Global Exim Vs Commissioner of Customs (CESTAT Kolkata)
The CESTAT Kolkata allowed the appeal challenging the denial of exemption under Customs Notification No. 25/2023-Cus on imports made against a transferable Duty-Free Import Authorization (DFIA). The appellant, a partnership firm, imported 27 metric tons of citric acid and claimed exemption from Basic Customs Duty on the strength of a transferable DFIA issued on a post-export basis against exports of assorted confectionery products under Standard Input Output Norm (SION E-1). However, the customs authorities denied the exemption, reassessed the Bill of Entry at merit rates, and rejected the appellant’s request for reassessment. After the Commissioner (Appeals) upheld the assessment order, the appellant approached the Tribunal.
The appellant contended that the DFIA was a post-export transferable authorization and, unlike the Advance Authorization Scheme, did not carry an inbuilt actual user condition. It argued that the actual user condition had been imposed through DGFT Public Notice No. 41 dated 02.11.2016 rather than by a notification issued in the Official Gazette. The appellant relied on judicial decisions, including those of the Rajasthan High Court and the Supreme Court, to submit that policy changes imposing obligations through a public notice were invalid in the absence of a notification published in the Official Gazette. It also relied on decisions holding that the Tribunal has jurisdiction to examine the validity of subordinate legislation and that no actual user condition applies to transferable DFIAs issued on a post-export basis. The appellant further sought directions for issuance of a certificate to the DGFT to facilitate revalidation of DFIAs that had expired during the pendency of the dispute.
