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2017 (9) TMI 1144

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..... orsed as transferrable after 01.08.2013. Admittedly, there is no dispute in this case that DFIA has already been transferred. Therefore, the provisions of notification no.31(RE-2013)2009-14 dated 01.08.2013 are not applicable to the facts of this case. As appellant has exported the goods availing the benefit of N/N. 40/2006-Cus dated 01.05.2006 and complied with conditions thereof. Therefore, the proceedings are not sustainable against the appellant - as the DIFA has already been transferred and no objection was raised by customs authorities as well as DGFT while transferring or during the export of goods, in that circumstances, provisions of notification no.31(RE-2013)2009-14 dated 01.08.2013 are not invokable - redemption fine and penalty set aside. Appeal allowed - decided in favor of appellant. - C/53217-53218/2015-CU[SM] - A/56364-56365/2017-SM[BR] - Dated:- 1-9-2017 - Mr. Ashok Jindal, Judicial Member Present Shri Bipin Garg, Advocate for the appellant Present Shri K. Poddar, DR for the respondent ORDER Per: Ashok Jindal The appellants are in appeal against the impugned order imposing redemption fine and penalty. 2. The facts of t .....

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..... equently, the redemption fine was imposed and penalties on both the appellants were imposed. Aggrieved from the said order, appellants are before me. 5. Shri Bipin Garg, Ld. Advocate for the appellant submits that it is clear from the notification no.40/2006-Cus dated 01.05.2006 that 22 items specified in para 4.55.3 of HBP are the resultant products. The resultant product in appellant s case is pan masala, pan masala gutkha and these items are not specified in the said para. Therefore, the proceedings against the appellant are not sustainable in the light of the decision of this Tribunal in the case of CC Vs. Sicpa India Ltd. 2012 (279) ELT 113 (Tri) in the case of and Global Exim Vs. CC (Export) 2010 (253) ELT 417 (Tri.) which has been affirmed by the Hon ble Bombay High Court reported as 2010 (259) ELT A139 (Bom.). 6. He further submitted that neither the customs authorities nor the DGFT raised any objection at the time of exporting the goods and transferring the license. It appears that after getting policy circular no. 57/2009-14 dated 06.03.2012, the authorities were of the view that specified items are inputs and not the resultant products and started taki .....

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..... ghtly held the goods liable for confiscation and imposed redemption fine and penalty. 9. Heard both the sides and considered the submissions. 10. For better appreciation of the facts of the case and to arrive at correct decision, the relevant provisions are extracted below: Notification no.40/2006-Cus dated 01.05.2006 (i) that the description, value and quantity of materials imported are covered by the said authorization and the said authorization is produced before the proper officer of customs at the time of clearance for debit: Provided that in respect of resultant product specified in paragraph 4.55.3 of the Hand Book of Procedures (Vol.I) of the Foreign Trade Policy, the materials permitted in the said authorization or a duty free import authorization for intermediate supply, as the case may be, shall be of the same quality, technical characteristics and specifications as the materials used in the said resultant product. Provided further that in respect of the said resultant product the exporter shall give declaration with regard to the quality, technical characteristic and specifications of materials used in the shipping bill. Para 4.55.3 of .....

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..... all be complied by RAs for cases covered under paragraph 4.32.2 of HBP v1:- (i) At the time of issuance of DFIA: Ensure that the exporter has given the details with regard to technical characteristics, quality and specifications in the application for DFIA (as at Sl. No.15 of ANF A-H). RA should specify the details of technical characteristics, quality and specifications of such items in the DFIA. Notification no.31(RE-2013)2009-14 dated 01.08.2013 :- In exercise of powers conferred by Section 5 of the Foreign Trade (Development Regulation) Act, 1992 (No.22 of 1992) read with paragraph 1.2 of the Foreign Trade Policy, 2009-2014, the Central Government hereby notifies the following amendments in the Foreign Trade Policy (FTP) 2009-2014. 2. After para 4.1.14 of FTP a new para 4.1.15 is inserted. 4.1.15 Wherever SION permits use of either (a) a generic input or (b) alternative inputs, unless the name of the specific input(s) [which has (have) been used in manufacturing the export product] gets indicated / endorsed in the relevant shipping bill and these inputs, so endorsed, match the description in the relevant bill of entry, the concerned Authorisa .....

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..... Applicability of provisions of para 4.1.15 of FTP have been further elaborated. 11. On going through the said provisions of notification no.40/2006 ibid clause 1 provisio provides that in respect of resultant products specified in para 4.55.3 of the handbook of procedures, the material permitted in the said authorization or the duty free authorization or the intermediate supply shall be for technical characteristic and specification as the material used in the said resultant product. Provided further that in respect of said resultant product, the exporter shall give declaration with regard to technical quality, characteristics and specifications in the shipping bill. The notification no.40/2006 provides that the items mentioned in para 4.55.3 of HBP are the resultant products. 12. On going through the para 4.55.3, the resultant product manufactured by the appellant is pan masala, pan masala gutkha have no mentioned therein. The dispute has been arose between appellant and the Revenue is that as perfumes / essential oil are mentioned as an item (out of 22 items mentioned) in para 4.55.3 in respect of those items the appellant is required to give technical characteristics, q .....

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..... ion of imported inputs to the export product is required only for products specified in para 4.55.3 of the Handbook of Procedures. The same has been explained in the 1st proviso to the Notification No.40/2006-Cus. and is required only in the case of products specified in paragraph 4.55.3 of the Handbook of Procedures (Vol. 1) of the Foreign Trade Policy, the materials permitted in a duty free import authorization need be of the same quality, technical characteristics and specifications as the materials used in the resultant product. In Board Circular No.16/2006 dated 9-5-2006 also clarified that only for the items specified in paragraph 4.55.3 of the Handbook of Procedures correlation is required and M/s. SRHI is the exporter of rice which are packed in printed polypropylene bags which is not covered under the items specified in para 4.55.3 of the Handbook. 16. I further find that as per public notice no.35(RE13)2009/14 dated 30.10.2013 the provisions of notification no.31(RE-2013)2009-14 dated 01.08.2013 are not applicable if DFIA has been endorsed as transferrable after 01.08.2013. Admittedly, there is no dispute in this case that DFIA has already been transferred. Therefo .....

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