DFRC licence interpretation: affirmative technical evidence can establish import eligibility despite a non-committal chemist report.

Affirmative technical material supported the view that refined coconut oil could function as an antifoaming and viscosity reducing agent in white sugar manufacture, bringing the import within the DFRC licence description. A Deputy Chief Chemist's inability to find supporting literature was treated as non-conclusive and insufficient to displace expert evidence already on record. The Tribunal also rejected the view that tariff classification outside chapter 29, or the canalised character of the goods, by itself barred licence-based import where the policy permitted such import. The denial of DFRC benefit was therefore unsustainable and the matter was remitted for assessment in accordance with the licence and technical evidence.

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Issues: Whether refined coconut oil imported by the assessee was covered by the DFRC licence as an antifoaming agent or viscosity reducing agent used in the manufacture of white sugar, and whether the lower authorities were justified in denying clearance on the basis of the Deputy Chief Chemist's opinion.

Analysis: The record contained several technical materials, including opinions and certificates from specialised institutions and experts, supporting the use of refined coconut oil as an antifoaming and viscosity reducing agent in sugar manufacture. Those materials had been obtained by Customs or were already before the Department, and were not fresh evidence in the sense treated by the appellate authority. The Deputy Chief Chemist's report was not a positive rebuttal on the issue; it only stated that no literature was available with that office to confirm such use. The Tribunal held that such silence or inability to locate literature could not override affirmative expert material placed on record. It further held that a chemical laboratory opinion is meant to supply test results or composition and cannot, by itself, control classification or deny eligibility under the licence. The reasoning that coconut oil was not a chemical merely because it was classified under a tariff chapter other than chapter 29 was rejected, and the canalised nature of the goods did not defeat licence-based import where the policy permitted import under licence.

Conclusion: The denial of DFRC benefit was unsustainable, and the imported goods were held to be covered by the licence.

Final Conclusion: The orders of the lower authorities were set aside and the matter was remitted for assessment of the bills of entry in accordance with the DFRC licence and the supporting technical evidence.

Ratio Decidendi: Where affirmative technical evidence establishes that imported goods answer the description in the relevant licence or policy, a non-committal laboratory opinion or absence of literature in one office cannot displace that evidence, and licence eligibility cannot be denied on an unreasoned or extraneous basis.

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