TaxTMI 
TaxTMI 
2022 (11) TMI 353
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.... contrary to the provisions and spirit of Foreign Trade Policy; (b) This Hon'ble Court be pleased to issue in public interest such appropriate orders or direction as may deem just and expedient, directing the officers of the Respondent nos.1 and 3 to forthwith take steps- (i) To deny exemption from payment of Basic Customs Duty under Custom Notification No.19 of 2015 in respect of the goods imported by a Transferee under a Transferrable Duty Free Import Authorisation (DFIA), for non-fulfilment of condition contained in first proviso to condition (iii) of the said Notification read with Paragraphs 4.12 (i), 4.12 (ii), 4.29 (iv) and 4.29 (v) of Foreign Trade Policy, if the imported goods are not of same quality, technical characteristics and specifications as the materials used in the shipping bills; (ii) To issue any Transferrable DFIA or to strictly restrict duty free import entitlement under any Transferrable DFIA already issued as per any specific material actually used with quality, technical characteristics and specifications declared by the exporter/original license holder under Appendix 4H notwithstanding Paragraph 4.27(i) of FTP and the Standard Input Output Norms;" 2....
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....and that the words "the quality, technical characteristics and specifications" shall be read even into the first proviso to condition (iii) and in Paragraphs 4.12 of the Foreign Trade Policy. He also submits that although the substantive condition (iii) of Notification No.19 of 2015 refers to the words "of materials imported", the words "the material used" in the first proviso would also include not only the material imported but also even the material which is domestically procured. The petitioner further submits that irrespective of the fact that the words "same quality, technical characteristics and specifications" are used only in second proviso to condition (iii), the same shall also be necessarily read even in the first proviso to condition (ii). The petitioner further contends that to restrict duty exemption in public interest, the officers shall be directed to issue any Transferrable DFIA or to strictly restrict duty free import entitlement under any Transferrable DFIA already issued, only as per any specific material actually used with quality, technical characteristics and specifications declared by the exporter/original license holder under Appendix 4H, notwithstanding P....
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.... quantity, respectively, as the material used in the export of resultant product. The exporter shall declare these particulars of materials used in the shipping bill or bill of export. Provided further that in respect of resultant products requiring inputs specified in paragraph 4.30 of the Foreign Trade Policy, the materials permitted in the said authorisation shall be of the same quality, technical characteristics and specifications as the materials used in the said resultant product. The exporter shall declare these particulars of materials used in the shipping bill or bill of export;" 6. The first and second proviso refer to Paragraphs 4.12(i), 4.12(ii) and 4.30 of Foreign Trade Policy, which read as under:- "4.12 Accounting of Input (i) Wherever SION permits use of either (a) a generic input or (b) alternative input, unless the name of the specific input together with quantity which has been used in manufacturing the export product gets indicated/endorsed in the relevant shipping bill and these inputs, so endorsed, within quantity specified and match the description in the relevant bill of entry, the concerned Authorisation will not be redeemed. In other words, the name....
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....sed in Paragraph 4.30 of FTP and also in the second proviso to the condition (iii) of the Customs Notification No.19 of 2015, however they are absent in Paragraph 4.12 of FTP and also in first proviso to condition (iii) of the said Customs Notification. These further words i.e. "same quality, technical characteristics and specification" cannot be read in Paragraph 4.12and also in first proviso to condition (iii). These further words would apply only while making declaration in shipping bills in respect of sensitive inputs specified in Paragraph 4.30 of FTP, while issuing DFIA in respect of such specified sensitive inputs, or while duty free import of such specified sensitive items under such DFIA to establish close nexus with the specified sensitive inputs used. 9. Paragraph 4.27 (i) of the FTP stipulates the eligibility criteria for issuance of DFIA as follows:- "4.27 Eligibility: (i) Duty Free Import Authorisation shall be issued on post export basis for products for which Standard Input Output Norms have been notified." 10. It is clear that Paragraph 4.30 is an exception to the above Paragraph 4.27(i) of FTP regarding eligibility for issuance of DFIA. Therefore, wherever s....
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....ther the officers nor any Transferee of a transferrable DFIA issued by the office of DGFT can be subjected to any of the impediments as suggested by the petitioner in the garb of public interest. 15. Vide a Judgment dated 18.10.2019, the Hon'ble Allahabad High Court was pleased to dismiss a similar PIL Civil No.28695 of 2019 in Sachin Pandey vs. UOI thru Secy. Ministry of Commerce & Industries & Ors., while inter alia relying upon judgment of Hon'ble Bombay High Court in Shah Nanji Nagsi Exports Pvt. Ltd. Vs. Union of India reported in 2019 (367) E.L.T. 335 (Bom), with the following observations:- "4. A new Foreign Trade Policy 2015-20 was announced on 01.04.2015 incorporating various changes under DFIA Scheme. The FTP for the year 2015-20 provides a frame work and mechanism for increasing export of Indian goods. In order to increase the foreign trade, certain concessions have been accorded to Indian traders. 5. FTP 2015-20 floated a Duty Free Import Authorization Scheme (DFIA) to regulate export viz-a-viz import of the goods. It is a post export scheme which gave exemption from basic custom duty while importing specified inputs. The design of the scheme is like, the merchant/....
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.... 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. 27. As per SION export item at serial No.E-75 is maize starch powder against which exporter is permitted to import "maize" without putting any condition or restriction as regards to variety, quality or characteristic in the said entry. Moreover, there is no such corresponding condition in licence. In its absence, any addition of words cannot be imported to change the equation. Precisely, import of popcorn maize is not excluded from the scope of term "maize". 16. We see no reason to take a different view to take away the benefits otherwise available under the DFIA Scheme under the Foreign Trade Policy, whether of 2009-14 or 2015-20, merely to satisfy the petitioner. According to us the aforesaid judgments of the Punjab and Haryana High Court and Bombay High Court still hold the field, so far as permitting duty-free imports under DFIA are concerned. The contention of the petitioner that duty free import of any goods under DFIA cannot be permitted unless each of the abovementioned "three essential conditions" are satisf....