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of <h1>Tribunal Grants DFIA Benefits for Inshell Walnuts Import; Overturns Revenue's Denial and Customs Duty Demand.</h1> <h3>VKC NUTS PVT LTD Versus C.C. -JAMNAGAR (PREV)</h3> VKC NUTS PVT LTD Versus C.C. -JAMNAGAR (PREV) - TMI Issues Involved:1. Maintainability of the appeal.2. Entitlement to DFIA benefit for the import of Inshell Walnuts under the description of Fruit/Food Flavour/Dietary Fibre against the export of Biscuits.Issue-wise Detailed Analysis:1. Maintainability of the Appeal:The appellant contended that the appeal is maintainable under Section 129(1) of the Customs Act, 1962, as the final decision was taken by the Principal Commissioner of Customs and communicated by the Joint Commissioner of Customs. The Tribunal agreed, referencing judgments such as *Sterlite Optical Technologies Vs. Commissioner of Customs* and *Unibourne Food Ingredients LLP vs Commissioner of Customs*, establishing that appeals against decisions by higher authorities communicated by lower officers are maintainable. The Tribunal rejected the revenue's argument that the appeal is premature and not maintainable, confirming that the Commissioner’s decision to reject the DFIA benefits and demand customs duty was final and appealable.2. Entitlement to DFIA Benefit:a. Description and Classification of Goods:The Tribunal found that the DFIA licenses were issued against the export of Biscuits as per SION E-5, which does not prescribe ITC (HS) numbers. The appellant argued that Inshell Walnuts fall under the description of Fruit/Flavour/Dietary Fibre as per the DFIA and SION norms. The Tribunal agreed, referencing the case of *USMS Saffron Co. vs Commissioner of Customs*, which held that ITC (HS) numbers are not a criterion for DFIA benefits as long as the items fall under the described goods.b. Technical Opinions and Expert Evidence:The Tribunal considered various technical opinions and expert evidence, including those from IIT Kharagpur and JNCH Lab, which confirmed that Walnuts could be used as dietary fibre and flavour in the manufacture of biscuits. The Tribunal emphasized that such expert opinions cannot be disregarded without contrary evidence, which the revenue failed to provide.c. Actual User Condition:The Tribunal referred to the judgment in *Shah Nanji Nagsi Exports Pvt. Ltd. vs Union of India*, which clarified that the DFIA scheme is a post-export scheme with no actual user condition, meaning the imported goods need not be used in the manufacture of export goods. The Tribunal confirmed that Inshell Walnuts, being capable of use in biscuit manufacturing, are eligible for DFIA benefits.d. Board Circulars and Policy Flexibility:The Tribunal noted that Board Circulars, such as Circular No. 46 of 2007 and Policy Circular No. 72/2008, allow flexibility for importing alternative inputs under the DFIA scheme. It emphasized that these circulars are binding on customs authorities and support the appellant’s claim for DFIA benefits.Conclusion:The Tribunal concluded that the appellant is entitled to DFIA benefits for the import of Inshell Walnuts under the description of Fruit/Flavour/Dietary Fibre against the export of Biscuits. The appeal was allowed, and the decision of the revenue to reject the DFIA benefits was set aside.
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