TMI Blog2018 (10) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent No.1, the license and goods imported there under without payment of duty become freely transferable except the fuel and any other goods notified by the DGFT. In the case in hand, the resultant product is 'Agricultural Tractors' which is not specified under para 4.32.2 of HBP and therefore, the petitioners are not required to correlate the technical specification, quality and characteristics of the imported goods. The Transfer Letter issued by Pushpanjali Floriculture Ltd to Global Exim clearly indicates that transfer of DFIA which is permitted as per the provision of Para 4.2.6 of the FTP-(2009-14). The DFIA licenses are freely transferable and accordingly, the DFIA holder transferred the DFIA to Pushpanjali Floriculture Ltd., who in turn re-transferred the said DFIA to Global Exim as per Annxures P/2 and P/3 - In any event, insistence of actual use in the export product is contrary to the provision of Para 4.2.6 of Foreign Trade Policy – (2009-14). The said para stipulates that once transferability is endorsed, authorization holder may transfer the DFIA or duty free inputs, except fuel and any other items notified by DGFT. Once the imported goods are covered und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, unreasonable and unsustainable in law. 2. The petitioner No.1 is a partnership firm registered under the Indian Partnership Act, 1932, having its office and place of business at Indore. 3. The Foreign Trade Policy (FTP) for 2009-14 was notified by the respondent No.1 incorporating the provisions relating to the import and export of goods. The relevant provision of duty exemption / remission schemes are covered under Chapter 4 of the Foreign Trade Policy and Hand Book of procedures. 4. Clause 4.2.2 and 4.2.3 of DFIA reads as under :- Scheme 4.2.2 DFIA is issued to allow duty free import of inputs, fuel, oil, energy sources, catalyst which are required for production of export product. DGFT, by means of Public Notice, may exclude any product(s) from purview of DFIA. This scheme is in force from 1st May, 2006. Entitlement 4.2.3 Provisions of paragraph 4.1.3 shall be applicable in case of DFIA. However, these Authorization shall be issued only for products for which Standard Input and Output Norms (SION) have been notified. 5. The petitioner is a transferee DFIA Holder and entitled to import the goods of the description, quality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut that the query is not clear and therefore needs to be clarified in order to make appropriate reply. 11. The respondent No.3 thereafter replied to the said letter by rejecting the benefits of customs notification No.98/2009-Cus dated 11.09.2009. The same is reproduced below :- BE No.6993518 dated 28.06.2018 Description of the goods given in the BE does not cover in the DFIA Authorisation. Imported goods ie., bearings must be actually used in the export product in terms of DGFT Notification No.31 dated 01.08.2013. Moreover goods being specified under Para 4.32.2 of HBP, tecl. Specs., quality and characteristics of the goods imported must match with the inputs used in the exported. You have not produced any evidence of so benefit under Customs Notification no.98/2009 is denied. Further the authorization of DFIA from the transferee does not reflect your complete details. 12. Clause 4.2.6 of the FTP reads as under :- 4.2.6 (a) Once export obligation has been fulfilled, request for transferability of Authorisation or inputs imported against it may be made before concerned RA. Once transferability is endorsed, Authorization holder may transfer DFIA or du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r words, the name / description of input used (or to be used) in the Authorisation must match exactly the name / description endorsed in the shipping bill. At the time of discharge of export obligation (EODC) or at the time of redemption, RA shall allow only those inputs which have been specifically indicated in the shipping bill. 3. Para 4.2.3 of FTP is being amended by adding the phrase 4.1.14 and 4.1.15 in place of and 4.1.14 . The amended para would be as under : Provisions of paragraphs 4.1.11, 4.1.12, 4.1.13, 4.1.14 and 4.1.15 of FTP shall be applicable for DFIA holder. 4. Effect of this Notification : Inputs actually used in manufacture of the export product should only be imported under the authorization. Similarly inputs actually imported must be used in the export product. This has to be established in respect of every Advance Authorization / DFIA. 15. On 2.8.2013, Circular No.3 (RE:2013) / 2009-14 was issued with the approval of respondent No.2, laying emphasis on para 4 which stipulates that inputs actually used in manufacture of export product should only be imported under the authorization. Similarly, inputs actually imported must be used i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Regional Licensing Authorities have not made any additional endorsements. In the absence of any further endorsements, the Regional Licensing Authorities deemed to have permitted import of Bearings without any additional requirement with respect to technical specification, quality and characteristics of the inputs used in the export product. The DFIA transferee is not required to prove, afresh, whether the inputs are actually used in the export product. 22 . Learned counsel has submitted that Custom Notification 98/2009 stipulates in respect of 'resultant products' specified under the sensitive list, whereas DGFT provision para 4.32.2 of HBP only stipulates declaration of technical specification, quality and characteristics of the specified inputs in shipping bills. 23. Per contra, Shri Rawal, learned ASG for respondents No.1 and 2 has drawn our attention to para 10 of the decision of the Bombay High Court in the case of Sevantilal Sons Ors. V/s. Union of India Ors. , LAWS(BOM)-2015-1-124. His contention is that the petitioner No.1 is seeking duty free import under the duty free import authorization whereas, he has not importing the identical goods w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ublic Notices and precedents which we have taken into consideration. 28. In the case in hand, the resultant product is 'Agricultural Tractors' which is not specified under para 4.32.2 of HBP and therefore, the petitioners are not required to correlate the technical specification, quality and characteristics of the imported goods. 29. The Transfer Letter issued by Pushpanjali Floriculture Ltd to Global Exim clearly indicates that transfer of DFIA which is permitted as per the provision of Para 4.2.6 of the FTP-(2009-14). The DFILA licenses are freely transferable and accordingly, the DFIA holder transferred the DFIA to Pushpanjali Floriculture Ltd., who inturn restransferred the said DFIA to Global Exim as per Annxures P/2 and P/3. 30. In any event, insistence of actual use in the export product is contrary to the provision of Para 4.2.6 of Foreign Trade Policy (2009-14). The said para stipulates that once transferability is endorsed, authorization holder may transfer the DFIA or duty free inputs, except fuel and any other items notified by DGFT. 31. The Punjab and Haryana High Court in the case of Pushpanjali Floriculture Ltd. V/s. Union of India ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e extracted, and only such inputs be allowed to be subsequently imported into India. To say the least, such requirement is manifestly absurd, and it's very incorporation, in the impugned Notification and Public Notice, reflective, as the learned Senior Counsel has correctly emphasized, of total non-application of mind, on the part of the authorities issuing the said Notification/Public Notice. 36. The Regional Licensing Authorities after examining the relevant export documents, has endorsed transferability permitting inputs as specified in the said DFIA. Therefore, DFIA transferee is not required to prove, afresh, whether the inputs are actually used in the export product. 37. The Bombay High Court in the case of A.V. Industries Ltd., V/s. UOI, 2007 (187) ELT 9 (Bom) held that :- When the import is in accordance with the import licence issued to the petitioner, the respondents cannot take shelter under the import policy and purport to take action against the petitioner. 38. The ITC (HS) is not a criterion once the DFIA is endorsed with Transferability as held by CESTAT (Mumbai) in the case of USMS Saffron C., Inc V/s. Commissioner of Customs (Export), Mum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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