High Court affirms CESTAT's release of walnuts under DFIA, rejects conditions. Delay not substantial.

The High Court upheld the CESTAT's decision for the unconditional release of 791 bags of in-shell walnuts imported under DFIA, setting aside the conditions imposed by the adjudicating authority. The court found the release justified as the import was consistent with the DFIA scheme and supported by technical opinions. Additionally, the delay of ten months in passing the order was deemed not to raise a substantial question of law. The appeal was dismissed, affirming the Tribunal's discretion in ordering the unconditional release of the seized goods.

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Issues Involved:
1. Whether the CESTAT was right in setting aside the condition imposed by the adjudicating authority for permitting provisional release of the seized in-shell walnuts.
2. Whether the impugned order passed after ten months from the date of conclusion of hearing is justified.

Detailed Analysis:

Issue 1: Setting Aside the Condition for Provisional Release
The appellant, Commissioner of Customs, challenged the CESTAT's order for unconditional release of 791 bags of in-shell walnuts imported by the respondent under DFIA, claiming exemption under Notification No. 98/2009-Cus. The adjudicating authority initially allowed provisional release upon fulfillment of bond and bank guarantee conditions. However, the CESTAT set aside these conditions, directing unconditional release and return of the bond and bank guarantee.

The Tribunal relied on previous decisions, including the Madhya Pradesh High Court in *Global Exim and ors. Vs. The Union of India and ors.* and the Tribunal's decision in *Uni Bourne Food Ingredients LLP Vs. Commissioner of Central Excise Hyderabad-II*. It was noted that in-shell walnuts were allowed to be imported under DFIA for export of assorted confectionery and biscuits under SION E1 and E5, which include dietary fiber.

The Tribunal also considered a technical opinion from the Joint Director, JNCH Lab, stating that walnuts could be used as dietary fiber in the manufacture of biscuits/cookies and confectionery. The appellant did not dispute this opinion but argued that the JNCH Lab lacked expertise in food and nutrition science.

The High Court observed that the respondent's import of in-shell walnuts under DFIA against dietary fiber was consistent with the DFIA scheme and previous judicial decisions. The court emphasized that once the transferability of DFIA is approved, customs authorities cannot impose restrictive conditions on the transferee. It was noted that the same type of walnuts imported under different DFIA descriptions were not liable for confiscation, highlighting inconsistency in the adjudicating authority's approach.

The court concluded that the Tribunal's decision for unconditional release was justified, as the technical opinion supported the respondent's claim and no contrary evidence was presented by the appellant.

Issue 2: Delay in Passing the Order
The appellant argued that the Tribunal's order, passed ten months after the conclusion of the hearing, was unjustified. However, the court noted that there is no statutory limitation under the Customs Act for passing an order within a specific period after the hearing. Therefore, the delay did not raise a substantial question of law.

Conclusion
The court found no substantial question of law in the appellant's claims. It upheld the Tribunal's decision for unconditional release of the seized goods, noting that the Tribunal exercised its discretion appropriately. The appeal was dismissed, and the interim application was declared infructuous.

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