In re Unibourne Food Specialities (CAAR Mumbai)
The applicant, M/s Unibourne Food Ingredients LLP, filed an application before the Customs Authority for Advance Ruling (CAAR), Mumbai, seeking clarity on the applicability of Customs Notification No. 25/2023-Cus dated 01.04.2023 The issue pertained to exemption from Basic Customs Duty on import of various food ingredients under Transferable Duty-Free Import Authorisations (DFIA) issued against exports of confectionery products, biscuits, vegetable pickles, and savouries under relevant Standard Input Output Norms (SION).
The applicant contended that the inputs proposed for import were non-sensitive goods and not covered under Paragraph 4.29 of the Foreign Trade Policy (FTP), 2023. It argued that no correlation of technical characteristics, quality, or specifications between imported inputs and export products was required for such non-sensitive inputs. The applicant further submitted that certain value cap restrictions and “actual user” conditions mentioned in DFIA licences were not legally enforceable, relying on judicial precedents and interpretation of FTP provisions.
The Authority examined the legal framework governing DFIA, including Notification No. 25/2023-Cus, FTP provisions (notably paragraphs 4.24, 4.26, 4.12, and 4.29), and relevant circulars. It observed that exemption under the notification is conditional and requires strict compliance with the DFIA licence and SION norms. The notification mandates that the authorisation must be valid, duly endorsed with SION details, and that imported goods must conform to the description, quantity, and value specified in the authorisation.
