TaxTMI 
TaxTMI 
2020 (12) TMI 326
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....of Biscuits from the open market. 2.1. The assessing officer raised a query and sought explanation from the appellant that in respect of inputs referred in para 4.12(i) and (ii) of FTP-2015-20, the material permitted to be imported shall be of specific name/description or quantity which is actually used in the export product and should be mentioned in the relevant Shipping Bills. Further it was mentioned that the appellant cannot seek exemption of single input item, inshell walnut under three different product descriptions viz., Fruit/Flavour/Dietary Fibre. 3. The appellant replied to the said query in detail. However, the revenue rejected the claim on the ground that the appellant has not produced evidence to show that Inshell Walnut is actually used in export product. According to the revenue, only those inputs which are actually used in export product shall be allowed exemption from payment of customs duty in terms of Custom Notification No. 19/2015-cus. The import goods Inshell Walnut is not mentioned in the DFIA against input item description 'Fruit /Food Flavour/Dietary Fibre". 3.1. The above decision of the revenue was taken by the Principal Commis....
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....ssioner of Customs (Preventive). He further submits that the case law of M/s Piramal vs. Commissioner of Central Excise, Chennai vide Final Order no. A/40550/2017 dated 30.03.2017 has also no application as in the said case the assessee approached Hon'ble Tribunal against a rejection letter for extending warehouse period. He submits that the contention that the assessing officer is under no legal obligation to follow the decision of higher authorities while discharging the quasi judicial powers vested in the Act is wholly misplaced. The query has been raised at the time of assessment of Bills of Entry. The superior authority i.e. the Principal Commissioner of Customs (Preventive) has denied the duty benefit under DFIA Licenses and has conveyed the same through Joint Commissioner of Customs (Preventive). The Principal Commissioner of Customs (Preventive) has also directed the appellant to pay applicable customs duty for clearance of goods. He further submits that Revenue has relied upon several case laws on the question of whether it is binding on the assessing officer which was cited below: • Madras Steel Re-Rollers Association vs UOI 2017 (217) ELT 167 (Mad) ....
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....ook of Perfumes and Flavours, walnut is mentioned as a food flavour. As per the Technical opinion given by the Associated professor, IIT Kharagpur, it amply demonstrates the use of Walnuts as fruit/ nut of bake shop can be used a food flavour as well as substitute for protein and dietary fibre (in appropriate proportion) in the manufacturing of biscuits and confectionary products. Similarly, the Joint Director, JNCH Lab, Nhavasheva vide F.no. S/16-11/2018-19/JNCH Lab dated 08.08.2018 has opined that walnuts may be used for source of dietary fibers in the manufacture of Biscuits/cookies and confectionary. By similar technical opinions vide letters dated 27.08.2018, it was confirmed that walnuts is used as flavour as well as fruit/nut in the manufacture of Biscuits/cookies and confectionary. He submits that above technical opinion cannot be brushed aside without providing any cogent evidences to show the contrary in the instant case. He takes support from the following judgments: 1. Interncontinental (India) vs Union of India 2003 (154) ELT 0037 (Guj.) 2. Tribunal Mumbai Final Order no. A/85730/2020 dated 11.09.2020 6.2. He further submits that words ....
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....bove provisions which existed under the previous policy period under para 4.55.3 of HBP. He submits that the board circulars are binding on Customs authorities as held by Hon'ble Gujarat High Court in the case of F.S. Enterprise vs State of Gujarat 2020 (32) GSTL 321. It is his submission that as per policy circular no. 72/2008 dated 24/03/2009 that flexibility has been given to import alternative inputs or goods which are capable of using in the export product. Therefore, inputs which are covered under the description are entitled for DFIA exemption for claiming DFIA benefits by either exporter or transferee or the importer under the Transferable DFIA scheme. He also submits that vide policy circular no. 22, a transferee of the license can apply for amendments in ITC (HS) numbers of the inputs to the regional licensing authorities. He submits that it is the case of the appellants that walnuts can be interalia used for the manufacture of export product under DFIA i.e. biscuits as a food/ fruit/flavour or dietary fiber. Therefore, there is no reason for rejecting the benefit under DFIA scheme in terms of Custom Notification No. 19/2015-Cus dated 01.04.2015. He submits that in any ev....
