In re Devoir Trading Limited (CAAR Mumbai)
The Customs Authority for Advance Rulings (CAAR), Mumbai, in In re Devoir Trading Limited, ruled that the import of Inshell Walnuts under valid transferable Duty Free Import Authorisations (DFIAs) could qualify for exemption from Basic Customs Duty (BCD) under Notification No. 25/2023-Customs dated 1 April 2023, subject to fulfilment of the applicable statutory and authorisation conditions. The applicant proposed importing inshell walnuts for trading against transferable DFIAs issued following exports of assorted confectionery products, biscuits, vegetable pickles and namkeens, mixtures or savouries under SION E-1, E-5, E-126 and E-132. The applicant sought clarification on whether percentage-based CIF value restrictions and actual-user conditions introduced through DGFT Public Notice No. 41/2015-2020 dated 2 November 2016 could restrict the exemption. It argued that these restrictions affected substantive benefits under the DFIA Scheme and could not be enforced merely through a public notice without the legally prescribed notification process.
The Authority examined the relevant provisions of the Foreign Trade Policy, 2023, particularly Paragraphs 4.12, 4.24, 4.26, 4.28 and 4.29, along with the conditions of Notification No. 25/2023-Customs and CBIC Circular No. 20/2025-Customs dated 24 July 2025. It observed that inshell walnuts could fall within generic input descriptions such as fruit, flavour and dietary fibre under the relevant SIONs, as recognised in earlier decisions involving VKC Nuts Pvt. Ltd. However, the imported goods must correspond to the input description endorsed in the particular DFIA, and the prescribed quantity, value, validity and other authorisation requirements must be satisfied. The Authority also relied on Nrapen Shankar Acharya v. Union of India (Rajasthan High Court), Frunuts Exim LLP v. Commissioner of Customs (CESTAT Mumbai) and Global Exim v. Commissioner of Customs (CESTAT Kolkata). These decisions established that an actual-user condition or percentage-based CIF value cap affecting DFIA entitlements could not acquire independent legal enforceability merely through a public notice where the applicable legal framework required a notification issued through the prescribed statutory process.
Accordingly, the CAAR held that percentage-based CIF value restrictions and actual-user conditions introduced solely through the disputed DGFT public notice could not independently justify denial of the exemption under Notification No. 25/2023-Customs. The Authority clarified that its finding did not remove the obligation to comply with the express conditions of the exemption notification or the description, quantity, value and validity limits specified in the individual DFIA. Therefore, Devoir Trading Limited was entitled to claim the Basic Customs Duty exemption on eligible imports of inshell walnuts under transferable DFIAs issued against the relevant SIONs, provided all applicable conditions were fulfilled. The ruling distinguished restrictions imposed solely through an unenforceable public notice from binding requirements contained in the governing notification, Foreign Trade Policy and authorisation.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY FOR ADVANCE RULINGS, MUMBAI
M/s Devoir Trading Limited (IEC No. 0307001873) (hereinafter referred to as ‘the Applicant’) filed an application (CAAR-1) for advance ruling in the Office of Secretary, Customs Authority for Advance Ruling (CAAR) Mumbai. The said applications were received in the secretariat of the CAAR, Mumbai on 17.08.2026 along with its enclosures in terms of Section 28H (1) of the Customs Act, 1962 (hereinafter referred to as the ‘the Act’). The Applicant is seeking an advance ruling under Section 2811 (2) of the Customs Act, 1962 on questions relating to the Notification No. 25/2023-Cus dated 01.04.2023
2. Question(s) on which Advance Ruling is required:
“Whether the Applicant is entitled to claim Exemption from payment of Basic Customs Duty against CustomNotification No. 25/2023-Cus dated 01.04.2023 for their import of Inshell Walnuts under Transferable DMA issued against Export of Assorted confectionary goods, Export of Biscuits/Export of Vegetable Pickles and Export of Namkeens/Mixtures/Savouries for import of various Food Ingredients without value cap restriction for the inputs where the CIF value on percentage basis as per respective SIONs in the light of Hon’ble High Court of Rajasthan (Jodhpur Bench) and decisions of Hon’ble Coordinate bench of Mumbai & Kolkata?
