Case Law Details
USMS Saffron Co Inc Vs Commissioner of Customs (Export)(CESTAT Mumbai)
USMS Saffron Co Inc vs. Commissioner of Customs (Export)(CESTAT Mumbai) involves a complex dispute regarding the import of saffron under duty exemption licenses issued under the Foreign Trade Policy (FTP). Here’s a detailed summary of the case:
The appellant, USMS Saffron Co Inc, imported saffron using Duty Free Import Authorization (DFIA) licenses intended for goods under chapters 32 or 33 of the ITC (HS) Code of the FTP. The Customs department contended that saffron, classified under heading 0910 2090 of the Customs Tariff Act, did not qualify for duty exemption under notifications 40/2006-Cus and 98/2009-Cus. These notifications granted exemptions subject to conditions specified in the FTP.
The dispute centered on whether the saffron imported by USMS Saffron Co Inc was eligible under the DFIA licenses. The Customs authorities argued that the saffron was not utilized in the manufacture of the exported products (biscuits and assorted confectionery) as required by the Standard Input Output Norms (SION). They alleged that the imports violated the conditions of the DFIA licenses by not adhering to the ‘actual use’ requirements specified in the SION.
The adjudicating authority upheld the Customs department’s contention, asserting that the ‘actual use’ condition applied even after fulfilling export obligations. They invoked Section 111(o) of the Customs Act, 1962, which allows confiscation of goods exempted from duty if conditions of the exemption are not observed. The authority emphasized that the saffron was not used as a food flavor or color in the exported goods, contrary to the conditions specified in the DFIA licenses.
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