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....nversion of shipping bills to drawback shipping bills which is not the case here. Similarly, the case of Swiber Offshore Construction Pvt. Ltd. vs Commissioner of Customs, Kandla is also not applicable as the issue involved in that case is denial of cross examination by the Adjudicating Authority. He submits that the present appeal challenging the letter of Joint Commissioner before the Tribunal is not maintainable. He placed reliance on the following judgments: 1. Commissioner of Customs and Central Excise Vs M.P. Steel Corporation- 2003 (154) ELT 12 (SC) 2. M/s Piramal vs. Commissioner of Central Excise, Chennai vide Final Order no. A/40550/2017 dated 30.03.2017 7.2. He further submits that the appeal is treated as if the above communication is treated as an order of the Commissioner, the question arises is that whether it is binding on the assessee. The Assessing Officer are independent to perform the function of quasi judicial authorities and orders passed by them are also quasi judicial orders. Therefore, such orders are required to be passed by exercising independent mind. Therefore, decision order of the Commissioner is not binding on t....
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....ia Tariff code has 8 digits. When there are two different item headings available in the CTI, they are two distinct and different commodities and not one and the same. Therefore, when goods are listed in two separate sub-headings as two different commodities, they are two distinct and different commodities and not one and same. He takes support from the Hon'ble Supreme Court decision in the case of Ravi Prakash Refineries (P) Ltd. vs State of Karnataka 2017 (349) ELT 5 (SC). 7.4. He further submits that Notification prescribed one condition that the description, value and quantity of material imported, are mentioned in the Authorisation. In the present case, the description and the classification of imported goods is not matching with the description and classification mentioned in the scrips issued by the DGFT. Therefore, the benefit of notification cannot be extended in the light of the Hon'ble Supreme Court judgment in the case of Commissioner of Customs (Import), Mumbai vs. Dilip Kumar ad Company 2018 (361) ELT 577 (S.C) as the notification should be interpreted strictly. He submitted that in SION norms, there is General Notes for all Export Products Groups which....
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....rit of the case, we find that In the present case, the DFIA's produced by the appellant are post export entitlements . The DFIA's are issued against Export of Biscuits as per SION E-5. As per the provision of Para 4.27 (ii) of FTP- 2015-20, DFIA is issued for products for which Standard Input output Norms are notified. 9.1. It is settled law that a DFIA is governed by SION which is notified for the relevant export product. There is no provision either in the Policy or in the Hand book to say that DFIA benefits can be claimed on the basis of ITC (HS) numbers. Even SION does not prescribe any ITC (HS) Numbers. 10. The Hon'ble CESTAT (Mumbai) in the case of USMS Saffron Co. Inc. Vs. Commissioner of Customs, ACC, Mumbai vide Final Order No. A/3627/15/CB dated 30.09.2015 has held that even ITC (HS) Number is not a criterion to get the benefit under the FTP and Customs provisions as long as the items falls under the description of goods in the DFIA. Therefore the contention that Food Flavour (Vanillin) is covered under ITC (HS) 29120000 cannot be permitted is not correct. The DFIA being a post export entitlement scheme and different ITC (HS....
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....oner of Customs, Ahmedabad in Final Order No. A/10962/2019 dated 03.06.2019, it was held as under: "11. We find that the appellate Tribunal has already held that the Walnut Inshell is covered by the description of 'Food Flavour/Flavouring Agent/Flavour Improvers' and Dietary Fibre' respectively under serial no.6 and 11 of the SION E-5. The appellate Tribunal upon the certificate of the IIT and technical reference books and several wrappers produced by the appellant to show that the walnut is used as relevant food flavour/flavouring agent/flavour improvers' and dietary fibre' for the manufacture of Biscuits. Moreover, we also find from the technical opinions of IIT and other technical references that walnuts as fruit/nut of bakeshop , it can be used as food flavour in the manufacturing of biscuits and assorted confectionary products and also as substitute of protein and dietary fibre (in appropriate proportion) in the manufacturing of biscuits and confectionary products. We are of the considered opinion that the Inshell Walnut are actually used in the manufacturing of Biscuits in view of the technical material produced by the appellant in the appeal before....
