TMI Blog2020 (12) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal is maintainable and not premature. Merits of the case - HELD THAT:- In the present case, the DFIAs produced by the appellant are post export entitlements. The DFIA s are issued for import of wheat flour against Export of Biscuits as per SION E5. As per the provision of Para 4.27 (ii) of FTP- 2015-20, DFIA is issued for products for which Standard Input output Norms are notified - It is settled law that a DFIA is governed by SION which is notified for the relevant export product. There is no provision either in the Policy or in the Hand book to say that DFIA benefits can be claimed on the basis of ITC (HS) numbers. Even SION does not prescribe any ITC (HS) Numbers. Under post transferability DFIA s, there is no actual user condition exists in the DFIA license issued under Custom Notification No. 19/2015-cus dated 01.04.2015. The issue is squarely covered by the Hon ble Bombay High Court (Nagpur Bench) in SHAH NANJI NAGSI EXPORTS PVT. LTD. VERSUS UNION OF INDIA, MINISTRY OF COMMERCE INDUSTRY, DIRECTORATE GENERAL OF FOREIGN TRADE AND JOINT DIRECTOR GENERAL OF FOREIGN TRADE [ 2019 (4) TMI 146 - BOMBAY HIGH COURT ] In the said judgement it was held that so long as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... post amendment of SION E-5 amending Serial No.1 of the product description Wheat Flour (11010000) vide Public Notice No. 41 dated 02.11.2016. 1.1 The brief facts of the case are that the appellant imported Wheat Gluten and claimed DFIA benefits on the strength of Two Transferable Duty Free Import Authorisations (DFIA) Nos. 0310863589 dated 09.06,2020 originally issued to R.K.Bakewell Mars Pvt. Ltd and DFIA No. 0310833517 dated 19.03.2020 originally issued to Krish Food Industry (India) by the Office of the Director General of Foreign Trade under the Foreign Trade Policy for the period (2015-2020) against export of Biscuits from the open market. 2. The aforementioned DFIAs are post export entitlements issued against Export of Biscuits as per SION E-5 and are freely transferable. 3. The appellant claimed duty free exemption for their import consignment of Wheat Gluten (ITC(HS) 11090000) against product description - (Wheat Flour). 4. The assessing officer raised a query and sought explanation from the appellant. It was mentioned that in respect of inputs referred in Para 4.12 (i) and (ii) of FTP-2015-20, the material permitted to be imported shall be of speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Customs (Sea), Chennai-V 2019 (368) ELT 1089 (4) S.S. Offshore Pvt. Ltd. 2018 (361) ELT 51 (Bom.) 7.1 He submits that in view of the above judgments it is settled position that against any decision taken by the Commissioner and communicated by the lower officer to the assessee, the appeal lies before the Tribunal. He further submits that as regard the case law in the case of Commissioner of Customs and Central Excise Vs M.P. Steel Corporation- 2003 (154) ELT 12 (SC), the same has no application in the present case. The said case relates to some internal correspondences between the Superintendent and Collector wherein the Collector took a policy decision on the question of how LDT was to be calculated. Whereas in the instant case, a clear decision was taken by the Principal Commissioner of Customs (Preventive) which was merely conveyed by the Joint Commissioner of Customs (Preventive). He further submits that the case law of M/s Piramal vs. Commissioner of Central Excise, Chennai vide Final Order no. A/40550/2017 dated 30.03.2017 has also no application as in the said case the assessee approached Hon ble Tribunal against a rejection letter for extending warehouse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that DGFT clarifications on licensing matters are final and binding on all including customs authorities. In this regard he placed reliance on the judgment of Hon ble Tribunal (Bangalore) in the case of Commissioner of Customs, Hyderabad Vs. Goel Enterprises reported in 2005 (179) ELT 509 (Tri-Bang). He further submits that institute of Chemical Technological, Mumbai and IIT Kharagpur in their technical opinions has clarified that wheat gluten flour or vital wheat gluten can be used as a flour in combination with other flour (rye flour, soya flour, all-purpose flour in parts) for bread and biscuits, which are rich in protein content and required texture. The said expert opinion given by technically qualified person from a reputed institute like IIT Kharagpur cannot be brushed aside unless such technical opinion is disbelieved by specific and cogent evidence. On this issue he placed reliance on the following judgments:- Inter-Continental (INDIA) VS UNION OF INDIA ,Reported in 2003 (154) ELT 0037(GUJ) Hon ble Apellate Tribunal,Mumbai vide final order No.A/8567285676/2020 dated 11.06.2020. 8.1 He submits that in the above judgment the tribunal Mumbai has accepte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of para 4.27 (iv) of FTP-2015-2020, it is interalia stipulated that no DFIA shall be issued for an input which is subject to pre import condition or where SION specifies actual user condition. Therefore licensing authority has correctly issued the DFIA without condition of actual user in the list of inputs, since the relevant SION E5 has not stipulated Actual User condition in any of the inputs. 8.5 It is his submission that the imported goods Wheat Gluten or Wheat Flour are not specified under sensitive items under para4.30 of FTP- (20152020 )of DFIA s .Therefore, the exporter is not required to give a declaration of the technical specification ,quantity and characteristics of inputs used in the resultant product. The Central Board of Excise Customs vide circular no. 46 of 2007 had earlier clarified the above provisions which existed under the previous policy period under para 4.55.3 of HBP. He submits that the board circulars are binding on Customs authorities as held by Hon ble Gujarat High Court in the case of F.S. Enterprise vs State of Gujarat 2020 (32) GSTL 321. 