DFIA eligibility turns on substantive Foreign Trade Policy compliance; later circulars cannot cure a licence issued contrary to scheme conditions.

Eligibility for post-export transferable DFIA depends on compliance with the underlying Foreign Trade Policy conditions, including the substantive requirement of a supporting manufacturer tie-up. A later policy circular that relaxed documentary proof for redemption and transferability did not override those foundational eligibility or validate a licence obtained on a different basis. Where export materials were procured from a trader and the supporting-manufacturer details were furnished only later, the defect was not cured. The authorities were therefore within power to cancel the licence, and the appellate rejection was maintained.

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Issues: Whether the petitioner was entitled to the post-export transferable Duty Free Import Authorisation for export of fabrics despite the absence of a direct tie-up with a supporting manufacturer and despite reliance on the subsequent policy circular and clarificatory letters.

Analysis: The licence was granted under the Foreign Trade Policy on the footing that the scheme conditions in para 4.4.2 had to be satisfied. The petitioner's own case showed that the export materials were procured from a trader and not through a direct manufacturer tie-up, while the supporting-manufacturer details furnished later did not cure the basic defect. The policy circular dated 24.08.2006 only relaxed the requirement of documentary evidence regarding the supporting manufacturer for redemption and transferability; it did not override the foundational policy requirement or validate a licence obtained contrary to the scheme. The authorities therefore acted within the scope of their power under the Act in cancelling the licence and refusing interference in appeal.

Conclusion: The petitioner was not entitled to the DFIA benefit, and the cancellation and appellate rejection were upheld.

Ratio Decidendi: A later policy circular dispensing with documentary proof of the supporting manufacturer cannot override the substantive eligibility conditions of the underlying Foreign Trade Policy, and a licence granted contrary to those conditions is liable to be cancelled.

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