TaxTMI 
TaxTMI 
2025 (6) TMI 695
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....hennai were misusing the Target Plus Scheme ('TPS' for short) by utilizing the license obtained under TPS against export of Ready Made garments for import of plastic granules which allegedly did not have any broad nexus with primary product exported by them, DRI, Chennai Zonal Unit conducted investigation. Revenue felt that since the Notification No.32/2005-Cus. dated 08.04.2005 issued by the CBEC applies to the Target Plus Licence (duty credit Certificate) issued under the TPS based on the incremental growth in exports made; in terms of para 3 of the said Notification, the goods imported against a duty credit certificate issued under TPS shall not be transferred or sold, where the goods are imported by a merchant exporter having supporting manufacturers whose name and address are specified on the said licence, the said goods may be utilized by the said supporting manufacturers. Further, as per the Circular No.21/2007-Cus. dated 08.05.2007 issued by the CBEC, the holder of the certificate issued under TPS is permitted to import under TPS and get the same processed into possible resultant products only if the same has a 'broad nexus' with the product group as an input in the export ....
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....l.) wherein the Hon'ble Court has quashed (i)para 3.2.5 of the HBP, (ii) Circular No.21/2007-CUS dated 08.05.2007; and (iii) Public Notice No.9/2007 dated 21.06.2007. From a conjoint reading of the above ruling and the clarification issued by DGFT, the Commissioner has observed further that General Policy for packing material would apply to all the product groups including Textile Group. The same is reproduced for convenience : Para 24 (v). " General Policy for Packing Material" will apply to all the product groups including "Textile" group. Para 1(b) of the policy clearly provides input norms for manufacture of packing materials. It says: Raw materials to be used for the manufacture of packing materials.... on net +5% wastage'. As polybags are manufactured using PP/PE granules and the item of import is covered by the SION norms and 'broad nexus' between the imported goods and export product group is clearly established as per the discussion in para 24 above. Therefore, I hold that the items of import i.e. PP/PE granules had 'broad nexus' with the export product. " 6. Insofar as the second issue as to whether the goods imported are for their own use or for the use of supporting ....
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....which the exported items fell as declared in the Aayat-Niryaat Form (Appendix-17D) as also the SION. This amounted to a clear violation of the Foreign Trade Policy, and hence the Customs Notification - 32/2005, which is issued with a clear reference to para 3.7 of the said Policy. (iii) The Adjudicating Authority failed to notice the difference between the final product manufactured using the PP granules viz. Jumbo bags, was different from 'knitted garments' - the product manufactured and stated as exported by the licencee while obtaining the Target Plus licence. (iv) The reference to Customs Notification - 12/2012 dated 17.03.2012 by the Adjudicating Authority to grant benefit to the respondent fails since there is a perceptible difference between printed 'polybags' and 'jumbo bags', which are categorized as "Flexible Intermediate Bulk Containers" (FIBCs). (v) The Adjudicating authority failed to notice that no supporting manufacturer was declared to DGFT while obtaining the Licence and thus, no supporting manufacturer was mentioned on the Licence. This was a clear case of diversion of goods, violating the FTP as well as the governing Customs Notification. Th....
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.... contentions and we have carefully perused the synopsis/written submissions filed by both the parties; we have also carefully considered the binding decisions of courts referred to before us. After hearing both sides, we find that the only issue to be decided is, "whether the impugned OIO is correct in extending the benefit of TPS scheme to the Assessee-Respondent?" 13. In the backdrop of the facts as explained by the rival parties which have been extracted/reproduced in the earlier paragraphs, we find that a similar issue has been considered by this Bench in the case of CC (Airport & Aircargo), Chennai Vs Sunstar Overseas Ltd. vide Final Order No.40524/2025 dt. 08.05.2025 [read with corrigendum dt. 27.05.2025 in Customs Appeal No.61/2009] and after following the very same decisions supra, we have held that the assessee/importers therein has been correctly given the benefit of TPS and the consequent dropping of the proposed proceedings by issuing SCN has been held to be in order. Relevant observations are as under : "The Target Plus Scheme was formulated in Chapter 3 of the FTP for 2004-09; the Scheme came to be discontinued in 2006. Paragraph 3.7.1 of the same provides that the....
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....which are imported as inputs must find physical incorporation in the export products in relation to which the benefit of the TPS is claimed. In fact, even para (3.2.5.) of the Handbook of Procedures, which spells out the meaning of the broad nexus requirement, does not impose such a condition. (Bombay HC). 15. What emerges from the above rulings wherein para 3.7.6 of FTP in question has been interpreted to the effect that the policy provisions do not restrictively require the assessee to prove that the goods imported by them were usable in the very products which were exported by them for TPS certificates. 16. From a cumulative reading of both paras of FTP, the reference 'product groups' has been liberally interpreted by the constitutional courts in the case of in Union of India Vs Indian Exporters Grievance Forum - 2013 (290) ELT 481 (Del.) and in Essel Mining & Industries Ltd. Vs Union of India - 2011 (270) ELT 308 (Bom.). The same however, would cover a situation, like the present case on hand, is to be considered. PP granules were imported which were converted into plastic bags/inner layers of bags that were claimed to have been used as a 'packing material' for Rice that wa....