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TMI Blog2020 (12) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... ly decided that the appellant is not entitled to clear import goods against the DFIA Licences and also directed to pay applicable custom duty. In this undisputed position, in our clear view the only remedy left with the appellant is to file appeal before this Tribunal - The appeal is maintainable in terms of Section 129 (1) of the Customs Act, 1962. The contention of the revenue that there is no legal obligation to follow the decision of higher authorities while discharging the quasi judicial powers vested in the Act is incorrect. In the present case, the Commissioner has decided to reject the claim of DFIA benefits by giving reasons in writing. It is also a fact on record that the appellant has been directed to pay applicable customs duty for clearance of goods - the appeal is maintainable and not premature. Merits of the case - HELD THAT:- The DFIA s produced by the appellant are post export entitlements . The DFIA s are issued against Export of Biscuits as per SION E-5. As per the provision of Para 4.27 (ii) of FTP- 2015-20, DFIA is issued for products for which Standard Input output Norms are notified - It is settled law that a DFIA is governed by SION which is notified for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered under the description of goods i.e, fruit/flavour/dietary fibre as mentioned in the annexures annexed along with DFIA Scheme as well as specified in SION. The imported goods In shell Walnuts are not specified under Sensitive items under Para 4.30 of FTP- (2015-2020) of DFIA s. Therefore the exporter is not required to give a declaration of the technical specification, quality and characteristics of inputs used in the resultant product. The Central Board of Excise Customs vide Circular No. 46 of 2007 had earlier clarified the above provisions which existed under the previous policy period under Para 4.55.3 of HBP) - It is settled law that Board Circulars are bindings on customs authorities - As per Policy Circular No. 72/2008 dated 24.03.2009, flexibility has been given to import alternative inputs or goods which are capable of using in the export product. Therefore inputs which are covered under the description are entitled for DFIA exemption for claiming DFIA benefits by either exporter or transferee or the importer under the Transferable DFIA Scheme. As per Policy Circular No. 22, even a transferee of the license can apply for amendments in ITC (HS) Numbers of the inputs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in the DFIA against input item description Fruit /Food Flavour/Dietary Fibre . 3.1. The above decision of the revenue was taken by the Principal Commissioner and the same was communicated through Deputy Commissioner of Customs (Prev) Jamnagar vide letter No. VIII/48-142/CusT/2016/2315 dated 30-09-2020 and Joint Commissioner (I/S), Custom House Pipavav vide letter No. VIII/48-01/Cus-T/Misc/2019-20/575 dated 06/10/2020. It is this decision of rejection of DFIA claim, the appellant is aggrieved with, hence filed the present appeal. 4. Shri Hardik Modh, learned counsel appearing on behalf of the appellant submits that in response to the preliminary objection raised by the Learned Authorised Representative that the appeal is not maintainable since it was filed against the letter issued by Joint Commissioner of Customs, he submits that the appeal is maintainable in terms of section 129 (1) of Customs Act, 1962 for the reason that the final decision was taken by the Principal Commissioner of Customs (Prev.) and it is that decision which was communicated by the Joint Commissioner of Customs (Prev.). Therefore, the order which was communicated to the appellant is given by Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ras Steel Re-Rollers Association vs UOI 2017 (217) ELT 167 (Mad) 5. The case law cited by the respondent has no application as in the said matter, the issue relates to circular issued by CBEC modifying its previous circular with respect of classification of goods. In the instant case, the Commissioner of Customs (Preventive), Jamnagar has taken a decision rejecting the DFIA benefits to the appellant recording reasons for rejection. Therefore, the contention that the assessing officer is required to exercise independent mind and without impartiality and while doing so and take decision considering various documents present before him in totally misplaced. He submits that the Commissioner is a superior authority who has taken a decision in the above case after examining all the documents submitted by the appellant. 6. As regard the merit of the case, he submits that the Customs Authorities are not permitted by law to further elaborate or restrict the scope of the inputs specified in SION. The Revenue has contended that in the case of description Fruit/Cocoa Powder and Dietary Fibre ITC (HS) classification has been shown as 08023100 cannot be allowed to be imported against the Food Fl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Alternative inputs as stipulated in para 4.12 (i) and 4.12(ii) of FTP- 2015-2020 is not defined under chapter 9 of the FTP. The Madhya Pradesh High Court (Indore) in the case of Commissioner of Customs and Central Excise Vs M.P. Steel Corporation (supra) in its judgment dated 18.06.2018 in WP No. 15132 of 2018 has held that the words generic and alternative inputs are not defined under chapter 9 of the FTP. He without prejudice to the above, submits that post transferability of the DFIA, there is no actual user condition exists in the DFIA license. He further submits that the Bombay High Court (Nagpur Bench) in the case of Shah Nanji Nagsi exports Pvt. Ltd. vs Union of India 2019 (367) ELT 335 (Bom.) in para 26 held that basically DFIA scheme is post export scheme in which exporter has to first export goods and after realization of proceeds, exporter has to make an application to the authority who after verification, grant DFIA certificate which is transferable. Therefore, there is no actual user condition inbuilt under the scheme. Without prejudice, he submits that as per provision of para 4.27 (iv) of FTP-20152020, it is interalia stipulated that no DFIA shall be issued for an i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not disputed that the imported material Walnut is covered under the description of fruit/flavour or dietary fibre, mentioned against Export of Biscuits as per SION E-5. In view of above submission, he prayed for setting aside the impugned order and to allow the appeal in full by extending DFIA benefit for duty free clearance of Inshell Walnuts covered under the description of Fruit/ Flavour/Dietary Fiber under the said Transferable DFIA license. 