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2018 (11) TMI 1404 - HC - CustomsInterpretation of Statute - Notification No. 40/2006-Cus dated 01.05.2006 - ara 4.55.3 of the Handbook of Procedure for Export and Import - export of goods - pan masala - gutka - DFIA Scheme - According to the Revenue, the effect of the HBP and the exemption notification was that the assesse had to mention the technical characteristics, quality and specifications of the perfumes/essential oils/ aromatic chemicals used by it in its shipping bills. Held that:- This court is of the considered view that the revenue’s argument is merited and deserves acceptance. The DFIA scheme was intended to permit duty free import of inputs used in the manufacture of exported goods. The licenses issued by the DGFT thereunder are subject to the conditions stipulated in the HBP. Insofar as the license is in respect of the products specified in paragraph 4.55.3 thereof, the licensee is required to furnish a declaration with regard to the technical characteristics, quality and specification in the shipping bill. Interpretation advanced by the assessee, (and accepted by the Tribunal) is that the declaration requirement of the exemption notification is applicable only if the exported goods are included in the list of items enumerated in paragraph 4.55.3. This contention cannot be accepted - The consequence of the assessee’s interpretation would render it impossible to correlate the duty-free imports made under the DFIA, with the inputs used in the exported products. Further, if the “resultant products” are those enumerated in paragraph 4.55.3, then this interpretation would require a declaration of the quality, technical characteristics and specification of the materials used in those items. Such a construction, in this court’s opinion, is unreasonable as the DFIA is intended to exempt inputs used in production of other goods in India, and is not concerned with the materials that have been used in the production of those inputs. The questions of law framed are answered in the affirmative, i.e. in favour of the revenue and against the assessee - Appeal allowed.
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