DFIA transferability and CENVAT certificate condition stayed pending final adjudication under the import authorisation scheme.

A Duty-Free Import Authorisation issued before 1-4-2007, once export obligation was discharged and transferability endorsed, was treated as transferable for the authorisation or the imported raw materials. Customs sought to insist on a Central Excise certificate showing non-availment of CENVAT credit on inputs used in the exported goods, but the appellant relied on the DFIA scheme and Board Circular No. 11/2009-Cus. read with Notification No. 40/2006-Cus. The Tribunal found a prima facie case in the appellant's contention and directed that the impugned condition requiring the certificate should not operate pending final adjudication; the condition was stayed till final disposal of the appeal.

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Issues: Whether, in respect of a Duty-Free Import Authorization issued before 1-4-2007 and transferred after discharge of export obligation, the customs authorities could insist on production of a certificate from Central Excise authorities regarding non-availment of CENVAT credit on inputs used in the exported goods, and whether enforcement of that condition justified stay of the impugned order.

Analysis: The DFIA had been obtained after discharge of the export obligation and endorsement of transferability had also been obtained. On that basis, the appellant was entitled to transfer the authorization or the raw materials imported thereunder. The condition sought to be enforced by the customs authorities would require the appellant to reverse the duty credit foregone on the imported raw materials, and the appellant relied on the Board's clarification under Circular No. 11/2009-Cus. as well as the scheme under Notification No. 40/2006-Cus. The Tribunal found a valid point in the appellant's contention and held that the lower authorities' insistence on the Central Excise certificate should not operate pending final adjudication.

Conclusion: The impugned condition was stayed till final disposal of the appeal, and the stay application was allowed.

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