7. On the other hand, Shri Dharmendra Kanjani, Learned Superintendent (Authorised Representative) appearing on behalf of the Revenue raised a preliminary objection that against the letter of the Deputy Commissioner, the appeal is not maintainable before this Tribunal. He submits that the appeal can only be filed under section 129A against an order which is passed by the adjudicating authority. However, in the present case, the letter issued from the Headquarter (Technical), Customs, Jamnagar or by the Joint Commissioner, Customs House, Pipavav stating that the query raised by the department is just and proper and cannot be said to be an order or the decision passed by the Commissioner or Joint Commissioner (i/s) as Adjudicating Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rollers Association vs UOI 2012 (278) ELT 284 (S.C) 2. Madras Steel Re-Rollers Association vs UOI 2017 (217) ELT 167 (Mad) 7.3. As regard the merit of the case, he submits that the exemption from the Customs Duty is available to the material imported in only against the valid Duty free Import Authorisation in terms of paragraph 4.25 and 4.27 of the Foreign Trade Policy under Notification No. 19/2015 dated 01.04.2015. The Central Government vide Notification 21/2015-2020 dated 05/12/2019, as notified the revised Foreign Trade Policy, 2015-2020 effective w.e.f. 05.12.2017. In the revised Foreign Trade Policy, para 4.29 (iv) and (v) have been inserted. As per the said amendment in FTP, it is clearly spelled out that only specific inputs along with quantity will be permitted to be imported under DFIA scheme. He submits that the original exporter has to file the prescribed Annexure, wherein the details of export items as well import items alongwith its Customs Tariff item no. (CTI) are required to be mentioned and based on these information, DGFT issues License with list of import items and export items along with Custom Tariff Item No. Therefore, the subsequent purchaser has no right t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puts as (1) Fruit/Cocoa powder ITC 080220000; (2) Food Flavour-Vanillin ITC 29120000 and (3) Dietary Fiber ITC 08020000, in the resultant export product. Therefore, the subsequent purchaser has no right to import Inshell Walnut having Custom Tariff Classification 08023100 . 7.5. He further submits that the judgment relied upon by the appellant are not applicable to the present case as the facts of those cases were different. In view of above submission, he prayed the appeal may be dismissed as non-maintainable, pre-mature and devoid of any merits. 8. We have heard both the sides and perused the records. As regard preliminary issue of maintainability of appeal before this Tribunal, we find that the decision against which this appeal was filed, was admittedly taken by the Principal Commissioner of Customs which was merely communicated by the lower officer. As per the Ld. Commissioner s decision it was categorically decided that the appellant is not entitled to clear import goods against the DFIA Licences and also directed to pay applicable custom duty. In this undisputed position, in our clear view the only remedy left with the appellant is to file appeal before this Tribunal. 8.1. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a in Final Order No. A/85730/2020 dated 11.09.2020 has taken a view that the imported Inshell walnuts are not liable for confiscation and the exemption claimed by the appellant appears to be correct in view of the Judgements of Hon ble MP High Court (Indore) in the case of Global Exim and in the case of Uni Bourne Food Ingredients LLP Vs. CCE, Hyderabad, it has been held in the said decided case that Inshell Walnuts is allowed to be imported against the DFIA issued against Export of Biscuits Confectionary goods against input items Nut and Nut Products, relevant food flavour, flavouring agent/flavour improvers, dietary fibre and fruit/cocoa powder. 12. We are convinced with the appellant s submission that Chapter Heading 08020000 is the main chapter heading which covers the items of import under the said heading. Therefore the input item Inshell Walnut is correctly covered under the description of goods under Fruit/Flavour/Dietary Fibre as mentioned in the annexures annexed alongwith the DFIA s in question. 13. The Jt. Director, JNCH Lab, Nhavasheva vide F.No. S/16-11/201819/JNCH Lab dated 08.08.2018, on the request of Asstt. Commissioner of Customs, NS, has opined that Walnuts may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nc reported in 2016(331) ELT 155. The appellate Tribunal held that ITC(HS) mentioned in the DFIA is not a criterion to get the benefit under FTP and customs provisions as long as the items imported falls under the description of 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 (supra) 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 2015-20 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. We further find that the Hon ble Bombay High Court , Nagpur bench in the case of Shah NanjiNagsi Exports Pvt. Ltd. Vs. UOI in WP No. 8268/2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of FTP while incorporating the provisions therein. However, the Hon ble Bombay High Court in the case of Shah Nanji Nagsi Exports Pvt. Ltd., Vs. UOI 2019(367) ELT 335 (Bom) has already considered the provision of Para 4.12 for transferred DFIA under the said Judgement and order dated 29.03.2019. Wherein the Hon ble court held as under:- 15 . The controversy revolves around the question, whether petitioner can be allowed to import maize popcorn against DFIA licence for export of starch powder under SION entry No. E75 when admittedly imported popcorn is not used to manufacture export product namely maize starch powder. Petitioner s Learned Counsel conceded that the imported maize popcorn is not used for manufacturing the export goods namely maize starch powder. According to him, there is no such actual user condition as well as the DFIA is transferable. 