3. Applicant’s eligibility for Advance Ruling:
The applicant holds a valid IEC No. 0307001873 and therefore qualifies as an “applicant” under Section 28E(c) of the Customs Act’ 1962. The question on which the advance ruling is sought is in respect of claim Exemption from payment of Basic Customs Duty against Custom Notification No. 25/2023-Cus dated 01.04.2023 which is admissible under Section 28H (2). The applicant has declared that no proceedings involving the same issue are pending before any Customs authority, Appellate Tribunal or any Court of Law. Accordingly, the application appears admissible under Section 28-I (2) of the Customs Act, 1962.
4. Applicant’s Submissions:
Statement of relevant facts having a bearing on the question(s) on which advance ruling is required
4.1 The applicant is proposed to import of Inshell Walnuts for trading by availing exemption from payment of exemption from payment of basic customs duty under Notification No. 25/2023-Cusdated 01.04.2023 on the strength of transferable Duty Free Import Authorisations (DFIA) issued in terms of the provision of Para 4.24 and 4.26 of Foreign Trade Policy-2023 read with Para 4.53 of 1113P against Export of Assorted Confectionary Products as per (SION E-1); Export of Biscuits (SION E5); Export of Vegetable Pickles (SION E-126) and Export of Namkeens/Mixtures/Savouries (SION E-132) without Actual user condition and value cap restrictions in the light of decision of Hon’ble High Rajasthan High Court and decisions of Co-ordinate bench of Hon’ble Appellate Tribunal, Mumbai and Kolkata.
4.2 The applicant seeks to claim exemption from payment of Basic Customs duty (BCD), under Notification No. 25/2023-Cus dated 01.04.2023 against their proposed import of Inshelll Walnuts against valid Transferable Duty Free Import Authorisations (DFIAs) issued by Regional Authority issued in terms of Paragraph 4.24 and Paragraph 4.26 of Foreign 1 rade717,tyhey without value cap restriction for the inputs where the CIF value on percentage basis is restricted in the DFIA and also without actual user condition wherever it is endorsed in the DFIA’s.
4.3 The relevant Custom Notification No. 25 of 2023-Cus dated 01.04.2023 was issued in exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) granting exemption to materials imported in India against a valid Duty Free Import Authorisation issued by Regional Authority from whole of Customs duty.
4.4. The said Exemption of 13CD is granted under Section 25 (1) of Customs Act, 1962 subject to conditions specified which is reproduced as under: –
A. The Notification No. 25/2023-Cus dated 01.04.2023; as amended from time to time, exempts materials imported into India against a valid Duty Free Import Authorisation issued by the Regional Authority in terms of paragraphs 4.24 and 4.26 of the Foreign Trade Policy (hereinafter referred to as the said authorisation) from the whole of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), subject to the following conditions, namely: –
B. that the said authorisation is produced before the proper officer of customs at the time of clearance for debit;
C. that Standard Input Output Norms (SION) number, description, quantity and Free on Board value of the resultant product exported and the shipping bill number(s) and date(s) are endorsed on the said authorization:
Provided that the said SION does not prescribe the actual user condition;
d. that the description and other specifications wherever applicable, value and quantity of materials imported are mentioned in the said authorisation and the value and quantity thereof are within the limits specified in the said authorization:
Provided that in respect of inputs referred in paragraphs 4.12(i) and 4. 12(ii) of the li’oreign Trade Policy, the material permitted to be imported in the said authorisation shall be of the specific name/description or quantity, respectively, as the material used in the export of the resultant product. The exporter shall declare these particulars of materials used in the shipping bill/bill of export:
Provided further that in respect of resultant products requiring inputs specified in paragraph 4.30 of the Foreign Trade Policy, the materials permitted in the said authorisation shall be of the same quality, technical characteristics and specifications as the materials used in the said resultant product. The exporter shall declare these particulars of materials used in the shipping bill or bill of export;
(iii) that the said authorisation shall be transferable subject to such conditions as may he specified
4.5 The applicant proposes to purchase Transferable DFIAs issued against the following export procudts as per Standard Inputoutput Norms (SION) to claim duty free entitlements for their proposed import of “Inshell Walnuts” without value cap restrictions and Actual user conditions.
