DFIA import exemption cannot be denied when the licence covers the goods and no import-side end-use restriction is stated.

Exemption under Notification No. 98/2009-Cus depended on whether the imported goods matched the description, value and quantity in the authorization and whether the authorization was produced at clearance. A transferable DFIA licence authorising import of "internal combustion engine complete" could not be denied merely because the export-side SION category differed, as the licence itself imposed no restriction tying the engines to tractors or any other end use. The SION code was not part of the import authorization, and the export category could not be read as an import-side limitation. The denial of exemption was therefore unsustainable, and the engines were eligible for the claimed benefit.

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Issues: Whether internal combustion engines imported under a transferable DFIA licence could be denied exemption on the ground that the licence was originally issued for exports linked to a different SION category.

Analysis: The exemption under Notification No. 98/2009-Cus turns on whether the description, value and quantity of the imported materials are covered by the authorization and whether the authorization is produced at clearance. The authorization specifically permitted import of "internal combustion engine complete" and did not qualify that description by restricting the engines to tractors or any particular end-use. The SION category code did not appear in the authorization itself, and the export-side category could not be read as an import-side restriction. The circulars relied upon also indicated that technical correlation between export products and inputs was not required except in the limited cases expressly covered by the handbook provisions, which were not attracted here.

Conclusion: The denial of exemption was unsustainable, and the import of the internal combustion engines under the transferable DFIA licence was eligible for the claimed benefit in favour of the assessee.

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