8.6 It is his submission that as per policy circular no. 72/2008 dated 24/03/2009 flexibility has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Tribunal. He further submits that as per the relevant para of letter dated 30.09.2020 with the approval of the Principal Commissioner, it was opined that the query raised by the department is just and proper and at the same time it was guided to ascertain practice being followed at other zones/Commissionerate. Therefore, the assessing authority is still free to decide on merit. Therefore, the opinion given in letter dated 30.09.2020, is not conclusive. Hence, appeal against said order does not lie before this Tribunal. 9.1 He submits that appellant s reliance in this regard on case law of Sterlite Optical Technologies vs Commissioner of Customs (Exports), ACC, Mumbai-2008 (226) ELT 0069, is misplaced as there issue involved in that case was conversion of shipping bills to drawback shipping bills which is not the case here. Similarly, the case of Swiber Offshore Construction Pvt. Ltd. vs Commissioner of Customs, Kandla is also not applicable as the issue involved in that case is denial of cross examination by the Adjudicating Authority. He submits that the present appeal challenging the letter of Joint Commissioner before the Tribunal is not maintainable. He placed relian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Import Authorisation in terms of paragraph 4.25 and 4.27 of the Foreign Trade Policy under Notification No. 19/2015 dated 01.04.2015. The Central Government vide Notification 21/2015-2020 dated 05/12/2019, has notified the revised Foreign Trade Policy, 2015-2020 effective w.e.f. 05.12.2017. In the revised Foreign Trade Policy, para 4.29 (iv) and (v) have been inserted. As per the said amendment in FTP, it is clearly spelled out that only specific inputs along with quantity will be permitted to be imported under DFIA scheme. He submits that the original exporter has to file the prescribed Annexure ANF4H, wherein the details of export items as well import items alongwith its Customs Tariff item no. (CTI) are required to be mentioned and based on these information, DGFT issues License with list of import items and export items along with Custom Tariff Item No. Therefore, the subsequent purchaser has no right to change the import items which is totally a different item. In this regard, he relies upon the judgment of Mumbai Tribunal in the case of Mumbai (Export Promotion) vs Global Exim dated 26.02.2020. He submits that as per the common parlance test, Wheat Gluten having classific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FT. Therefore, the benefit of notification cannot be extended in the light of the Hon ble Supreme Court judgment in the case of Commissioner of Customs (Import), Mumbai vs. Dilip Kumar ad Company 2018 (361) ELT 577 (S.C) as the notification should be interpreted strictly. 9.9 He submitted that in SION norms, there is General Notes for all Export Products Groups which is applicable to all importers irrespective of DFIA license/ Advance Authorization/ DFRC etc. The DFIA in the present case was obtained by declaring the inputs as Wheat Flour ITC 11010000 in the resultant export product. Therefore, the subsequent purchaser has no right to import Wheat Gluten having Custom Tariff Classification 11090000 . 9.10 He further submits that the judgment relied upon by the appellant are not applicable to the present case as the facts of those cases were different. In view of above submission, he prayed the appeal may be dismissed as non-maintainable, pre-mature and devoid of any merits. 10. We have heard both the sides and perused the records. As regard preliminary issue of maintainability of appeal before this Tribunal, we find that the decision against which this appeal was fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ription of goods in the DFIA. 11. The DGFT in Meeting No. 16/85 ALC 3/2013 dated 31.10.2013 has clarified that Vital Wheat Gluten/Gluten Flour is used in the manufacturing of biscuits or protein enrich biscuits and further stated that the representative of Ministry of Food Processing Industry (MFPI) has clarified that wheat gluten Amygluten 160 is also a type of Wheat Gluten Flour . 11.1 We agree with the proposition that the DGFT clarifications on licensing matters are final and binding on all including customs authorities. The Hon ble Appellate Tribunal (Bangalore) in the case of Commissioner of Customs, Hyderabad Vs. Goel Enterprises reported in 2005 (179) ELT 509 (Tri-Bang) held that once licensing authority (DGFT) clarified the issue the said clarification is binding on customs authorities. 11.2 The Institute of Chemical Technology, Mumbai and IIT, Kharagpur in their technical opinions has clarified that wheat gluten flour or vital wheat gluten can be used as a functional flour in combination with other flour (rye flour, soya flour, all-purpose flour in parts) for bread and biscuits, which are rich in protein content and required texture. 