i. Export of Assorted Confectionary Products as per SION E-1 covered by the description of `Other Confectionery’ (Serial No. 7 of SION E-1);
ii. Export of Biscuits as per SION E-5 covered by the description of Dietary Fibre (Sr. No. 4(viii) and Food Flavour/Flavouring Agent; (Sr. No. 4(iii) of SION E-5);
iii. Export of Vegetable Pickles as per SION E-126 covered by the description of Relevant Food Additives (Sr. No. 2 of SION E-126);
iv. Export of Namkeens/Mixtures/Savouries as per SION E-132 covered by the description of Relevant Flavour-, (Sr. No. 4 of SION E-132);
Value Cap Restrictions & Actual user condition in respective SIONs)
i. Export of Confectionary Goods (SION E-1);
Note 2: CIF Value of input SI. No. 5 shall not exceed 5% of the total CIF value of the Authorisation;
Note 3: CIF value of input item SI. No. 6 shall not exceed 3% of the total CIF value of the Authorisation;
Note 4: CIF value of input item Si. No. 7 shall not exceed 2% of the total CIF value of the Authorisation;
Note 5: Input item SI. No. 2, 3 and 4 are subjected to actual user condition.
The applicant proposes to import Inshell Walnut covered by Other confectionary ingredients without condition as mentioned under Note No. 4 of SION E-1.
i. Export of Biscuits (SION E-5)
Note 2: CIF value of input item SI. No. 4 together shall not exceed 10% of total CIF value of the Authorisation.
The applicant proposes to import Inshell Walnut covered by description of Dietary Fibre (Sr. No. 4(iii)) and Food Flavour/Flavouring Agent; (Sr. No. 4(iii) of SION E-5) without condition as mentioned under Note No. 2 of SION E-5.
ii. Export of Vegetable Pickles in Oil/Mixed Pickles in Oil (SION E 126)
Note 1: CIF Value of input item SI. No. 2 shall not exceed 3% of total CIF value of Authorisation
Note 2: CIF value of input item SI. No. 3 shall not exceed I% of the total CIF value 0f Authorisation.
The applicant proposes to import Inshell Walnut covered by description of Relevant Food Additives (Sr. No. 2 of SION E-126) without condition as mentioned under Note No. 1 of SION E-126.
(iv) Export of Namkeens/Mixtures/Savouries- (SION E-132)
Note 1: CIF value of input item Sl.No.3 shall not exceed 5% of total CIF value of the Authorisation.
Note 2: CIF Value of input item Sl. No.4 shall not exceed 3% of total CIF value of the Authorisation.
The applicant proposes to import Inshell Walnut covered by description of Relevant Flavour —, (Sr. No.4 of SION E-132) without condition as mentioned under Note No.2 of SION E-132.
4.6 The applicant, therefore, seeks an Advance Ruling on the applicability oNotification No. 25/2023-Cusdated 01.04.2023 since the importability of the said input without value cap restriction for the inputs where the CIF value on percentage basis is restricted in the DFIA and also without actual user condition as per respective SIONs under a Transferable NIA has a bearing on duty.
4.7 According to the applicant’s understanding, the applicant is exempted from payment of whole of customs duty under Transferable DFIAs issued as per respective SIONs as above under Notification No.25 of 2023 for their proposed import of `Inshell Walnuts’ covered by the description of ‘Other confectionary ingredients’ (Serial No.7 of SION E-1); Description of Food Flavour / Flavouring Agent (Sr. No. 4 (iii) of SION E-5); description of Food Additives (Sr. No. 2 of SION F126) and description of Relevant Flavour (Sr. No.4 of SION E-132) without value cap restriction for the inputs where the CIF value on percentage basis is restricted in the DNA and also without actual user condition wherever it is endorsed in the DFIA’s under a Transferable DFIA.
