... rely covered by the advance license issued by the licensing authority. The appellant has thus established a nexus as envisaged by the advance licensing scheme. The License Amendment Sheet dated 23.11.2011 (at page 24) at Sr. no. 4 mentions the modified Import Item as ‘Essential Oils’ without any further restriction as to its description or classification. ‘Patchouli Oil’ being admittedly covered under the scope of the permissible input ‘Essential Oil’ mentioned in the transferrable DFIA, the appellant is entitled for duty exemption under Notification No. 98/2009-Cus.dated 11.9.2009, without insisting on specifications, being a transferee of DFIA - Decided in favour of assessee. - Appeal No.C/11278/2014-DB - Order No. A/11012/2014 - Dated:- 22-5-2014 - MR.M.V. RAVINDRAN AND MR. H.K. THAKUR, JJ. For the Appellant : Shri Hari Shankar, Adv. For the Respondent : Shri Manoj Kutty, Superintendent (AR) JUDGEMENT Per: M.V. Ravindran; Appeal No. C/ 11278 /2014 1. In this appeal the core issue relates to eligibility for duty exemption in connection with import of Patchouli Oil imported by the appellant under a transferable duty free import authorization da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for import as per the provisions of Para 4.32.2 of Hand Book. Patchouli oil is not appearing specifically under Para 4.32.2 Hand Book of Procedures (Vol.I) of the Foreign Trade Policy, (sensitive list) as Resultant Product. (iii) The First Proviso to the condition (i) of the notification no. 98/2009-Cus clearly states that- Provided that in respect of resultant product specified in paragraph 4.32.3 of the Hand Book of Procedures (Vol.I) of the Foreign Trade Policy, the materials permitted in the said authorisation or a duty free import authorisation for intermediate supply, as the case may be, shall be of the same quality, technical characteristics and specifications as the materials used in the said resultant product: Therefore the mandate to correlate the specifications is applicable only when the resultant product is specified in the sensitive list. (iv) The resultant product in this case is confectionary which does not figure in the sensitive list. Therefore the fact that sensitive list mentions Essential oils cannot be a ground to demand establishing correlation between the imported inputs and those actually used in the export product. (v) O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid DFIA is not acceptable since Para 2 of the DGFTs Public Notice 35 dated 31.10.2013 states that in case where exports are fully or partly completed before 01.08.2013, the corresponding import of inputs which were actually used in the export product shall be allowed subject to the undertaking from the authorization holder. (v) The Patchouli Oil is capable of being used in Manufacture of confectionary items. However, actual use is required to be established as stipulated in the Public Notice 35. 2.7 Aggrieved by the same the appellants are before us in the instant appeal. 3. Both sides were heard at length. We have carefully perused the records before us. Our attention was drawn by both sides towards various Notifications, Circulars, Public Notices and precedents which we have taken into consideration. The appeal has been taken for hearing out of turn for the reason that the case relates to a live consignment and the issue is of recurring nature. 3.1 Whether Patchauli Oil is capable of being used in food industry in Assorted Confectionery: 3.2 The appellant has invited attention inter alia to the following technical literature placed on record- I. Fen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner (Appeals) has not been disputed before us either orally or by filing cross-objection or otherwise. We are even otherwise convinced on the basis of the aforesaid material on record that Patchouli Oil is capable of being used as an input in Assorted Confectionery. 5. A perusal of the DFIA shows that while issuance thereof no endorsement was made on the same by the office of DGFT restricting the scope of Item Essential Oil , so as to exclude from its ambit and scope Patchauli Oil which, admittedly, is also an Essential Oil . Thus, neither the SION norms nor the DFIA imposes any specific restriction on the type of Essential Oil . It is seen and is undisputed that Patchouli Oil is capable of being used as an input in the manufacture of Confectionery. Since it is established that the imported goods are covered under the scope and ambit of permissible item Essential Oil , and also that it was capable of being used in the manufacture of Confectionery , it is now to be seen whether exemption could still be denied only on the ground as taken in the impugned Order-in-appeal, such as nexus and Public Notice no. 35 dated 30.10.2013. 6. We have considered the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garding the Public Notice no. 35 dated 30.10.2013, it is seen that it seeks to enlarge the scope of Notification no.31 (RE-2013)/2009-14 dated 01.08.2013 amending the Foreign Trade Policy with effect from 01.08.2013, by insertion of para 4.1.15 in FTP, and amending para 4.2.3 by adding phrase 4.1.14 and 4.1.15 in place of and 4.1.14 . It is seen that in Union of India vs Asian Food Industries, 2006 (204) E.L.T. 8 (S.C.), the Hon ble Supreme Court was pleased to hold as follows- 48. Prohibition promulgated by a statutory order in terms of Section 5 read with the relevant provisions of the policy decision in the light of sub-section (2) of Section 3 of the 1992 Act can only have a prospective effect. By reason of a policy, a vested or accrued right cannot be taken away. Such a right, therefore, cannot a fortiori be taken away by an amendment thereof. Further, in Soubhik Exports Ltd, 2007 (214) E.L.T. 334 (Cal.) the Hon ble High Court also on the same lines held that- 19. Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 does not authorize the Central Government to amend the Export and Import Policy with retrospective effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o applicability for the same reason. 11. In Aditya Birla Nuvo Ltd vs CC, 2010 (249) E.L.T. 273 (Tri. - Bang.), this Tribunal, while relying on various precedents of the Hon ble Supreme Court and Hon ble High Court held as under- 8.6. We now take up next issue framed by us i.e., issue (g) for discussions. (g) Whether the appellant has failed to establish nexus as envisaged in advance licensing scheme? The instant case relates to imports under license issued for actual user condition by the license to the license holder. It is no longer res integra and is a settled law that nexus between the imported materials and export product, is not required to be proved fresh by the transferee/licensee once imported material is otherwise covered by the advance license and the benefit of exemption notification would be available. In Commissioner v. Goodluck Industries - 2000 (120) E.L.T. A66 (Supreme Court), the Hon ble Supreme Court upheld the Tribunals judgment in Goodluck Industries v. Commissioner - 1999 (108) E.L.T. 818 (Tribunal) laying down the said ratio, and on merits dismissed the same appeal filed by the Commissioner of Customs, Calcutta against the same. In Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A, and broad nexus stands established, it is not necessary for the Transferee to further establish that the material imported was actually used in the export product. 12. Moreover, we have also noted provisions of para 4.32.2 of the HBP, which is as follows- However in respect of following items, exporter shall be required to give declaration with regard to technical characteristics, quality and specification in shipping bill. RA while issuing DFIA shall mention technical characteristics, quality and specification in respect of such inputs: Alloy steel including Stainless Steel, Copper Alloy, Synthetic Rubber, Bearings, Solvent, Perfumes/ Essential Oil/ Aromatic Chemicals, Surfactants, Relevant Fabrics, Marble, Articles made of polypropylene, Articles made of Paper and Paper Board, Insecticides, Lead Ingots, Zinc Ingots, Citric Acid, Relevant Glass fibre reinforcement (Glass fibre, Chopped / Stranded Mat, Roving Woven Surfacing Mat), Relevant Synthetic Resin (unsaturated polyester resin, Epoxy Resin, Vinyl Ester Resin, Hydroxy Ethyl Cellulose), Lining Material [Emphasis supplied] 13. It is seen that in the said Para 4.32.2, the obligation of declaration is c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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