Transferable DFIA exemption depends on the policy in force at issue, not later restrictive DGFT instructions.

A transferable DFIA must be assessed under the policy and procedure in force on the date of issue. Where the authorisation was issued before later DGFT notifications and had already been validly transferred after fulfilment of export obligation, customs authorities could not apply the later restrictive requirements retrospectively. For a specific input covered by the DFIA, the transferee was not required to prove afresh actual consumption or the exact quantity used in the export product, because the nexus had already been settled through the licence and export authorisation process. The DFIA exemption therefore could not be denied on the basis of later instructions.

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Issues: Whether a transferee of a Duty Free Import Authorisation was required to prove actual use and actual quantity of the imported input in the export product, and whether later DGFT notifications and public notices could be applied to deny exemption in respect of a DFIA issued earlier.

Analysis: The DFIA had been issued before the later DGFT notification and public notice, and the authorisation had already been transferred by the licensing authority after fulfilment of export obligation. The input in question was a specific entry in the DFIA and the authorisation was governed by the policy and procedure in force on the date of issue. The later requirements concerning declaration of actual inputs and quantity were directed at generic or alternative entries and could not be applied retrospectively to an earlier transferable DFIA. Once the licence stood transferred, the transferee could not be compelled to establish afresh the nexus between the imported material and the export product, as that burden had already been settled by the licence and the export authorisation process.

Conclusion: The transferee was not required to prove actual consumption of the input in the export product, and the later DGFT notifications could not be used to deny the DFIA exemption.

Ratio Decidendi: A transferable DFIA must be assessed according to the policy and procedure in force on the date of issue, and once the licence is transferred for a specific covered input, the customs authorities cannot insist on fresh proof of actual use or apply later restrictive instructions retrospectively.

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