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Lactose (I) Ltd. Versus Commissioner of Customs (ACC & Export) Mumbai

2015 (11) TMI 1019 - CESTAT MUMBAI

Benefit of duty-free exemption under DFIA scheme has been denied primarily on the ground that the import took place after the issue of the policy circular dated 31.1.11 - appellant contended that, the policy circular no 13 dated 31.1.2011 did not amend the SION norms otherwise there was no need to amend the same on 1.2.2011 - notification No 98/0 - Held that:- Letter was issued to a particular party but the Policy Circular 72 mentioned above still prevailed in general. Support is had from the Ma .....

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ated 15.4.2010, will be made applicable to the license, as it extends the benefits of flexibility to import the alternative input/product mentioned in the SION and that appears to be the main tenor of the petitioners seeking release of the lactose stating that the clarification and the circular which were in force at the time of issuance of license will be applicable to the goods imported and not the subsequent clarifications.

Even if the actual user condition was brought in in 2011 .....

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r of assessee. - Appeal No. C/85561/2015-Mum and Appeal No. C/88889/2013-Mum - Final Order Nos. A/1782-1783/2015-WZB/CB - Dated:- 15-6-2015 - Mr. Anil Choudhary, Member (Judicial) And Mr. P.S. Pruthi, Member (Technical) For the Petitioner : Shri Prakash Shah, Advocate with Shri J.C.Patel, Advocate and Shri Prasad Paranjape, Advocate For the Respondent : Shri M.S. Reddy, Deputy Commissioner (A.R) ORDER Per : P.S. Pruthi M/s Lactose India Ltd, the appellant, have filed appeals against the impugned .....

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tose/ sodium saccharine and other artificial sweetening agents is not allowed under SION E-5 against the input item no 2, that is sugar. The appellants plea before the adjudicating authority that the license had been issued to M/s Parle Products Private Limited (original manufacturer exporter) prior to the circular was rejected. The authority held that the date of shipment, in this case 2013, is the relevant date for applicability of a license. The authority also rejected the contention that th .....

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r Institute confirmed that lactose can be considered as another sugar (milk sugar); further that para 4.2.2b of the policy states that DFIA is issued as per the policy and procedure prevailing on the date of issue of authorisation; therefore date of bill of lading cannot be considered while deciding the validity of the policy circular. The Commissioner appeals held that the decision of DGFT is final and binding in terms of para 2.3 of Foreign trade Policy and that clarification circulars are ret .....

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d. And the amended SION norms E 5 which substituted the entry Sugar by the entry cane sugar was issued only under DGFT Public notice No 93 dated 1.2.2012. Therefore prior to this date the policy circular relied upon by Revenue does not have the effect of amending the SION. He relied on the decision of the Madras High Court in the case of Hoeweitzer Organic Chemical Co Ltd versus DGFT 2013 (294) ELT (Mad) which held that Policy circular no 13 dated 31.01.2011 will have no effect in respect of lic .....

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ued by the DGFT on 31. 7.2008 in the case of SION E -1 and SION E 5 stating that lactose can be considered as sugar against the export of biscuits and confectionery. This clarification has not been cancelled. In any case, he submitted that, the policy circular number 13 dated 31.10.2011 interpreted the entry Sugar listed in SION E5 only. Therefore import of lactose against the entry sugar listed in the DFIA number 031066278 dated 25.10.2011 issued against the export of Metamin Tech cannot be s .....

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d (which is used in the manufacture of metamin). 4.2 The ld counsel referred to para 4.32.2. of the policy for the DFIA scheme which mentions that for 22 items the licensing authority, while issuing DFIA, shall mention the technical characteristics, quality and specifications in respect of such inputs. Sugar not being specified in the list of 22 items, it is therefore permissible to import forms of sugar such as lactose. 5 The ld AR appearing on behalf of Revenue stated that the DFIA was issued .....

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at no further import of lactose may be allowed as an alternative input to sugar under SION E-5. He further stated that deletion of AU condition in the amendment sheet after change of policy is an error on the part of the Licensing authorities. He distinguished the facts in the present case from the facts in the case of Madras High Court judgement (supra) explaining that in the facts of the Madras High Court judgement, the license was issued prior to the change in policy and therefore it does not .....

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the export of biscuits in terms of SION norms E -5. The DFIA number 031066278 dated 25.10.2011 was issued to M/s Excel Crop Care Ltd against export of Metamitron. The SION No E-5 relating to biscuits was amended vide Public Notice No 93 dated 1.2.2012 by addition of note 1 which states that import of lactose is not allowed as a substitute input against import item number 2, that is cane sugar. However there was no such restriction prior to 1.2.2012. The SION norms prevalent at the time of issue .....

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e DGFT letter number 1/94/1 8 0/1 5 1/A.M/PC 4 dated 31.7.2008 addressed to Commissioner of Customs Exports Chennai stating that Taking into account the inputs received from the aforesaid technical authorities and the provisions of customs circular No 46/2007 CUS dated 20. 12.0 7 to be read with inputs allowed under relevant the DFIA for import of sugar (as per relevant SION) as well as the contents of paragraph 4. 55. 3 of HBP volume 1, I have been directed to inform you that sugar in the form .....

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n the SION. In view of these communications of DGFT, the benefit must be allowed as per policy on the on the date on which DFIA was issued read with Board Circular 46/2007 . The ld AR pointed out that a letter to M/s Kawarlal and Co Chennai in September 2010 communicated that the Norms Committee decided that no further import of lactose may be allowed as an alternative input to sugar under SION E-5. We find that this letter was issued to a particular party but the Policy Circular 72 mentioned ab .....

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e of license in question dated 15.4.2010, will be made applicable to the license, as it extends the benefits of flexibility to import the alternative input/product mentioned in the SION and that appears to be the main tenor of the petitioners seeking release of the lactose stating that the clarification and the circular which were in force at the time of issuance of license will be applicable to the goods imported and not the subsequent clarifications. This judgement referred to the decision of .....

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ve inputs. In view of the stated judicial pronouncements we find no reason to deny the benefit of exemption to the appellant. 6.3 As regards the DFIA issued against the export of Metamitron it is seen that the policy circular No 13 dated 31.10.2011 interpreted the entry Sugar listed in SION E5 only. Therefore import of lactose against the entry sugar listed in the DFIA number 031066278 dated 25.10.2011 issued against the export of Metamin Tech is definitely not restricted by the circular. 6. .....

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