TaxTMI 
TaxTMI 
2024 (6) TMI 785
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....der DFIA scheme as per the clarifications issued by the DGFT, based on expert opinion from IIT etc. Therefore, he particularly seeks to rely upon Final Order No. A/12075/2023 Dated 20.09.2023 in the case of K S Enterprises Vs CCE. In which it was found out through various case law including of High Courts as well as Co-ordinate Benches of this Tribunal that to get cleared under DFIA Scheme only - broad categorisation is required based on the test of "capability of being used". And beyond this evidence was shown from expert opinion that can be used as other imported items then the same is entitled to exemption since exemption notification itself is an export notification and is therefore liable to be interpreted liberally. He particularly seeks to rely on para 2.6 to 3.5 of the above said order of K. S. Enterprises (cited supra) which has dealt with various case laws including of High Court and orders of various Benches of this Tribunal : Para "2.6 He further emphasizes that exemption notification are required to be strictly construed and also in case of any ambiguity in language, the benefit must go to Revenue. He seeks support of matter reported in 2018 (361) ELT 577 (S.C) in C.....
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.... of Customs Cal Vs. G.C.Jain 2011(269) ELT 307 (SC) . 2.10 Following the ratio of judgement of Hon'ble Supreme Court in the case of Commissioner of Customs , Kolkotta Vs. G.C. Jain and followed by this Tribunal in the case of Unibourne Food Ingredients LLP Vs. Commissioner of Customs , Mundra reported 2022(381) ELT 810 (Tri- Ahd) the term 'Materials' used in Notification No. 19 of 2015 are "raw material, components, intermediates, consumables, catalysts and parts which are required for manufacture of resultant product " are identically worded notification as referred in the Hon'ble Supreme Court judgement 2.11 It is submitted that the Technical Opinion dated 31.03.2023 of IIT, Kharagpur that EV batteries are typically made up of multiple rechargeable lithium-ion cells connected together to form battery pack. It is opined that Electric batteries (EV) are "Automotive Batteries' used in Buses/Cars etc are also capable of being used in Agricultural Tractors after suitable technical modification. 2.12 The technical opinion of IIT Kharagpur clearly supports the case of the appellant. This Tribunal in the case of VKC Nuts Pvt., Ltd., Vs. CC, Jamnagar vide Final Order No. A/11365/....
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....to import alternative inputs either used in the export product or are capable of using in the export goods. The appellant relies upon the following judgements:- Commissioner of Customs (Export), Nhavasheva Vs. Sparkling Traders Pvt. Ltd., - 2019 (368) ELT 962 (Tri-Mumbai). Final Order No. A/10255/2022 dated 17.03.2022 passed by the Hon'ble Appellate Tribunal (Ahmedabad) in the case of Unibourne Food Ingredients LLP Vs. Commissioner of Customs, Mundra. Sachin Pandey Vs. UOI - 2020(371) ELT 34 (All.) . 2.17 It is submitted that the Hon'ble High Court (Allahabad) in the case of Sachin Pandey Vs. UOI , under Para 16, it was inter alia held that " We see no reason to take a different view to take away the benefits otherwise available under DFIA Scheme under the Foreign Trade Policy, whether 2009-14 or 2015- 20, merely satisfy the petitioner. According to us the aforesaid judgements of the Punjab & 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 above mentioned 'three essent....
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....ion No. 19 of 2015 and the decision of the lower authority to deny the benefits under the said notification is not correct and legal. 2.23 It is submitted that lower authorities may be directed to issue a certificate for the purpose of revalidation in terms of provision of Para 2.20 of Hand Book as held by this Hon'ble Tribunal in the case of Pushpanjali Floriculture Ltd., Vs. Commissioner of Customs, Nhavasheva - 2015 (327) ELT 0077 (Tri-Mum). 3. Considered contrarian submissions made by both the parties. At the heart of the issue is the controversy emanating from Lithium Ion Cells not having been specifically used in export goods under paras 4.12 (i) (ii) of Foreign Trade Policy. Party had exported automotive batteries classifiable under Tariff Heading 85071000, as against Lithium Ion Cells being classified under Tariff Heading 85076000, being the import item. The party has relied upon various judgments, some of which were considered and distinguished by the Commissioner below. The party has relied upon such decisions to plead that issue is no more res integra and has been decided in their favour by Tribunal as well as various Hon'ble High Courts and they had also relied on....