11.3 It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by the Hon ble Bombay High Court (Nagpur Bench) in its order and judgement dated 29.03.2019 , reported in 2019 (367) ELT 335 (Bom) . In the said judgement it was held that so long as the export goods and the import items corresponds to the description given in the SION, it cannot be held to be invalid by adding something else which is not in the policy. The relevant portion of the judgment is reproduced hereunder; 15 . The controversy revolves around the question, whether petitioner can be allowed to import maize popcorn against DFIA licence for export of starch powder under SION entry No. E75 when admittedly imported popcorn is not used to manufacture export product namely maize starch powder. Petitioner s Learned Counsel conceded that the imported maize popcorn is not used for manufacturing the export goods namely maize starch powder. According to him, there is no such actual user condition as well as the DFIA is transferable. 16 . The petitioner sought clearance of popcorn against DFIA licence issued for export of starch powder as per entry at serial No. E75 of SION. Apparently the norms (E-75) do not refer to any particular category of maize and it is petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at it is not permissible for respondents to interprate policy condition. In this regard, reliance is placed on reported case of the Commissioner of Customs (Export) v. M/s. USMS Saffron Co. Inc. - 2016 (344) E.L.T. 161 (Bom.). In said case, it is observed that if a particular Authorization does not contain any entry for restricting the item (Saffron), then, by an inferential process and when the Licensing Authority did not think it proper to insert it, it will not be permissible to read it in the same. It conveys that in absence of statutory restriction, by inference scope of entry cannot be restricted. 20 . The respondents contended that the petitioner has imported popcorn, in gross violation of para 4.12(i) of the FTP, 2015-20 which mandates that whenever SION permits use of generic inputs (maize in this case), the name of specific inputs (popcorn maize) should be endorsed in the relevant shipping bills and the relevant bills of entry. According to respondents maize is generic term used in SION E75 and therefore non-mentioning of specific input violates the above term, and consequently disentitles authorisation. 21 . On the other hand, petitioner vehemently ur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing bill by the exporter to be authenticated by Customs. For example, if the input allowed in the norms is relevant fabrics , only the specific types of fabric i.e. polyester or nylon etc. used in the export product shall be allowed. Similarly, if the norms provide for import of BOPP film against export of self adhesive tape, only BOPP film required for manufacture of Self Adhesive Tape will be allowed and not those, which are required as packing material. Bare Perusal of Note 1 indicates that, there is no actual user condition but the input must be capable for use of export product. In absence of any specific word, the only requirement appears to be of capability of the input product to manufacture the export goods and no necessity to actually use the same. The plain reading of note-1 nowhere conveys that there is actual user condition. 24 . The statute should be read as a whole, in its context and scheme, to discover what each clause or word is meant and designed under the scheme. Interpretation of words and clauses must depend on the text and the context. There was no difficulty for the framers of the scheme to specifically lay down that the import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to the date of issuance of licence meaning thereby it has no retrospective effect. In that light on the basis of circular entitlement cannot be denied. 27 . As per SION export item at Serial No. E-75 is maize starch powder against which exporter is permitted to import maize without putting any condition or restriction as regards to variety, quality or characteristic in the said entry. Moreover, there is no such corresponding condition in licence. In its absence, any addition of words cannot be imported to change the equation. Precisely, import of popcorn maize is not excluded from the scope of term maize . We may reproduced one of the licence details as under :- 28 . The petitioner has imported maize which is capable of being used in the manufacturing of export goods namely maize starch powder. There is no actual user condition so as to restrict right of petitioner to import maize. So long as the export goods and the import item corresponds to the description given in the SION, it cannot be held to be invalid by adding something else which is not in the policy. 29 . In conclusion, we hold that petitioner is entitled to import popcorn ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble court in Shah Nanji Nagsi Exports Pvt Ltd(Supra) have categorically considered the amended provision of DFIA under Foreign Trade Policy 2015-20 and taken a view that if the input is covered under the description given and even if the input is not used actually in the export product the benefit of DFIA should be extended therefore, all the issues raised by the revenue in the present case have been elaborately dealt with by the Hon ble Mumbai High Court at Nagpur Bench. 16. We, as per Principles of judicial discipline, cannot deviate from the ruling made by the Hon ble High court. Accordingly, the appellant is entitle for DFIA Scheme in respect of import of Wheat Gluten which is part of wheat flour. 17. There is no Actual user condition mentioned against any of the inputs mentioned in the aforementioned DFIA s. 18. The DGFT vide PN 41 dated 02.11.2016 has amended SION E-5 by amending the description of goods against Serial No. 1 as Wheat Flour (11010000). 19. The DFIA s contains two Annexures A B . While Annexure A contains list of input items for the Exports made prior to 02.11.2016 Annexure B contains list of input items for the Exports made ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
