DFIA exemption coverage extends to goods described in the authorisation without a separate ITC (HS) code.

For a transferable DFIA exemption, imported goods may qualify where they are covered by the authorisation's description, value and quantity, even if a separate ITC (HS) code is not shown. The analysis states that vital wheat gluten flour was treated as falling within the DFIA description of wheat flour issued against biscuit exports under SION E-5, and that Notification No. 19/2015-Customs and the FTP did not require additional code-based correlation on those facts. The general actual-use and proportional-correlation conditions were held inapplicable because the inputs were specific, not generic or alternative entries. The exemption claim was therefore upheld and rejection was set aside.

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Issues: Whether the import of vital wheat gluten flour was entitled to DFIA exemption as being covered by the description of wheat flour in the transferable DFIA and whether absence of the ITC (HS) number or further correlation proof defeated the claim under the notification and FTP.

Analysis: The DFIA was issued against export of biscuits under SION E-5 and was transferable under the Foreign Trade Policy 2015-2020. The record showed that wheat flour and wheat gluten flour were mentioned in the DFIA, and the dispute turned only on the department's insistence that the ITC (HS) code for wheat gluten was not separately shown. The applicable framework under Notification No. 19/2015-Customs and the Foreign Trade Policy did not require a separate ITC (HS) code where the imported goods were otherwise covered by the description, value and quantity in the DFIA. The conditions in paragraphs 4.12(i) and 4.12(ii) were held inapplicable because the inputs were specific and not generic or alternative entries requiring proportionate correlation. The materials cited by the Tribunal and the departmental circulars supported the view that wheat gluten was covered within the description of wheat flour and that no further actual-use correlation was required on these facts.

Conclusion: The imported wheat gluten flour was held to be covered by the DFIA description of wheat flour, and denial of the exemption on the ground of absence of a separate ITC (HS) code was not justified.

Final Conclusion: The exemption claim was upheld and the impugned rejection was set aside in favour of the importer.

Ratio Decidendi: For a transferable DFIA exemption, if the imported goods are covered by the description, value and quantity in the authorisation, a separate ITC (HS) code is not indispensable and the general actual-use or proportional-correlation conditions do not apply to specific inputs not treated as generic or alternative entries.

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