Transferable DFIA exemption cannot be denied for lack of actual-use proof where authorisation covers the imported goods.

A transferable DFIA covering the description, value and quantity of imported Apple Juice Concentrate entitled the importer to duty-free clearance, and customs could not insist on proof of actual use of the input in the exported product where the exemption notification did not impose that condition. The communication of the Principal Commissioner's decision was treated as an appealable adjudicatory decision, so the appeal was maintainable. The earlier ruling introducing an actual-use requirement was held inapplicable after the later judicial pronouncement quashing that condition. The DFIA benefit was therefore allowed, subject to the required FSSAI clearance.

---

---

Issues: (i) Whether the appeal was maintainable against the communication conveying the Principal Commissioner's decision. (ii) Whether the importer was entitled to duty-free clearance of Apple Juice Concentrate under the transferable DFIA without proving actual use and actual quantity of inputs in the exported product.

Issue (i): Whether the appeal was maintainable against the communication conveying the Principal Commissioner's decision.

Analysis: The communication was treated as conveying the adjudicatory decision reached by the Principal Commissioner in the assessment process. A decision taken by the competent customs authority and communicated to the importer was held to be appealable, and the absence of dispute on this aspect supported maintainability.

Conclusion: The appeal was maintainable.

Issue (ii): Whether the importer was entitled to duty-free clearance of Apple Juice Concentrate under the transferable DFIA without proving actual use and actual quantity of inputs in the exported product.

Analysis: The imported goods were covered by the DFIA description, and the quantity and value were within the authorised limits. Once transferability was endorsed by the licensing authority, customs could not deny the exemption by requiring proof of actual use or actual quantity of inputs in the export product, as the DFIA exemption notification conditioned entitlement on the description, value, and quantity being covered by the authorisation. The ruling that had introduced an actual-use requirement was also held inapplicable in view of the later judicial pronouncement quashing that condition.

Conclusion: The importer was entitled to the DFIA exemption for the imported goods.

Final Conclusion: The denial of DFIA benefit was set aside and the importer was entitled to duty-free import of the goods, subject to the required FSSAI clearance.

Ratio Decidendi: Where a transferable DFIA covers the description, value, and quantity of the imported goods, customs authorities cannot insist on proof of actual use of the input in the exported product unless the exemption notification itself so provides.

---