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2013 (8) TMI 131 - DELHI HIGH COURTNature of entitlement – duty credit - export incentive under the scheme called the Target Plus Scheme (TPS) - Nexus with import - Whether a change to the duty credit entitlements announced by the FTP can be brought about without amending such policy and by issuing Circulars and Notifications or Forms – Held that:- credit can be used for import of any inputs, capital goods including spares, office equipments, professional equipment and office furniture. Such imports can be used not only by the exporter, but even by the supporting manufacturer. Obviously, office equipment, professional equipment and office furniture have no nexus with the exports, the question is about inputs. When the expression is “import of any inputs” whether it would mean only those inputs which have nexus with the nature of goods exported. That is not following from the scheme. When we read the later portion of this para dealing with import of agricultural products, we find that some items which are allowed to be imported are specifically mentioned. Again, when those items are mentioned, it is not necessary that they will have nexus with the exports made by a particular export houses. When we look the matter from this angle and even proceed on the basis that ‘broad nexus’ criteria used in Handbook of Procedures Vol. I for the period from 1-9-2004 to 31-3-2009, the word ‘broad’ prefixed with nexus, the word ‘nexus’ has to be assigned same meaning. The nexus has to be maintained that ‘product group’, viz., the category of the products which is exported. If the import also falls in the same category/group, it would be allowable. Imports under TPS may be carefully scrutinized with reference to the provisions of the FTP, Handbook of Procedures, the customs notifications and Board’s Circular referred to above so as to ensure that the laid down provisions regarding ‘inputs’, ‘broad nexus’ and ‘use’ and ‘supporting manufacturer(s)’ are complied with - FTP by itself does not indicate that the imported goods should constitute ‘inputs’ in the goods exported - Relying upon Atul Commodities Pvt. Ltd. v. Commissioner of Customs [2009 (2) TMI 18 - SUPREME COURT] and Narendra Udeshi v. Union of India [2002 (10) TMI 646 - BOMBAY HIGH COURT] – Decided against assesse.
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