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2015 (9) TMI 973 - CESTAT AHMEDABAD

2015 (9) TMI 973 - CESTAT AHMEDABAD - 2015 (328) E.L.T. 385 (Tri. - Ahmd.) - Duty free import authorisation - Transferable DFIA - Respondent filed Bill of Entry for clearance of “Phosphoric Acid” 85% technical grade and claimed duty free clearance against DFIA in terms of Notification No 98/2009-cus – By impugned Order, Commissioner (Appeals) allowed claim of Respondent – Held that:- DFIA was originally issued by exporters and after fulfilment of export obligation, same was transferred to Respon .....

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respondent – In present case, Phosphoric Acid had specific entry mentioned in DIFA Licence – Once license was endorsed for transferability by licensing authority, nexus between import goods use in export goods, was not required to be established afresh by transferee – Decided against Revenue. - Appeal No. : C/10246/2015, (C/Others/10269/2015, C/EH/10257/2015) - ORDER No. A/10711 / 2015 - Dated:- 9-4-2015 - Mr. P.K. Das and Mr. H.K. Thakur, JJ. For The Appellant : Shri K Shivkumar, Authorised Re .....

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or duty free import of goods. The Assessing Officer denied the benefit of exemption notification on the ground that the exporter did not provide the actual quantity of Phosphoric Acid used in the export goods. It is observed that as per DGFT notification No 31 dated 1.8.2013 read with Public Notice No 35 dated 30.10.2013 and DGFT notification No 90 dated 21.8.014, it is mandatory to state the actual quantity of inputs used in the export product to avail DIFA benefit. By the impugned Order, the C .....

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products, shall be allowed under DFIA. Admittedly, the exporter failed to produce any evidence in this regard. The exporter has not stated that Phosphoric acid was actually used in the export product in the shipping bills. The exporter failed to produce any evidence of actual quantity of phosphoric acid to be used for the manufacture of export products and the technical reference as placed by the respondent would not serve any purpose. It is submitted that the decision of the Tribunal in the cas .....

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vered a list of inputs as per SION in force on the date of issue of DFIA. The licensing authority endorsed the transferability of the DFIA on 13.3.2014 without any restriction. Further, Phosphoric Acid is specifically mentioned in DFIA. So, DGFT Notification No 31 dtd 1.8.2013 is not applicable for such specific item. The Licensing Authority noticed that Phosphoric Acid in the SION A 3627 would not cover generic or alternate inputs and the DGFT Notification No 31 dated 1.8.2013 would not apply. .....

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restrict the import as per DGFT Notification No 31. So, it is not necessary to establish the utilisation of imported goods in the resultant product. He relied upon following case laws : a) CC, Good Luck Industries - 2000.120.ELT.A66 (SC) b) CC, Alfa Exim - 2000-120.ELT.A195 (SC) c) CC, Salem Stainless Steel - 2001-131.ELT.39 (Mad) He further submits that the DGFT Notification No. 90 dtd 21.8.2014 would be effective prospectively and not applicable in the present case as DFIA was issued on 17.10 .....

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id not provide the information to the department. As the exporter fulfilled export obligation, the licence were transferred to the respondent/importer as endorsed by the Licensing Authority. In such situation, in our view, the exporter cannot be compelled to furnish any information in respect of the said DFIA, which has already been transferred to the respondent. The Tribunal in the case of M/s Uni Colloids Impex Pvt Ltd (supra) after following the decision of the Hon ble Supreme Court and High .....

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Ahmedabad. The Tribunal held that as per provision of Para 4.2.2. (b) DFIA is issued as per the policy and procedure in force as on the date of issue of authorisation. Therefore, Notification No 31 issued on 1.8.2013 cannot be made applicable to DFIA s issued prior to that date. By following the decision of Hon ble Tribunal, the appellant in the instant case is not required either to declare the actual input or its quantity used in the export product, since the DFA is issued as per standard Inpu .....

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the Ld Asstt Commissioner of Customs denying the benefit of notification by contending that the actual input and its quantity is required to be declared for allowing duty free clearance of phosphoric Acid is not correct. It is well settled in law that once a license is issued by DGFT, Cosmos cannot go beyond the scope of the license. The case cited by the appellant in the case of Arkema Catalysts India Pvt Ltd vs Union of India - 2012.276.ELT/206 (Bom) and in the matter of Hindustan Lever Ltd vs .....

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ni Colloids Impex Pvt Ltd. The relevant portion of the decision of the Tribunal in the case of Unio Colloids Impex Pvt Ltd (supra) is reproduced below : In Aditya Birla Nuvo Ltd. v. CC - 2010 (249) E.L.T. 273 (Tri. - Bang.), while relying on various precedent decisions of higher judicial foras, this Tribunal held as under - 8.6 We now take up next issue framed by us i.e., issue (g) for discussions. (g) Whether the appellant has failed to establish nexus as envisaged in advance licensing scheme? .....

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), the Hon ble Supreme Court upheld the Tribunal s judgment in Goodluck Industries v. Commissioner - 1999 (108) E.L.T. 818 (Tribunal) laying down the said ratio, and on merits dismissed the same appeal filed by the Commissioner of Customs, Calcutta against the same. In Jayant R. Patel v. CC, Hyderabad - 1997 (89) E.L.T. 164, the Tribunal held that the duty free import entitlement are not to be proved again by the exporter or the transferee of license once advance license is granted and vide Comm .....

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ourt in the matter CC (Imports), Mumbai v. Hico Enterprises - 2008 (228) E.L.T. 161 (S.C.) held that the Customs Department cannot compel the appellant-importer who are the transferee to once again prove that the export obligation has been fulfilled by the original license holder in accordance with the notification. With this clear exposition, it is emphatically clear that in case of transferable license the nexus between the imported material and export product is not required to be proved afre .....

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se authoritative judicial pronouncement, only to deny the exemption benefit granted by the license. Merely because in the instant case, licenses are not transferable, it does not mean that the customs authorities are permitted to go beyond the license to deny exemption benefits. In the instant case, the specifications of the goods imported are squarely covered by the advance license issued by the licensing authority. The appellant has thus established a nexus as envisaged by the advance licensin .....

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resultant product figures in the sensitive list and the theory of broad nexus being settled by Apex Court. Moreover, Para 4.2.2(b) of Foreign Trade Policy stipulates that DFIA shall be issued in accordance with Policy and procedure in force on date of issue of Authorisation. We are therefore not impressed by the submission of the Revenue that the position as prevailing on the date of clearance would govern imports under valid licence. The appellant, who are transferee, cannot be compelled to est .....

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010 (259) E.L.T. A139 (Bombay High Court), it was observed that - 4. According to the Revenue, a co-relation of technical characteristics, quality and specification is required to be established in respect of bearings sought to be imported that the bearings were actually used in the resultant product. 5.The Tribunal did not agree with the submissions made by the Revenue which were pressed into service by Revenue before the Tribunal and rejected them making following observations : Having allowed .....

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making exports in the shipping bill lies on both customs as well as DGFT authorities and having missed the bus at the time of export, it may not be correct to insist on specifications from a transferee of DIFA. Further we also take note of the fact that DGFT is supposed to ensure that all the requirements have been fulfilled before allowing transferability. 6.The above findings recorded by the Tribunal is based on the documentary evidence. Even during the course of hearing, the learned counsel a .....

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