Document Fragment View

Matching Fragments

1. This is an appeal filed by the Commissioner of Customs under section 130 of the Customs Act, 1962 challenging an Order No.A/85730/2020 dated 11th September, 2020 passed in Appeal No.86973 of 2019 filed by VKC Nuts Private Limited, the respondent herein.

2. The relevant facts are that the respondent company inter alia had imported 791 bags of in-shell walnut under Bill of Entry No.9878513 dated 31st January, 2019 and claimed exemption under Notification No.98 of 2009- Cus dated 11th September, 2009 on the strength of the Duty Free Import Authorization (DFIA) Nos.0310704333 and 0310740591 against import Priya Soparkar 2 14 cuapp 6-21 with ial 16390-21-os item of "dietary fibre" under Standard Input Output Norms (SION) E5. The said goods statedly were allowed to be cleared without payment of duty by debiting the DFIA scrip.

34. On a plain reading of para 4.1.15 abundantly makes it clear that the provisions has no application after the discharge of export obligation and endorsement of transferability. It can be applicable only when the DFIA holder import first and use in the resultant product for export. There is no provision of redemption of DFIA License after the discharge of export obligation. Once the import goods are covered under the Priya Soparkar 10 14 cuapp 6-21 with ial 16390-21-os description, quantity as mentioned within the overall CIF value allowed in the DFIA, (as amended upon competition of export), there is no necessity to satisfy the requirements of Para 4.1.15 of FTP. It is impossible to comply the condition which states that those inputs which are actually used in export product for availing DFIA exemption.

22. Paragraphs No. 39, 40, 41 and 42 are relevant and are quoted as under

:-
"39. The petitioner is a bona-fide transferee of the said transferable DFIA cannot be denied exemption from payment of duties on the goods on the ground that only those actually used as inputs in the export product shall only be permitted for import which is applicable to a DFIA holder. Once the DFIA is made transferable by the licensing authorities, the Petitioner is not bound to show the actual use of the imported goods in the export product and is free to import any goods covered under the description and quantity mentioned within the overall CIF value allowed in the DFIA, (as amended upon competition of export), there is no necessity to satisfy the requirements of para 4.1.15 of FTP- (2009-14).

24. It is also not in dispute that as per law settled by this court in the case of Shah Nanji Napsi Exports Private Limited Vs. Union of India and DGFT, it has been held that the DFIA scheme does not lay down actual user condition and hence the subject in-shell walnuts were allowed to be imported under DFIA scrips.

25. We also note from the communication dated 28 th June, 2019 referred to above, it is not disputed that in addition to subject import of 791 bags of in-shell walnuts imported under DFIA scrip against import item "dietary fibre" which were seized at Hemkunt Agro Care Private Limited for alleged violation of the said notification and held liable for confiscation under Priya Soparkar 13 14 cuapp 6-21 with ial 16390-21-os section 111(o) of the Customs Act is the same communication by which 794 bags of the said goods viz. In-shell walnuts were imported under DFIA scrip against the import items of other confectionery ingredients, nut and nut products which were earlier seized from M/s Rishi Ice and Cold Storage were held not liable for confiscation and their seizure was vacated for a similar import of in-shell walnuts permitting provisional release of both sets of in- shell walnuts irrespective of whether the same were liable to confiscation or not under the same order of provisional release subject to bond/bank guarantee and undertaking has been passed, which in our view is arbitrary.