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....ls) has denied benefit only on the ground and by playing on the words "used in electronics only" in B/E, despite appellants agitating through out with opinions and literature that impugned batteries were automotive and capable of use in E.V tractors. A substantive benefit in any case cannot be denied on such ground, specially when it is known that EV tractors use various chip based and lithium based sub assemblies of electronics. Leaned Advocate for the appellant emphasised that under DFR Scheme there is no prescription of actual user condition nor is one to one co-relation between the product exported and the product imported is required, and this is the uniqueness of the scheme. It was also pointed out by the learned Advocate and we agree with the proposition that impugned Customs Notification No. 19/2015 was under challenge and that the Hon'ble Allahabad High Court in Sachine Pandey case (cited supra) upheld non-correlation as one the feature of the DFIA Scheme. 3.3 We further find that in various decisions reported by either side that it is the possibility of use of product against the product exported which has been considered, as criteria for permitting import of product. ....
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....hnical opinion produced by the party in the instant case clearly show that lithium batteries can be used in e-agri tractors, and therefore are in the nature of automative batteries though may or may not be in the from of traditional batteries. This can also be stated in the light of decision in M/s. Shalimar Precision Enterprises Pvt as reported in 2022 (9) TMI 228 (CEATAT-Del.), wherein consignment of melamine imported by the appellants was allowed duty free import against description of Syntan the term "syntan" referred to synthetic agent. The findings which are relevant for the purpose of the present dispute and are therefore reproduced below: "21. The undisputed facts are that the appellant had imported Melamine declaring it Melamine and claiming the benefit of exemption under DFIA licence which permitted import of "Syntan". The short question which arises is whether the Melamine is a Syntan or otherwise. The Proper Officer had cleared the consignment for home consumption accepting Melamine to be Syntan. Thereafter, DRI initiated investigations and felt that Melamine was not Syntan. During enquiries by DRI importers had pointed out to it the order of the Tribunal in Dimple O....
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....ignored the judicial precedent which is not only highly irregular, but is also in violation of judicial discipline. 24. Another ground in the show cause notice was that the original exporter from whom the appellant purchased the licence had not used Melamine in manufacture of exported products. As has already been recorded in the show cause notice itself DGFT had clarified that the imported material need not have been used and it is sufficient if it is capable of being used in the manufacture of final products. In our considered view, neither the Additional Director DRI who issued the show cause notice, nor the adjudicating authority who confirmed the demand or the Commissioner (Appeals) have a jurisdiction to modify the scope of the licence when it is clarified by the licensing authority DGFT itself. So long as Melamine can be used as Syntan which appears to be true from the literature produce before us and also the decision of this Tribunal and Dimple Overseas Ltd. it qualifies as Syntan. 25. Even if it is presumed that for the sake of argument that all the technical literature is wrong and only the expert at CLRI is correct and Melamine cannot be used directly as Syntan, b....
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....esent case is distinguishable inasmuch technical literature has been provided by the appellant to assert that the expert opinion was not correct and cross-examination was sought, but it was not provided for the reason the expert did not show up despite notices by the Adjudicating Authority. In this case, the judgment of the Supreme Court in G.C. Jain has also been brought to our notice. 30. Further it has already been clarified that DGFT itself had clarified that the material need not have actually been used but so long as it is capable of being used in the manufacture of final products it clarifies under the licence. 31. To sum up, the lower authorities have confirmed the demand ignoring the order of this Tribunal in Dimple Overseas Ltd., ignoring all the technical literature which state that Melamine can be used directly for tanning leather, relying on the opinion of CLRI contrary to the published literature and without even allowing cross-examination of that expert, on the ground that Melamine was not used in the export products contrary to the DGFT's clarification that actual use does not matter and on the ground that the HSN codes of Syntan and Melamine were differen....