Unibourne Food Ingredients LLP Vs C.C.-Jamnagar (Prev) (CESTAT Ahmedabad)
Customs: Exporter not required to give declaration of technical specification, quality & characteristics of inputs used in resultant product
As per Policy Circular No. 72/2008 dated 24.03.2009, flexibility has been given to import alternative inputs or goods which are capable of using in the export product. Therefore inputs which are covered under the description are entitled for DFIA exemption for claiming DFIA benefits by either exporter or transferee or the importer under the Transferable DFIA Scheme. As per Policy Circular No. 22, even a transferee of the license can apply for amendments in ITC (HS) Numbers of the inputs from the regional licensing authorities. Therefore it cannot be said that if the specific name of input in the present case ‘Wheat Gluten’ is not mentioned in the licence or in the export shipping bill, benefit of DFIA cannot be extended particularly when the broad description as wheat flour is specified in SION as well as in the annexure to the DFIA licence.
The import goods “ Wheat Gluten ” or “Wheat Flour” are not specified under Sensitive items under Para 4.30 of FTP- (2015-2020) of DFIA’s. Therefore the exporter is not required to give a declaration of the technical specification, quality and characteristics of inputs used in the resultant product.
The Central Board of Excise & Customs vide Circular No. 46 of 2007 had earlier clarified the above provisions which existed under the previous policy period under Para 4.55.3 of HBP).It is settled law that Board Circulars are bindings on customs authorities as held by Hon’ble Gujarat High Court in the case of F.S. Enterprise Vs. State of Gujarat reported in 2020(32) GSTL 321 (Guj).
As per our above discussions and findings, we are of the view that in the facts of the present case the appellant is entitle for the benefit of DFIA for import clearance of Wheat Gluten.
FULL TEXT OF THE CESTAT JUDGEMENT
The issue involved is that whether the appellant is entitled to claim DFIA benefits for the import of “Wheat Gluten” against the input product description “Wheat Flour” (11010000) post amendment of SION E-5 amending Serial No.1 of the product description “Wheat Flour’” (11010000) vide Public Notice No. 41 dated 02.11.2016.
1.1 The brief facts of the case are that the appellant imported Wheat Gluten and claimed DFIA benefits on the strength of Two Transferable Duty Free Import Authorisations (DFIA) Nos. 0310863589 dated 09.06,2020 originally issued to R.K.Bakewell Mars Pvt. Ltd and DFIA No. 0310833517 dated 19.03.2020 originally issued to Krish Food Industry (India) by the Office of the Director General of Foreign Trade under the Foreign Trade Policy for the period (2015-2020) against export of Biscuits from the open market.
2. The aforementioned DFIAs are post export entitlements issued against Export of Biscuits as per SION E-5 and are freely transferable.
3. The appellant claimed duty free exemption for their import consignment of Wheat Gluten (ITC(HS) 11090000) against product description – (Wheat Flour).
4. The assessing officer raised a query and sought explanation from the appellant. It was mentioned that in respect of inputs referred in Para 4.12 (i) and (ii) of FTP-2015-20, the material permitted to be imported shall be of specific name/description or quantity which is actually used in the export product and should be mentioned in the relevant Shipping Bills. Further in terms of PN 41 dated 02.11.2016, DGFT has amended SION E-5, by amending product description in Serial No.1 to read as ‘Wheat Flour‘ (11010000). Therefore DFIA benefits cannot be extended in this case.
5. The appellant replied to the said query. However, Joint Commissioner of Customs (Preventive) with the approval of Commissioner of Customs (Preventive) informed the appellant that DFIA benefit cannot be extended and further directed the appellant to pay the applicable duty for clearance of goods.
6. The impugned communication is a decision of the Commissioner of Customs (Preventive) which was conveyed by the Joint Commissioner (Preventive). The reasons for denial of DFIA benefits for the impugned consignment has been recorded in the letter. The said communication mentions that the Commissioner of Customs (P) has confirmed the benefit of duty against the said DFIA cannot be allowed in the present case of imports and further directed to clear the import cargo against applicable customs duty. It is this decision of the principal commissioner which was communicated by the Joint Commissioner, the appellant is aggrieved with, hence they filed the present appeal.
7. Shri Hardik Modh, learned counsel appearing on behalf of the appellant in response to the preliminary objection raised by the Learned Authorised Representative that the appeal is not maintainable since it was filed against the letter issued by Joint Commissioner of Customs, he submits that the appeal is maintainable in terms of section 129 (1) of Customs Act, 1962 for the reason that the final decision was taken by the Principal Commissioner of Customs (Prev.) and it is that decision which was communicated by the Joint Commissioner of Customs (Prev.). Therefore, the order which was communicated to the appellant is given by Commissioner of Customs.
