TaxTMI 
TaxTMI 
2014 (8) TMI 358
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....a bona fide transferee sought duty free clearance of Patchouli Oil imported by it. In the list of permissible inputs in DFIA 'natural essential oils' is mentioned. 'Pachouli Oil' being the 'natural essential oil, the appellant sought its duty free clearance against the DFIA referred to above. The fact that Patchouli Oil is an essential oil is not in dispute. The duty free clearance was however denied by putting conditions. Appeal filed by the appellant before Commissioner (Appeals) was dismissed. 2. Following background facts are relevant for deciding the issue:- 2.1 The appellants presented a Bill of Entry No.4257982, dt.03.01.2014 for duty free import of 'Patchouli Oil Light J871', under a Transferable DFIA dated 16.6.2011 permitting duty free import inter- alia of 'Essential Oil'. The exemption in the DFIA was against export product 'Assorted Confectionery', which were already exported by the License Holder and the 'Transferability' was endorsed on the license. According to the appellants, Patchouli Oil is Essential Oil, which is not disputed by the Revenue. 2.2....
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....clic tertiary sesquiterpene, which is not Ethyl Alcohol. (vi) The mandate contained in the Public Notice No. 35 (RE-2013)/2009-2014 dated 30.10.2013, requiring the importer to furnish an undertaking to confirm the actual use of Patchouli Oil in the export product is not applicable to the present case of the appellant since the DFIA in question was issued prior to DGFT Notification No. 31 dated 1/8/2013. (vii) The notification no. 31 amends the Policy from 01.08.2013 and will be applicable prospectively and not to the DFIAs which were issued prior to 01.08.2013. This is so for the reason that as per provisions of Para 4.2.2 (b) of the FTP a DFIA is issued in accordance with Policy and procedure in force on date of issue of authorization. Consequently the right to import inputs which are required for use, without establishing the actual use in the resultant product, which accrued on the date of issue of the DFIA on 16.06.2011 remains protected. 2.4 The Deputy Commissioner Air Cargo Complex, passed an order-in-original dated 09.03.2014 against the appellant by denying exemption. 2.5 The C....
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....to the following technical literature placed on record- I. 'Fenaroli's HANDBOOK of FLAVOR INGREDIENTS Volume I The reported uses of Patchouli Oil in this Handbook are as follows: Reported uses Patchouli Oil Baked goods 2.21 ppm Frozen diary 2.12.ppm Meat products 0.10 ppm Soft candy 2.18 ppm Gelatin, pudding 1.14 ppm Nonalcoholic beverages 1.01 ppm Alcoholic beverages 1.01 ppm Hard candy 758.0 ppm Chewing gum 1137. ppm II. Encyclopedia of common natural ingredients used in food, drugs, and cosmetics: The said encyclopedia inter alia gives the following uses of Patchouli oil- Food. Patchouli oil is extensively used as a flavor ingredient in most major food products, including alcoholic and nonalcoholic beverages, frozen diary deserts, candy, baked goods, gelatins and puddings, and meat and meat products. Use levels reported are generally very low, mostly below 0.0002% (2.21 ppm) III. Perfume and Flavor materials of natural origin The said book gives inter alia the following uses of Patchouli Oil- In flavors, patchouli....
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....sp; 1. DGFT's notification no.31 (RE-2013)/2009-14 dated 01.08.2013 amending the Foreign Trade Policy with effect from 01.08.2013, by insertion of para 4.1.15 in FTP, and amending para 4.2.3 by adding phrase '4.1.14 and 4.1.15' in place of 'and 4.1.14' 2. Notification 48 (RE-2013)/2009-14 dt. 30.10.2013, amending Para 4.1.15 of the Policy by amending para 2 of earlier Notification 31 of 1.8.2013. DGFT Public Notices: DGFT's Public Notice 35 (RE-2013)/2009-14 dated 31.10.2013 - regarding applicability of para 4.1.15 inserted by Notification 31 dt. 1.8.2013 Policy Circulars: 1. Policy Circular no 72 (RE-2008)/2004-09 dated 24.3.2009- 2. The matter was examined in detail and it has been decided to clarify to all concerned that since the objective of SION is to allow duty free import of the inputs which are actually used or are capable of being used in the export product, the exporter has the flexibility to import the alternative input / product mentioned in the SION. 2. Similar Policy Circular 30 (RE-05)/2004-09 dt. 10.10.2005 in DFRC scheme 3. Policy Circular 3 (RE-2013)/ 2009-14 dt. 2.8.2013 concern....
