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13.4. Learned senior counsel asserts that the process of extraction of crude degummed soyabean oil from soyabean amounts to manufacture. In this connection, he has placed reliance on the Central Excise Act, 1944.

13.5. Even otherwise, it is submitted that the Handbook of Procedures (Vol. I) was amended by the DGFT through public notice No. 40/2002-07 dated 28.01.2004 in terms of the powers conferred on him under the EXIM policy of 2002- 2007. By the said notice, para 3.2.5 was inserted which clearly stated that agricultural products under Chapters 1-24 of ITC (HS) were not allowed to be taken into consideration for computation of entitlement under the duty free credit entitlement scheme. Thereafter, DGFT further amended para 3.2.5 by way of public notice No. 42/2004-2009 dated 06.01.2005 whereby DGFT allowed import of items to be covered under the scheme except the items specifically excluded. By way of the said public notice, DGFT allowed the import of all types of edible oil classifiable under Chapter Heading 15 of ITC (HS) classification of export and import items but only through STC and MMTC. In the instant case, appellant had imported the crude degummed soyabean oil on 26.07.2006 through the MMTC. Therefore, on this ground also appellant is entitled to the benefit of the scheme. 13.6. Learned senior counsel also submits that the imported good i.e. crude degummed soyabean oil has clear nexus with the product group exported by the appellant. As per the license under the scheme, the import should have nexus with the product exported. Appellant exported food products like non-basmati rice, sesame seeds, white sugar and soyabean milk extract which are clearly food products having been allotted respective numbers under the Standard Input Output Norms (SION). The good imported is crude degummed soyabean oil which is also a food product and clearly has a nexus with the exported product. This aspect has been dealt with by the Bombay High Court in Essel Mining and Industries Limited Vs. Union of India 1. However, learned senior counsel pointed out that this decision is subject matter of a pending special leave petition before this Court. In fact, this Court vide order dated 08.01.2025 declined the request for tagging of the present appeal with the special leave petition assailing the Bombay High Court judgment in Essel Mining and Industries Limited (supra) as the High Court has held that the same would have no application.

3. In terms of para 3.2.5 of Handbook of Procedures (Volume 1) the following items would not be allowed for imports under duty free credit entitlement certificate for status holders:
a. Agricultural products which fall under Chapters 1-24 of ITC(HS) classification of export and import items.

27. Thereafter, the Department of Commerce issued notification No. 38/(RE-2003)/2002-2007 dated 21.04.2004 inserting Note 7 in paragraph 3.7.2.1 of the EXIM policy 2002-2007 which reads thus:

In terms of para 3.2.5 of the Handbook of Procedures (Vol. I), import of agricultural products listed in Chapter 1 to 24 of ITC (HS) classification of export and import items except the following shall be allowed:
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(i) Garlic, peas and all other vegetables with a duty of more than 30% under Chapter 7 of ITC (HS) classification of export and import items.
(ii) Coconut, areca nut, oranges, lemon, fresh grapes, apple and pears and all other fruits with a duty of more than 30% under Chapter 8 of ITC (HS) classification of export and import items.
(iii) All spices with a duty of more than 30% under Chapter 9 of ITC (HS) classification of export and import items (except cloves).
(iv) Tea, coffee and pepper as per Chapter 9 of ITC (HS) classification of export and import items.
(v) All oil seeds under Chapter 12 of ITC (HS) classification of export and import items.

Further, natural rubber as per Chapter 40 of ITC (HS) classification of export and import items shall also not be allowed for import under the scheme.