Therefore, against such order, the appeal lies before this Tribunal. In this regard, he placed reliance on the following judgments:
(1) Sterlite Optical Technologies Vs. Commissioner of Customs (Export) ACC, Mumbai reported in 2008 (226) ELT 0069 (Mumbai)
(2) Unibourne Food Ingredients LLP vs Commissioner of Customs, Hyderabad 2018(364) ELT 254 (Tri- Hyd)
(3) Samrat Houseware Pvt. Ltd. vs Commissioner of Customs (Sea), Chennai-V 2019 (368) ELT 1089
(4) S. S. Offshore Pvt. Ltd. 2018 (361) ELT 51 (Bom.)
7.1 He submits that in view of the above judgments it is settled position that against any decision taken by the Commissioner and communicated by the lower officer to the assessee, the appeal lies before the Tribunal. He further submits that as regard the case law in the case of Commissioner of Customs and Central Excise Vs M.P. Steel Corporation- 2003 (154) ELT 12 (SC), the same has no application in the present case. The said case relates to some internal correspondences between the Superintendent and Collector wherein the Collector took a policy decision on the question of how LDT was to be calculated. Whereas in the instant case, a clear decision was taken by the Principal Commissioner of Customs (Preventive) which was merely conveyed by the Joint Commissioner of Customs (Preventive). He further submits that the case law of M/s Piramal vs. Commissioner of Central Excise, Chennai vide Final Order no. A/40550/2017 dated 30.03.2017 has also no application as in the said case the assessee approached Hon’ble Tribunal against a rejection letter for extending warehouse period. He submits that the contention that the assessing officer is under no legal obligation to follow the decision of higher authorities while discharging the quasi judicial powers vested in the Act is wholly misplaced. The query has been raised at the time of assessment of Bills of Entry. The superior authority i.e. the Principal Commissioner of Customs (Preventive) has denied the duty benefit under DFIA Licenses and has conveyed the same through Joint Commissioner of Customs (Preventive). The Principal Commissioner of Customs (Preventive) has also directed the appellant to pay applicable customs duty for clearance of goods. He further submits that Revenue has relied upon several case laws on the question of whether it is binding on the assessing officer which was cited below:
(1) Madras Steel Re-Rollers Association vs UOI 2017 (217) ELT 167 (Mad)
7.2 The case law cited by the respondent has no application as in the said matter, the issue relates to circular issued by CBEC modifying its previous circular with respect of classification of goods. In the instant case, the Commissioner of Customs (Preventive), Jamnagar has taken a decision rejecting the DFIA benefits to the appellant recording reasons for rejection. Therefore, the contention that the assessing officer is required to exercise independent mind and without impartiality and while doing so and take decision considering various documents present before him in totally misplaced. He submits that the Commissioner is a superior authority who has taken a decision in the above case after examining all the documents submitted by the appellant.
8. As regard merit of the case he submits that the DGFT in Meeting No. 16/85 ALC 3/2013 dated 31.10.2013 has clarified that vital Wheat Gluten/Gluten Flour is used in the manufacturing of biscuits of protein enriched biscuits and further state that the representative of Ministry of Food Processing Industry (MFPI) has clarified that ‘wheat gluten Amygluten 160 is also a type of ‘Wheat Gluten Flour’. The Ministry of Food Processing Industry vide letter dated 31.10.2013 has clarified that in view of technical book of references, The Food and Safety Standards Act, 2006 and technical opinion given by the MSME-Development Institute, it shows that Vital wheat gluten/gluten flour is used in the manufacturing of biscuits or protein enriched biscuits. He submits that DGFT clarifications on licensing matters are final and binding on all including customs authorities. In this regard he placed reliance on the judgment of Hon’ble Tribunal (Bangalore) in the case of Commissioner of Customs, Hyderabad Vs. Goel Enterprises reported in 2005 (179) ELT 509 (Tri-Bang). He further submits that institute of Chemical Technological, Mumbai and IIT Kharagpur in their technical opinions has clarified that ‘wheat gluten flour’ or ‘vital wheat gluten’ can be used as a flour in combination with other flour (rye flour, soya flour, all-purpose flour in parts) for bread and biscuits, which are rich in protein content and required texture. The said expert opinion given by technically qualified person from a reputed institute like IIT Kharagpur cannot be brushed aside unless such technical opinion is disbelieved by specific and cogent evidence. On this issue he placed reliance on the following judgments:-
