DFIA transferability protects import entitlement once endorsed, and later input-matching restrictions do not defeat the authorisation.

A transferee of a Duty Free Import Authorisation may import the goods covered by the authorisation without proving actual use of those inputs in the export product, where transferability had already been endorsed after fulfilment of export obligation. The earlier Foreign Trade Policy framework allowed the transferee to rely on the authorisation for the permitted goods, description, quantity and value, and later changes introducing a matching requirement for inputs actually used were held inapplicable to such a transferee. The restriction could not be invoked to deny DFIA benefit once transferability had crystallised and the imports fell within the authorised terms.

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Issues: Whether a transferee of a Duty Free Import Authorisation was entitled to import the goods covered by the authorisation without proving actual use of the imported goods in the export product, and whether the later policy amendment and connected notifications could be applied to deny that benefit.

Analysis: The earlier Division Bench decisions were treated as concluding the controversy. The Foreign Trade Policy recognised transferability of DFIA after fulfilment of export obligation, and once transferability was endorsed, the transferee could rely on the authorisation for the goods, description, quantity and value permitted therein. The later insertion of paragraph 4.1.15 and the connected public notice and notifications, which required matching of inputs actually used in the export product, were held inapplicable to a transferee after endorsement of transferability. The Court also noted that the impugned restriction could not be used to deny the benefit where the authorisation had already become transferable and the goods fell within the permitted description and value.

Conclusion: The transferee was entitled to the DFIA benefit without establishing actual use in the export product, and the writ petition succeeded in terms of the earlier binding law.

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