DFIA exemption for imported inputs cannot be denied absent separate product naming, actual-use proof, or ITC(HS)/CTH reference.

Under the DFIA scheme, imported goods covered by the description, value and quantity in the authorisation cannot be denied customs exemption merely because the specific product name is not separately stated. The Tribunal held that, for the non-sensitive inputs involved, neither the Foreign Trade Policy nor the customs notification required the licence to mention ITC(HS)/CTH references, proof of actual use in the export product, or correlation of technical specifications, quality or characteristics. It also rejected the objection that import in smaller packs disqualified the benefit, as no such restriction was prescribed. Accordingly, Extra Virgin Olive Oil imported under the transferable DFIA licences qualified for basic customs duty exemption.

---

---

Issues: Whether exemption from basic customs duty under Notification No. 25/2023-Cus dated 01.04.2023 could be denied in respect of imported Extra Virgin Olive Oil on the grounds of mismatch in product description, absence of specific ITC(HS)/CTH reference, alleged lack of actual use in the export product, and import in smaller packs.

Analysis: The imported goods were found to be covered by the DFIA authorisations on a proper reading of the description, value and quantity mentioned therein. The Tribunal held that the DFIA scheme does not require proof of actual use in the export product, and that once the imported goods are within the authorised description, exemption cannot be denied merely because the specific product name is not separately mentioned. It further held that for the inputs in question, neither the Foreign Trade Policy nor the customs notification imposes a requirement that ITC(HS)/CTH numbers must be reflected in the licence, and that no correlation of technical specifications, quality or characteristics was necessary for the non-sensitive inputs involved. The objection based on import in smaller packs was also rejected as no such restriction is prescribed.

Conclusion: The appellant was held entitled to exemption from basic customs duty under Notification No. 25/2023-Cus for import of Extra Virgin Olive Oil under the transferable DFIA licences.

Ratio Decidendi: Under the DFIA scheme, where the imported goods are covered by the description, value and quantity in the authorisation, exemption cannot be denied for want of a separate product name, ITC(HS)/CTH reference, or actual user proof, absent any specific statutory restriction.

---