TaxTMI 
TaxTMI 
2003 (1) TMI 208
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....nd the imported items is inherent in the Notification and the Duty Exemption Scheme. Further to above, the licence in the present case was issued subject to the condition sheet attached to licence, wherein condition No. VII specifically required that nexus between item of import and export product must be maintained. This condition was not deleted by the Licensing Authority even after endorsement of transferability. It has been held by the Hon'ble CEGAT in Mewati & Co. v. Collector of Customs, Bombay - 1996 (81) E.L.T. 109 (Tribunal) that the transferability only indicates that the licence holder can, if he does not himself require the items permitted thereunder, pass over his entitlement under the licence, to any other person similarly situated. The mere right to transfer the licence neither bestows upon him nor entitles him to transfer any right more than what he possesses. The effect of making such licence transferable, may result in the holder of such Licencees earning some premium, but in the absence of any specific provision, such right cannot be construed as enabling the transferee to import any item mentioned as permissible notwithstanding its nexus with the export produ....
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....e imported against export to be made has been defined in the relevant Notification No. 80/95 and order-in-original clearly gives a finding after detailed discussion that the impugned imported product has no nexus to the exported product and hence the duty exemption cannot be granted by the Customs Authorities. He also submits that the Commissioner (Appeals) is clearly in error when she says that customs authorities cannot deny the duty exemption once the DGFT has made the licence transferable. He also refers to various circulars of the DGFT and the Board at Annexure E-I to E-V to the Appeal Memorandum. Finally, he states that the provision of relevant Notification No. 80/95-Cus., dated 31-3-1995 has to be strictly interpreted particularly with reference to Explanation (iv) and the exemption has to be denied where nexus between the imported product and export product has not been established. He also refers to the following case laws :- (1) Mewati & Company v. Collector of Customs, Bombay - 1996 (81) E.L.T. 109 (Tri.) (2) SVA Udyog Viniyog Ltd. v. U.O.I. - 1993 (65) E.L.T. 20 (Bombay) ....
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....th the export product, the duty exemption cannot be granted to the same. On the other hand, the order-in- appeal passed by the Commissioner (Appeals) is superficial and sketchy, the operating portion of which runs into the following four short paragraphs in which she does not deal with the facts of the case, the provision under the relevant notification or other law points involved :- "From the above it is clear that appellants are holding a validly transferred licence and in terms of condition VII of the notification 80/95 benefit accrues. The DGFT, the authority for the endorsement for transferability has discharged their obligation, subsequently to sit in judgment after endorsement is going beyond the said jurisdiction. The impugned import has been made based on licence issued by the competent authority. Once the export obligation under the DEEC Scheme are met with and the licence transferee are available, no further nexus is required to be established between the goods imported and goods earlier exported under the DEEC Scheme. Since the goods were imported against advance licence which covers the description of impugned goods and licence was validly transferred. Hence app....
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....they conform to description in the licence. 8.The scheme also permits, as an exception, to fulfil the export obligation first using available materials with the exporters and subsequently making duty free imports against such exports. As a further relaxation the scheme also allows such licences where export obligations are fulfilled to be transferred with approval of the DGFT authorities. In such cases, the export products would have been examined by the customs authorities but the imported goods can only be examined for the first time when they are imported by the transferees. The impugned order relates to such a case where white marble of Greek origin have been imported against transferred licence issued for prior export of green marble of Indian origin. 9.Keeping in view the basic features of the DEEC Scheme as explained above and also the specific provision contained in the customs duty exemption Notification No. 80/95-Cus., dated 31-3-1995, we have no doubt in our mind that since imported product in this case has no nexus as per the detailed finding of the adjudicating Additional Commissioner with the export product, the same cannot be given the customs duty exemption. T....