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2. Brief facts of the case are that the appellants imported 116 kgs. of Inshell Walnut under transferable DFIA no. 0310709650 dated 18/09/2012 issued against export of biscuits as per standard input output norms E-5. The aforesaid DFIA was issued in terms of chapter 4 of the Foreign Trade Policy (2009-14) and in particular para 4.2.1 and 4.2.2 thereof. The said DFIA was transferred by the Regional Licensing Authority after discharge of export obligation by the exporter in terms of 2 C/10662/2019 provision of para 4.36A of HBP- (2009-14). Upon transferability, the inputs mentioned n the DFIA are made freely transferable by the Regional Licensing Authority within the quantity and overall CIF value mentioned in the DFIA in accordance with the policy and procedure in force on the date of issue of authorization in terms of para 4.2.2 (b) of FTP (2009-14). Under the DFIA scheme, the goods are exempted in Custom Notification No. 98/2009-Cus dated 11/09/2019 from the whole of Customs duty foregone leviable thereon which is specified in the first schedule of Custom Tariff Act, 1975.

The appellant claimed exemption on the strength of provisions of Foreign Trade Policy (2009-14) read with notification 98/09-Cus dated 11/09/2009 by filing Bills of Entry no. 9112328 dated 04.03.2008 for the imported goods of walnuts covered under the definition of Relevant Food Flavour/Flavouring agent/Flavour improvers- (Serial No. 6) Fruit/Cocoa Powder-under Seral no. 10 and Dietary Fibre under Serial no. 11 of the list of goods mentioned in DFIA. After examining the relevant import documents, the assessing officer sought a clarification from the appellant vide query memo dated 05/12/2018 seeking clarification on the claim of appellant‟s that Walnut comes under S. No. 6,10,11 of license. The appellant vide letter dated 05/12/2018 made a detailed submission to Deputy Commissioner of Customs, ACC, Ahmedabad by producing technical reference books which evidently states that Walnuts, is covered under the description of Fruit/Flavour and Dietary Fibre. In response to the said reply, the assessing officer with approval of Dy. Commissioner informed the appellant that query dated 11.12.2018 to justify value of the imported goods, DFIA License not tallied with item description of the imported goods, submit the FSSAI and P.Q. report. The appellant in response reiterated the earlier submission and made further submission vide letter dated 007/12/2018 and requested Dy. Commissioner of Customs to extend the DFIA benefit as per Custom Notification no. 98/09-Cus dated 11/09/2009. The department did not accept the contention of the appellant and once again informed vide letter dated 11/12/2018 that the appellant have imported Walnut which was not tallying with the DFIA license. The appellant, thereafter, submitted a letter dated 17/12/2018 informed the Dy. Commissioner of Customs that applicable duty is being paid under protest reserving the appellant‟s right for any appeals. Since the said Bills of entry no. 9112328 dated 04/12/2018 was not finally assessed, the appellant produced another alternate transferable DFIA no. 0310825085 dated 16/11/2018 vide letter dated 19/01/2019. The DFIA exemption is granted in terms of Custom Notification no. 19/15-Cus. Dated 01/04/2015.The appellant thereafter find that the Dy. Commissioner is not inclined to accept the fresh transferable DFIA no. 0310825085 dated 16/11/2018 forwarded the said same to the Dy. Commissioner of Customs through Registered post. Thereafter, the appellant paid the applicable custom duty 3 C/10662/2019 under protest after final assessment of Bills of Entry no 9112328 dated 04/12/2018.

We however find that the authorities below have sought to deny the benefit of duty free import of inshell walnut against the DFIA issued for export of biscuit on the ground that CTH mentioned in the Annexure -A to DFIA are different from the CTH mentioned in the BE.

In our view, the issue raised in the above appeal is also covered by the order by the Hon‟ble Bombay High Court in the case of USMS Saffron Co. Inc reported in 2016(331) ELT 155. The appellate tribunal held that ITC (HS) mentioned in the DFIA is not a criterion to get the benefit under FTP and Custom provisions as long as the items imported falls under the description of the goods mentioned in the DFIA. In that case, the appellate tribunal held that the imported saffron is covered by the description food flavour mentioned in the DFIA irrespective of ITC (HS) mentioned in the DFIA. We also find that Hon‟ble Bombay High Court in the case of USMS Saffron (supra) upheld the order of the appellate tribunal holding saffron can be imported as food flavour without payment of duty against DFIA issued for export of biscuits.

6 C/10662/2019 In view of the judgment of the Hon‟ble Bombay High Court, it is beyond doubt that the actual use of the imported items in the manufacture of export goods is not a pre-condition to grant exemption under the DFIA. The Hon‟ble High Court has extensively dealt with the scheme of DFIA for reaching the above conclusion.

In our view once the imported goods satisfy the description given in the SION and reproduced in the DFIA, they are clearly entitled to claim benefit without payment of duty on the strength of the valid DFIA irrespective of ITC (HS) No. mentioned in the DFIA. Interestingly, SION does not refer to ITC (HS) Codes and only the description and quantity of the goods allowed to be imported are mentioned .