Transferable DFIA exemption cannot be curtailed by later circulars imposing fresh actual-use conditions on covered inputs.

A transferee under a valid transferable DFIA is entitled to exemption for inputs covered by the authorization, and the relevant policy and procedure in force on the date of issue govern the licence. Patchouli Oil was treated as falling within the permitted input description of "Essential Oil," and no specific restriction excluded it. A later policy amendment, public notice, or circular could not retrospectively add a fresh actual-use or correlation condition to defeat the original transferable entitlement. Duty-free clearance was therefore available without proof of actual use in the exported product.

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Issues: Whether exemption under the transferable DFIA could be denied on the ground that the importer had not proved actual use of Patchouli Oil in the exported confectionery and had not established a fresh nexus, and whether the subsequent policy amendment and public notice could be applied to DFIA issued before the amendment.

Analysis: The imported goods were found to fall within the permitted input description of "Essential Oil" under the DFIA, and Patchouli Oil was accepted as capable of being used in confectionery. The DFIA did not contain any specific restriction excluding Patchouli Oil, and the relevant policy and procedure in force on the date of issuance governed the authorization. The subsequent notification, public notice, and policy circular could not retrospectively impose a fresh condition requiring the transferee to establish actual use or correlation when such requirement was not part of the original authorization regime. The established line of authority was applied to hold that restrictions or prohibitions cannot be introduced by circulars or public notices so as to whittle down a statutory exemption or a valid transferable licence.

Conclusion: The exemption could not be denied, and the importer was entitled to duty-free clearance under the transferable DFIA without proving actual use in the exported product.

Ratio Decidendi: A transferee under a valid transferable DFIA is entitled to the exemption for inputs covered by the authorization, and a later policy amendment or public notice cannot retrospectively impose a fresh actual-use or correlation condition to defeat that vested entitlement.

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