Target Plus Scheme broad nexus allows job-worker use and bars Customs from reappraising DGFT authorization.

Under the Target Plus Scheme, broad nexus is satisfied where imported inputs bear a relationship to a product group of the exported goods, and physical incorporation into the exported product is not required. Goods used through a job worker for packing or conversion can meet the scheme conditions if there is no evidence of diversion or sale before use. Customs cannot refuse the scheme benefit by reappraising entitlement already authorised under the DGFT framework; any suspected defect in authorization must be taken up with the DGFT rather than decided afresh by Customs. The scheme benefit was therefore upheld on the stated facts.

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Issues: (i) Whether the imported plastic granules under the Target Plus Scheme had the requisite broad nexus with the exported goods, and whether conversion through job workers for packing purposes satisfied the scheme conditions; (ii) Whether Customs could deny the benefit of the scheme and notification despite valid authorization issued by the DGFT.

Issue (i): Whether the imported plastic granules under the Target Plus Scheme had the requisite broad nexus with the exported goods, and whether conversion through job workers for packing purposes satisfied the scheme conditions.

Analysis: The scheme and the handbook were construed in light of the prevailing judicial interpretation that the broad nexus requirement did not demand physical incorporation of the imported goods in the exported goods. The relevant inquiry was whether the imports had a nexus with any product group of the exported goods and whether the imported inputs were used for the exporter's own use, including through a job worker. The record showed that the granules were used to make plastic bags/packing material for export of rice and spices, and the finding of the adjudicating authority was that there was no evidence of diversion or sale as such before conversion.

Conclusion: The broad nexus requirement was satisfied and the exemption could not be denied on the ground that the imported granules were not physically incorporated in the exported rice and spices.

Issue (ii): Whether Customs could deny the benefit of the scheme and notification despite valid authorization issued by the DGFT.

Analysis: The scheme was administered by the DGFT under the foreign trade policy framework, while Customs operated within its own sphere under the Customs Act and the notification. A valid authorization issued under the scheme could not be disregarded by Customs on a reappraisal of eligibility conditions that fell within the DGFT's domain. The proper course, if any defect in authorization was suspected, was to approach the DGFT for appropriate action. The administrative circular relied on by Revenue could not override the policy framework as interpreted by the higher courts.

Conclusion: Customs could not deny the benefit merely by disputing the DGFT-authorised entitlement, and the challenge to the importer's eligibility failed.

Final Conclusion: The appeal failed on merits, and the exemption granted to the respondent was upheld.

Ratio Decidendi: Under the Target Plus Scheme, broad nexus is satisfied where the imported inputs bear a relationship to a product group of the exported goods, and Customs cannot refuse benefit on a reappraisal of DGFT-granted authorization or insist on physical incorporation of the inputs in the exported product.

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