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2015 (4) TMI 381 - CESTAT MUMBAI

2015 (4) TMI 381 - CESTAT MUMBAI - 2015 (327) E.L.T. 77 (Tri. - Mumbai) - Revalidation of Duty Free Import Authorization Licenses (DFIA) - DFIAs could not be debited (utilized as the department had not permitted duty free import of Sodium Saccharin, Ascorbic Acid by importers against DFIA Licences in terms of benefit under Customs Notification No. 40/2006 - could not be utilized due to the ongoing litigation - Held that:- Lower authorities have misread the provisions of law. As per the Handbook .....

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tion. In fact the Commissioner (Appeals) acknowledges this position but comes to a conclusion that there are no express provisions for issue of certificates for revalidation. - Commissioner (Appeals) accepts the fact that the licenses are to be revalidated by the licensing authority but does not acknowledge that the licensing authority has no information about the prolonged litigation through the importer went while importing the said goods under DFIAs. This information only, can help DGFT to al .....

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r is in litigation it is not in the hands of the importer or the Customs Authorities to finalize the issue" within the time frame of the licenses. In fact, the licenses remained in constructive custody of customs because customs refused to debit the licenses for duty free import of such goods by all importers. - Decided in favour of assessee. - Appeal No. C/89325/2014 - Final Order No. A/525/2015-WZB/CB - Dated:- 16-3-2015 - Anil Choudhary, Member (J) And P. S. Pruthi, Member (T),JJ. For the App .....

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oda Ash. The said DFIAs permit duty free import of, inter alia, Corrosion Inhibitors/Water Treatment Chemicals. The appellants submitted representations to Customs stating that the DFIAs could not be debited (utilized as the department had not permitted duty free import of Sodium Saccharin, Ascorbic Acid by importers against DFIA Licences in terms of benefit under Customs Notification No. 40/2006. This dispute regarding Saccharin was decided by Hon'ble CESTAT Mumbai vide Order No. A/318/13/C .....

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ense. Further, the Hon'ble Tribunal, in view of High Court's Order rejected the stay application filed by Revenue in the same case against the order of Commissioner (Appeals) who had decided the matter in favour of the party. Thus the matter of import of Saccharin and Ascorbic Acid against DFIA Licenses was in litigation. The appellants represented to the Customs department that they had purchased various DFIAs from the market of the above mentioned disputed items, which could not be uti .....

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es are issued to the exporter under the export incentive schemes to boost the export and to earn the foreign exchange. In fact it is against the spirit of Import Export Policy and export incentives declared by the Government. However, I find that there are no express provisions, for issue of certificates for the licenses expired in the hands of the Importer/Exporter due to litigation raised by the customs authority. In view of the above findings, the appeal is disposed off". Against this or .....

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tion came to the conclusion that there is no provision for issue of certificate for revalidation of the DFIAs in terms of Para 2.13.1 of the Handbook of Procedures. According to Ld. Counsel, the appellant only wanted a confirmation from the department confirming the litigation during which the licenses could not be utilized. The licensing authorities could not have revalidated the licenses without factual confirmation from Customs explaining the reasons for non-utilization. 4.1 It was confirmed .....

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customs authority/RA." According to Ld. AR, the DFIAs were not in the physical custody of the department and therefore revalidation of DFIAs cannot be permitted. In his written submissions he has raised doubts regarding evidence of transfer of licences to the appellant and amount of value transferred as well as the validity of licenses on the date of transfer to the appellants. According to him, only DGFT has proper jurisdiction to revalidate licenses. It was also submitted that the earlie .....

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rmit the revalidation of freely transferable DFIAs. There is no dispute on this. But it should be fairly understood that adequate justification for revalidation has to be made available to DGFT. And this information can only be made available by Customs. The appellant has merely sought a statement for issue by Customs to the DGFT certifying that the admissibility of import of Saccharin/Ascorbic Acid against the DFIAs licenses remained in litigation. In fact the Commissioner (Appeals) acknowledge .....

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n will remain in his hand and may expire if litigation continues for a long period of time. Further under such licenses (DFIA) number of items can be imported as per SION norms. They could have utilized license for other items but due to litigation disputed item may have remained unutilized. These licenses may have been purchased by them after starting of litigation but before finalization of issue. In the present case, the appellant have asked for the certificate from the Assistant Commissioner .....

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authority but does not acknowledge that the licensing authority has no information about the prolonged litigation through the importer went while importing the said goods under DFIAs. This information only, can help DGFT to allow revalidation. 7. The Ld. AR in his written submissions has raised the issues of evidence regarding transfer of licenses and amounts unutilized, validity of licenses on date of transfer etc. We find that these issues were never before the lower authorities nor have we se .....

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tigation went to the level of CESTAT which gave decisions in 2013 (saccharin) and in 2011 (ascorbic acid). From the records, we see that the appellant M/s. Pushpanjali Floriculture Ltd., in its letter dt. 19.5.2010, very clearly informed the Dy. Commissioner Customs, Nhava Sheva that they are holding DFIAs that could not be utilized for the relevant import of Sodium Saccharin due to prolonged litigation. Thereafter, they made repeated requests for duty free import against the DFIAs. In the said .....

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. 8. We also note that apart from being transferees of licenses, the appellants have also imported Saccharin and on provisional basis during the period in dispute. Therefore, it cannot be said that the appellants were only making their request on the basis of litigation undergone by other importers. In any case, the fact that the import of said goods under DFIAs was in dispute is sufficient ground for holding that the licenses could not be utilized due to litigation with customs. It is to be not .....

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