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....s not authorize the Central Government to amend the Export and Import Policy with retrospective effect In exercise of the powers conferred under section 5 of the Foreign Trade (Development and Regulation) Act, 1992, the policy can be amended. However any oppressive amendment to the Policy is applicable only prospectively, as repeatedly held by Courts that the Government has no powers under the section 5 of the FT (D&R) Act, to amend the policy retrospectively. In our view, even in the context of Public Notices, the ratio laid down by the Hon'ble Apex Court in Narendra Udeshi (supra) and Sandur Micro Circuits Ltd (supra) will apply in full force. When we are faced with a situation of choosing between these decisions and the provisions amended after issuance of DFIA read with subsequent Public Notices, the binding precedents of higher judicial fora needs to be given precedence and followed. However, as against the said binding precedents, the Public Notice no. 35 dated 31.10.2013 seeks to apply the Notification no. 31 dated 1.8.2013 retrospectively, to make the conditions applicable, even to the licenses issued prior to the amendment. We are bound by these binding precedents and w....
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....E.L.T. 818 (Tribunal) laying down the said ratio, and on merits dismissed the same appeal filed by the Commissioner of Customs, Calcutta against the same. In Jayant R. Patel v. CC, Hyderabad - 1997 (89) E.L.T. 164, the Tribunal held that the duty free import entitlement are not to be proved again by the exporter or the transferee of license once advance license is granted and vide Commissioner v. Jayant R. Patel - 2003 (155) E.L.T. A68 (S.C.), the Revenues appeal against said judgment was dismissed. In CC, Chennai v. Salem Stainless Steel - 2001 (131) E.L.T. 30 (Mad.), the Hon'ble Madras High Court held that nexus need not be established because the question of nexus would arise only when obligation of the exporter exists and the petitioner as a purchaser of the licenses after discharge of the obligation of export is not required to establish the nexus. The Hon'ble Supreme Court in the matter CC (Imports), Mumbai v. Hico Enterprises - 2008 (228) E.L.T. 161 (S.C.) held that the Customs Department cannot compel the appellant-importer who are the transferee to once again prove that the export obligation has been fulfilled by the original license holder in accordance with the notifica....
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....ted polyester resin, Epoxy Resin, Vinyl Ester Resin, Hydroxy Ethyl Cellulose), Lining Material [Emphasis supplied] 13. It is seen that in the said Para 4.32.2, the obligation of declaration is cast on the exporter to be fulfilled at the time of exports, and also on the Regional Authority to be performed at the time of issuance of DFIA. As per the Policy and Procedure prevailing on the date of issuance of DFIA, no obligation whatsoever has been imposed thereafter on a Transferee Importer, who imports under a Transferrable DFIA / license, except to show broad nexus. We have also noted the CBEC Circular 46/2007-Cus dated 20.12.2007, and find that nothing more can be construed from the same. Further, in the appellant's own case in Commissioner v. Global Exim, 2010(259)A139 (Bombay High Court), it was observed that- 4. According to the Revenue, a co-relation of technical characteristics, quality and specification is required to be established in respect of bearings sought to be imported that the bearings were actually used in the resultant product. 5. The Tribunal did not agree with the submissions made by the Revenue which were pressed into service by Revenue before the Tri....