TaxTMI 
TaxTMI 
2025 (12) TMI 1571
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....for short) issued in line with Paragraph Nos.4.24 and 4.26 of the Foreign Trade Policy (FTP). (3) On the facts, the respondent - assessee is a transferee of DFIA issued against the export of Assorted Confectionary Products (SION E-1) and Biscuits (SION E-5). The respondent - assessee had filed an application under Section 28H of the Customs Act, 1962 before the Customs Authority for Advance Rulings ("CAAR") seeking a ruling on the permissibility of importing Inshell Walnuts by availing the benefit of Customs Notification No. 25/2023-Cus dated 01.04.2023. The said import item was claimed to be covered under the description of "Other Confectionary Ingredients" - viz. (i) Relevant Fruits; and (ii) Nut and Nut Products - under Sr. No.7 of the DFIA issued as per SION E-1, and also under the description of "Dietary Fibre" at Sr.No.4 ("Biscuit and Additives and Ingredients") of the DFIA issued as per SION E-5. The authority answered the question in the affirmative, holding that the import of Inshell Walnuts is permissible under the said DFIAs, subject to compliance with the value-based limitations endorsed therein. (4) The DFIA is a post-export duty credit instrume....
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....lars cannot override HS-code requirements under DFIA/SION. It is submitted that In-shell Walnuts (08023160) are unspecified, so CAAR's generic, "dietary fiber" exemption is unsustainable and risks misuse. (9) The condition (iii) of Notification No. 25/2023-Cus, requires clear description, specifications, value, and quantity of imported materials in the authorization. It is submitted that without a precise match, the exemption must be denied. The Supreme Court in the case of M/s.Dilip Kumar & Co. (supra) held that exemption notifications are to be strictly construed, with the burden on the importer. (10) The "FTP" expressly requires that materials imported must be the same in name, characteristics, and specification as actually used in the exported product. It is submitted that no evidence is placed of use of walnuts in the exported items. It is submitted that statutory pre-conditions being unsatisfied, exemption cannot be granted. (11) Reliance is placed on the DGFT's (Directorate General of Foreign Trade) Public Notice No. 20/2025-26 dated 26.08.2025, which is subsequently issued after the filing of the appeal, and it is submitted that it suspends SION norms in the fo....
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....igation under the DFIA. ANALYSIS AND OPINION: (16) The following questions of law are proposed in the present appeal : "2.1 "Whether the applicant is entitled to claim exemption from payment of Basic Customs Duty against Custom Notification No. 25/2023-Cus dated 01.04.2023 under Transferable Duty-Free Import Authorisations (DFIAs) for their import of Walnuts Inshell against import goods description of 'Fruits & Fruit Products and Nut Products' against Export of Assorted confectionary goods and against the description of 'Dietary Fibre' against Export of Biscuits? 2.2 Whether the applicant is required to match the ITC (HS) numbers mentioned in the DFIA vis-a-vis the ITC (HS) Number of import goods for clearance against Notification No. 25 of 2023 under DFIA Scheme ? 2.3 Whether the CAAR erred allowing the exemption as per for Notification No. 25/2023 dated 01.04.2023 "Walnuts In-shell" under general heads such as "Dietary Fibre" and "Other Confectionery Ingredients" without technical linkage to actual exports. 2.4 Whether the CAAR's approval of the clearance of imported goods-without matching the ITC (HS) number as required under....
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....Jawahar Customs House Laboratory vide report dated 8th / 27th August, 2018. The appellant has not disputed the said technical opinion but only stated that the said authority has expertise in chemical analysis of goods but do not have expertise or mandate on food and nutrition science and that opinion appears beyond their mandate and expertise. 17. In the case at hand, the issue is whether the subject walnuts in-shell are covered under the description of input entries 'dietary fibre' and therefore, whether same can be permitted for duty free clearance against the DFIA issued against the export under SION E5 which inter-alia permits duty free import of 'dietary fiber'. xxxxxxxx 23. In the case at hand, we observe that the respondent-company has imported 791 bags of in-shell walnuts under Bill of Entry No. 9878513 dated 31st January, 2019 and has claimed exemption under the said notification dated 11th September, 2009 on the strength of the DFIA against import item of dietary fibre under SION E5. The said goods as mentioned earlier were cleared without payment of duty and exemption benefit was allowed. The custom authorities have however seized the said 791 ....
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....ts may be used as a source of dietary fibre in the manufacturing of biscuits / cookies and confectionery, which has not been refuted. (19) In the instant case, CAAR, Mumbai, while placing reliance on the legal precedent set by the various High Courts and Tribunal and the conditions prescribed in the Notification No. 25/2023-Cus dated 01.04.2023, along with the DFIA licenses issued by the DGFT in terms of Paragraph Nos. 4.24 and 4.26 of the Foreign Trade Policy for import of input used in exported products for SION Norms has held that the import of "Walnut Inshell" against the entry of "Dietary Fibers" in the DFIA license issued under SION Norms E-5 for export Biscuits is permissible. It is also held that the "Dietary Fibers" are mentioned at Item No.4 under the Generic Input Entry "Biscuit Additives and Ingredients" and DGFT vide Public Notice No. 41/2015-2020 dated 02.11.2016 have put a value criterion apart from the quantity mentioned therein, and hence the total CIF value of all the imports of inputs mentioned under Item No.4 cannot and should not exceed 10% of the total CIF value of DIFA license. The appellant has not pointed out any breach of the aforesaid value to us. (....
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.... a transferable DFIA issued against export of Biscuits (SION E-5). There is no dispute that goods exported are Biscuits and are covered by SION E-5. The said SION E-5 inter alia permit duty free import of relevant food flavor/flavouring agent/flavor improvers' (Sl No. 6) and dietary fibre (Sl No.11). 11. The Ld. Advocate has produced IIT Certificate and technical reference books and several wrappers to show that Walnuts are indeed used as relevant food flavor/flavouring agent/flavor improvers' and dietary fibre in biscuits manufacturing. We agree with the contentions of the Ld. Counsel in this regard. The usability of Walnuts in Biscuits is beyond doubt. It is settled law that it would not be open to any one to take contrary stand, unless and until such technical opinion is displaced by specific and cogent evidence in the form of another technical opinion as held by the Hon'ble Gujarat High Court in the case of Inter Continental (India) Vs. UOI- 2003 (154 ELT 37 (Guj). There is no such contrary technical opinion is produced by the revenue. The Ld. Commissioner (Appeals) in the OIA himself accepts that Walnuts in shell contain dietary fibre albeit in small porti....