TMI Blog2010 (4) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... which were exported product not specified in the list under para 4.55.3, however bearing listed therein which were imported material. Conditions prescribed under para 4.55.3 not applicable. Thus exemption under Notification available. - C/791/2009 - A/95/2010-WZB/C-II/(CSTB), - Dated:- 5-4-2010 - S/Shri B.S.V. Murthy, Member (T) and Ashok Jindal, Member (J) Shri J.C. Patel, Advocate, for the Appellant. Shri B.P. Pareira, JDR, for the Respondent. [Order per : B.S.V. Murthy, Member (T)]. - Appellants imported bearings and claimed exemption under the Notification No. 40/2006-Cus. on the strength of a transferred Duty Free Import Authorisation (DFIA). It is a condition of the notification that if the resultant export product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orting bearing 'upto 50 mm Dia' and therefore there is no violation of any of the conditions stipulated in Custom Notification No. 40/2006. Further, in the case of Jay Engg. Works v. CC, Chennai and reported in 2003 (162) E.L.T. 680 (Annexure G) the Hon. Tribunal had held that since the license is based on SION, the physical incorporation of the input in the export product is not required. The export product is a motor. Bearings are capable of being used in the motor. The Board in its Circular No. 1/94 dated 5-1-94, (Annexure 'H') had clarified that the word 'required' does not mean that goods imported must be physically incorporated in the export product. The learned Commissioner failed to appreciate that 'transferability' endorsements are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without specifying the CIF value for each one of the items, allowed to be imported and the resultant products were also allowed to be exported, now it is not available to the appellant to contend otherwise, particularly, when all other conditions incorporated in the license and the notification have been complied with. Being a transferee of DFIA, it is not for the transferee to prove the nexus between the imported product and the inputs used in the export product once the transferability is allowed. Hon'ble Supreme Court in a plethora of cases have unequivocally held that once a license is made transferable, then a transferee need not have to prove the nexus between imported products and inputs used in the export product. 3. On the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importer to check up whether full specifications of the items imported are available or not before obtaining the license on transferable basis. He submits that it was the duty of the exporter to give full specification of the inputs used at the time of exporting motors and having failed to do so, they cannot be allowed to import all types of bearings under a transferred license. 4. We have considered the submissions made by both the sides. Notification No. 40/2006-Cus., dated 1-5-2006 exempts materials imported into India against a Duty Free Import Authorization (DFIA) subject to the condition that the description value and quantity of materials imported are covered by the said authorization and the authorization is produced at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... characteristics, quality and specifications in respect of the items listed below the paragraph whereas according to the notification, these are resultant products which are exported. Obviously, there appears to be a contradiction between the notification and the paragraph. Nevertheless, in such a situation what is required to be taken into account is the provisions in the exemption notification issued under Customs Act, 1962 and the Notification No. 40/2006 is very clear. Because the notification clearly says that in respect of resultant products specified in paragraph 4.55.3, the imported materials should be of the same quality, technical characteristics and specifications as the materials used in the resultant product. Therefore, we have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng missed the bus at the time of export, it may not be correct to insist on specifications from a transferee of DFIA. Further, we also take note of the fact that DGFT is supposed to ensure that all the requirements have been fulfilled before allowing transferability. On these grounds also we find that the department has not been able to make out a case. Further, as regards CIF value of bearings and the submissions made by DR, we find considerable force in the arguments advanced by the learned advocate and also find that his reliance on the decision of the Madras High Court in Tamilnadu Dadha Pharmaceuticals Ltd., Harison Chemicals appropriate. Further, we also note that the decisions of the Tribunal cited by the learned advocate that if the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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