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TMI Blog2019 (10) TMI 1057X X X X Extracts X X X X X X X X Extracts X X X X ..... ision Bench of the Hon'ble Punjab and Haryana High Court has already considered the DFIA Scheme and has observed that The Commissioner of Customs, ICD Ludhiana, is directed to allow exemption of basic customs duty in respect of the import of Soda Ash by the petitioner by debiting the DFIA licence under Bill of Entry no. 7080616 dated 16.10.2014. There are no reason to take a different view to take away the benefits otherwise available under the DFIA Scheme under the Foreign Trade Policy, whether of 2009-14 or 2015-20, merely to satisfy the petitioner. The aforesaid judgments of the Punjab and Haryana High Court still hold the field, so far as permitting duty-free imports under DFIA are concerned. The contention of the petitioner that duty free import of any goods under DFIA cannot be permitted unless each of the above-mentioned three essential conditions are satisfied, clearly runes counter to the above judgments which are binding on the authorities - Neither the officers of the respondents can be proceeded against for following such binding precedents nor can the exporters or importers be subjected to any onerous conditions, declaration, bond or undertaking contrary to these b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f twelve months from the date of generation of particular file number. On completion of export and realization of proceeds, one has to apply for issuance of DFIA with the concerned authority. On each transaction, separate DFIA is issued as per the Standard Input Output Norms (SION) . On issuance of authorization the trader will get exemption from paying basic custom duty on the goods allowed to be imported under scheme. 6. In order to give effect to the DFIA Scheme contained in Foreign Trade Policy 2015-20, the Government of India, Ministry of Finance, issued Notification dated 1st April, 2015 in exercise of powers conferred upon it under Sub-section (1) of Section 25 of Customs Act, 1962. The said notification exempts material imported into India against a valid DFIA Scheme in terms of paragraph 4.25 and 4.27 of the Foreign Trade Policy, 2015-20, subject to the conditions contained therein, which are reproduced below: DUTY FREE IMPORT AUTHORIZATION SCHEME (DFIA) 4.25 DFIA Scheme (a) Duty Free Import Authorization is issued to allow duty free import of inputs. In addition, import of oil and catalyst which is consumed / utilized in the process of production of export product, may al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s who are responsible for permitting duty free import of goods without ensuring the aforesaid requirements, by issuing such DFIAs or allowing imports thereunder; and c) directing the respondents to initiate criminal prosecution under the provision of Section 135 and recovery proceedings under Section 28 of the Customs Act, 1962 against those exporters/importers who are availing undue duty benefits under DFIA Scheme without satisfying the aforesaid requirements. 8. According to the petitioner, duty free import of any goods under Transferable DFIA cannot be permitted unless each of the following 'three essential conditions' are satisfied- a) the technical specification/quality and characteristics of the imported goods are specifically declared int he shipping bills by the exporter, b) the imported goods are actually used as inputs in manufacture of export product, and c) the imported goods are not merely alternative inputs or goods capable of using in the export product. 9. For this purpose, apart from the provisions of Chapter 4 of FTP 2009-14 and 2015-20 concerning DFIA Scheme, the petitioner has also placed on record- i) Notification Nos. 31 and 90 dated 01.08.2013 and 21. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner. Directions are being sought by the petitioner against the respondents without any justifiable grounds. The DFIA Scheme as also the earlier Transferable DEEC Schemes are based on the Standard Input Output Norms. In any event, there is no need to go into the issue of applicability or otherwise of the various judgments referred by the petitioner. 14. In Pushpanjali Floriculture Pvt. Ltd. Vs. Union of India, reported in 2016 (340) ELT 32, a Division Bench of the Hon'ble Punjab and Haryana High Court has already considered the DFIA Scheme and has observed as under:- 25. The DFIAs, in the present case were issued on post-export basis. In other words, the exports in fulfilment of the Export Obligation thereunder were effected by the Exporter / Licence holder prior to issuance of the said DFIAs. It would be impossible, therefore, for any additional indication/endorsement to be entered in the Shipping Bills whereunder the exports had already been effected. Clearly, therefore, requiring the holder or the transferee of the DFIA, which was issued on post-export bases, to comply with para-4.1.15 as inserted by the above-mentioned impugned Notification dated 01/08/2013, would amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used in the export product, the exporter had the flexibility to import the alternative inputs / products mentioned in the SION. This guideline, therefore, would govern the availability of import benefits under the subject DFIA during their lifetime. 40. Any other interpretation would also render the statutory SION norms a dead letter. DFIA is issued in terms of the SION norms. Duty free import benefits on all items referred to in the said licences as per the SION as on date of its issuance have, therefore, to be guaranteed to the licence holder as well as to all bonafide transferees thereof................ 15. In Shah nanji Nagsi Exports Pvt. Ltd. Vs. Union of India reported in 2019 (367) E.L.T. 335 (Bom), a Division Bench of the Bombay High Court has also considered the DFIA Scheme and has observed as under: 25. It is not denied that popcorn maize has also similar starch contents as other varieties of maize, indicating that popcorn maize can be used to manufacture maize starch powder. The scheme never conveys that there is actual user condition attached to the import against the export obligation. It amounts to adding some conditions in the FTP when they never exist. Moreover, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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