16 . The petitioner sought clearance of popcorn against DFIA licence issued for export of starch powder as per entry at serial No. E75 of SION. Apparently the norms (E-75) do not refer to any particular category of maize and it is petitioner s understanding that popcorn can be imported duty free against DFIA vide entry No. E75. 17 . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Customs (Export) v. M/s. USMS Saffron Co. Inc. - 2016 (344) E.L.T. 161 (Bom.). In said case, it is observed that if a particular Authorization does not contain any entry for restricting the item (Saffron), then, by an inferential process and when the Licensing Authority did not think it proper to insert it, it will not be permissible to read it in the same. It conveys that in absence of statutory restriction, by inference scope of entry cannot be restricted. 20. The respondents contended that the petitioner has imported popcorn, in gross violation of para 4.12(i) of the FTP, 2015-20 which mandates that whenever SION permits use of generic inputs (maize in this case), the name of specific inputs (popcorn maize) should be endorsed in the relevant shipping bills and the relevant bills of entry. According to respondents maize is generic term used in SION E75 and therefore non-mentioning of specific input violates the above term, and consequently disentitles authorisation. 21 . On the other hand, petitioner vehemently urged that the SION E75 entry i.e. maize itself is a specific term as against generic term. The petitioner would submit that Cereal is a generic term of which maize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port product shall be allowed. Similarly, if the norms provide for import of BOPP film against export of self adhesive tape, only BOPP film required for manufacture of Self Adhesive Tape will be allowed and not those, which are required as packing material. Bare Perusal of Note 1 indicates that, there is no actual user condition but the input must be capable for use of export product. In absence of any specific word, the only requirement appears to be of capability of the input product to manufacture the export goods and no necessity to actually use the same. The plain reading of note-1 nowhere conveys that there is actual user condition. 24 . The statute should be read as a whole, in its context and scheme, to discover what each clause or word is meant and designed under the scheme. Interpretation of words and clauses must depend on the text and the context. There was no difficulty for the framers of the scheme to specifically lay down that the imported items must be used for manufacturing export items. However, in its absence the term can be used must be interpreted as it stands. It simply conveys that the imported item should be potential to use but not necessary to be used. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o import maize without putting any condition or restriction as regards to variety, quality or characteristic in the said entry. Moreover, there is no such corresponding condition in licence. In its absence, any addition of words cannot be imported to change the equation. Precisely, import of popcorn maize is not excluded from the scope of term maize . We may reproduced one of the licence details as under :- 28 . The petitioner has imported maize which is capable of being used in the manufacturing of export goods namely maize starch powder. There is no actual user condition so as to restrict right of petitioner to import maize. So long as the export goods and the import item corresponds to the description given in the SION, it cannot be held to be invalid by adding something else which is not in the policy. 29 . In conclusion, we hold that petitioner is entitled to import popcorn maize under DFIA scheme vide SION entry E75 and answer accordingly. We are not inclined to go into the rest of the technicalities which are left to the authority to decide as per policy. 30 . In the light of the above discussion, we partly allow writ petition and hold that under DFIA scheme vide SION entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iption given and even if the input is not used actually in the export product the benefit of DFIA should be extended therefore, all the issues raised by the revenue in the present case have been elaborately dealt with by the Hon ble Mumbai High Court of Nagpur Bench. 19. We as per judicial discipline cannot deviate from the ruling made by the Hon ble High court. Accordingly, the appellant is entitle for DFIA Scheme in respect of import of inshell Walnut. 20. The imported goods In shell Walnuts are not specified under Sensitive items under Para 4.30 of FTP- (2015-2020) of DFIA s. Therefore the exporter is not required to give a declaration of the technical specification, quality and characteristics of inputs used in the resultant product. The Central Board of Excise Customs vide Circular No. 46 of 2007 had earlier clarified the above provisions which existed under the previous policy period under Para 4.55.3 of HBP). 21. It is settled law that Board Circulars are bindings on customs authorities as held by Hon ble Gujarat High Court in the case of F.S. Enterprise Vs. State of Gujarat reported in 2020(32) GSTL 321 (Guj). 22. As per Policy Circular No. 72/2008 dated 24.03.2009, flexibi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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