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....n'ble High Court has extensively dealt with the scheme of DFIA for reaching the above conclusion. In our view once the imported goods satisfy the description given in the SION and reproduced in the DFIA, they are clearly entitled to claim benefit without payment of duty on the strength of the valid DFIA irrespective of ITC(HS) No. mentioned in the DFIA. Interestingly SION does not refer to ITC (HS) Codes and only the description and quantity of the goods allowed to be imported are mentioned. We also find that no actual user condition is specifically mentioned in the SION E-5. In a post export entitlement scheme like DFIA, in our view once the endorsement of transferability is made in the DFIA, the imported goods only requires to be covered by the description, quantity mentioned in the DFIA within the overall CIF value as specified therein. As per our above discussion, we are of the view that appellant is entitled to clear the imported 'Inshell Walnut' against the DFIA License obtained against export of Biscuits and produced before the customs authorities. Accordingly, the appeal is allowed with consequential reliefs". 15. The revenue contended th....
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....rm of "Kumkum" can avail benefit of Notification. In said context, it is held that the Central Government in its Notification has not confined the benefit of Notification to particular form of "Kumkum". There is no valid reason to exclude Kumkum in pencil form and therefore, the benefit has been accorded. According to petitioner, SION E75 refers the input commodity as "maize" without putting any restriction therefore, entry would cover maize of any quality, since the norms have not confined any quality of maize. 18. On similar line, the petitioner relied on reported case of M/s. Jain Exports (P) Ltd. and Another v. Union of India and Others, (1988) 3 SCC 579 = 1992 (61) E.L.T. 173 (S.C.). In said case, issue was whether import of industrial coconut oil was banned under Import Policy. It was observed that in relevant appendix there was no classification of coconut oil therefore all varieties of coconut oil should be taken as covered by said term. Precisely, it was observed that the term coconut oil as mentioned should take in its folds all varieties. The Hon'ble Supreme Court in reported case of Commissioner of Central Excise, New Delhi v. Connaught Plaza Res....
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....Respondents' stand that maize is a generic term is based on the submission that there are different varieties of maize namely flint corn, dent corn, hybrid, popcorn etc. This argument does not stand to reason because maize itself is a quality of Cereal. When the term cereal is used, naturally unless it is specified, one cannot understand what it means. Naturally Cereal is generic term which covers all its types like corn, oat, wheat, rice etc. However, when the term maize is used, it is a specific class of cereal apart from its inter se varieties, therefore, the term maize can be well construed as a specific term and therefore, the provision of para 4.12(i) would not apply. 23. Respondents would submit that the general norms would indicate that, the items which are imported should be used for manufacturing resultant exportable items. The object of the scheme is to be looked upon to understand whether there exist actual user condition. For this purpose, respondents attracted our attention to the "general notes for all export products groups". Note-1 :- "1. The norms have been published in this book with a vie....
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....anufacturing in his own unit. It means that actual user condition relates to a person and not to a product. Therefore, the argument advanced by the petitioner regarding actual user condition would not sustain. 25. It is not denied that popcorn maize has also similar starch contents as other varieties of maize, indicating that popcorn maize can be used to manufacture maize starch powder. The scheme never conveys that there is actual user condition attached to the import against the export obligation. It amounts to adding some conditions in the FTP when they never exist. Moreover, when the authorisation is made transferable under the scheme there is no question of actual user condition. 26. It reveals that DFIA scheme is distinct than Advance Authorization Scheme where raw material is to be imported on authorization and to be used for manufacturing purpose. Basically, DFIA is post export scheme in which exporter has to first export goods and after realization of proceeds, exporter has to make an application to the authority, who after verification, grant DFIA certificate which is transferable. Therefore, there is no actual user condition inbuilt under th....
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....en that all the issues raised in the present case have been considered. As regard the description of the goods in the said case the license was issued for input namely 'Maize' against export product of Maize Starch Powder, whereas, the importer had imported Popcorn Maize. The revenue's contention was that the popcorn maize is not used for manufacture of Maize starch powder. The Hon'ble court has decided that even though the popcorn maize is not used for manufacture of maize starch powder but since it is capable of being used, its import is permitted under DFIA. The present case is on a better footing that the 'Inshell Walnut' is not only capable of being used but invariably used for manufacture of biscuits as fruit/flavor/dietary fibre. This has been held in appellant's own case by the Hon'ble CESTAT-Mumbai in Final Order No. A/85730/2020 dated 11.09.2020. Moreover, as per the custom's lab report dated 08.08.2018 and various technical opinions as discussed above, the Inshell Walnut is used as flavor or fruit/nut or dietary fibre in the manufacture of biscuits/cookies and confectionary. Therefore, there is no dispute that inshell walnut is correctly covered under the description of ....