Indian Kanoon - Search engine for Indian Law

1. Shri Ishwar Singh, learned J.D.R. appearing for Revenue states that this is an appeal filed against the order-in-appeal, dated 4-7-1997 passed by the Commissioner of Customs (Appeals), Mumbai. He further states that the appeal has been filed on the following grounds :

"Under para 47 of the Exim Policy, inputs required for manufacture of export product may be allowed to be imported duty free against an advance licence under the Duty Exemption Scheme. Exempted materials allowed to be imported duty free under Notification No. 80/95-Cus., dated 31-3-1995 as amended from time to time are defined as "raw materials, component, intermediates, consumables, computer software and parts required for manufacture of export product. Therefore, the concept of nexus between inputs used in the export production and the imported items is inherent in the Notification and the Duty Exemption Scheme.

9. Keeping in view the basic features of the DEEC Scheme as explained above and also the specific provision contained in the customs duty exemption Notification No. 80/95-Cus., dated 31-3-1995, we have no doubt in our mind that since imported product in this case has no nexus as per the detailed finding of the adjudicating Additional Commissioner with the export product, the same cannot be given the customs duty exemption. The terms of the notification also makes it clear that the exemption is restricted to 'materials' which has been defined to mean 'raw materials, component, intermediate, consumable, computer software and parts required for manufacture of export products.' If a material has no nexus with the export product, the same cannot be considered to be required for manufacture of the export product nor can it be granted the duty exemption under the said notification. We are, however, of the view that so long as the licence issued by the DGFT covers the imported goods, even in generic term, import of the same have to be allowed without confiscation and penal action. In other words, while imports under such transferred licence where the imported goods conform to the description given in the transferred licence will have to be allowed without confiscation and penalty, so long as the goods have no nexus to the export product, the same have to be denied duty exemption under the relevant customs notification.