4.8 According to the applicant’s understanding, the question raised in the present Advance Ruling is fully covered by the decision of Hon’ble Rajasthan High Court vide Order dated 23.10.2024 in the case of Nrapen Shanker Acharya Vs. Union of India and followed by Coordinate bench of Cl STAT Mumbai in the case of Fruitnut Exim LLP V. Commissioner of Customs, Nhavasheva and by the Hon’ble CESTAT, Kolkata in the case of Global Exim Vs. Commissioner of Customs (Port), Kolkata.
4.9 The Advance Ruling, as sought under this application is given to the applicant, it would ensure clarity on the applicability of customs notification no. 25 of 2023 so as to enable the applicant to claim of exemption benefit which has a bearing on the rate of duty.
Statement containing applicant’s interpretation of law and/or facts, as the case may be, in respect of the question(s) on which advance ruling is iequired
4.10 The applicant submits that the Advance Ruling being sought under this application has a bearing on rate of duty. The applicant is exempted .from payment of whole of duty of Customs for imports made under a Transferable Duty Free Import Authorisation subject to fulfilment of conditions stipulated underNotification No. 25/2023-Cusdated 01.04.2023. However, the conditions of value cap restrictions as per respective SIONS issued against export of Confectionary Products, Biscuits, Vegetable Pickles and Namkeens/Mixtures & Savouries without value cap restriction for the inputs where the CIF value on percentage basis under a Transferable DFIA has a bearing on duty.
4.11 The applicant relies upon the Order and judgement dated 09.10.2018 of Hon’ble Madras High Court in the case of Maruti Udyog Ltd Vs. Commissioner of Customs Chennai holding entitlement of benefit of exemption notification being related to rate of duty can be decided only by Supreme Court under Section 130(1) of Customs Act, 1962.
4.12 Therefore being an issue related to entitlement to the benefit of exemption notification no. 25 of 2023 under Transferable DFIA which has a bearing on rate of duty, the Advance Ruling is being sought under this application before this Hon’ble Authority of Advance Ruling.
4.13 The applicant refers to the relevant paragraphs 4.24 and Paragraph 4.26 of FTP (2023) as mentioned in Customs Notification No. 25/2023-Cus dated 01.04.2023, which is reproduced below:
4.24 DI IA Scheme
i. Duty Free Import Authorisation is issued to allow dity five import of inputs. In addition, import of oil and catalyst which is consumed/utilised in the process of production of export product, may also be allowed
ii. Provisions of paragraphs 4.12, 4.18, 4.20, 4.21 and 4.23 of FIT shall be applicable to DMA also.
iii. Import of Tyre under DFIA scheme is not allowed.
4.26 Eligibility
i. Duty free Import Authorisation shall be issued on post export basis for products for which Standard Input Output Norms have been notified.
ii. Merchant Exporter shall be required to mention name and address of supporting manufacturer of the export product on the export document viz. Shipping Bill/Bill of Export/ Tax Invoice Ibr export prescribed under the GST rules.
iii. Application is to be filed with concerned Regional Authority before effecting export under Duty Free Import Authorisation.
iv. No Duty Free Import Authorisation shall be issued for an input which is subjected to pre-import condition or where SION prescribes ‘Actual User’ condition or Appendix-4J prescribes pre import condition for such an input.
The applicant would further refer to the following Paragrph 4.13 of FTP (2023) which is relevant for the present case.
4.13 Pre-import conditions in certain cases
i. DGFT may, by Notification, impose pre-import condition for inputs under this chapter
ii. Import items subject of pre-import condition are listed in Appendix-41 or will be indicated in Standard Inputoutput Norms (SION).
4.14 The primary condition of customs notification no. 25 of 2023, according to the understanding of the applicant, is that DMA should be produced before the proper officer of customs at the time of clearance and the Standard inputoutput Norms (SION number, description, quantity and free on board value of the resultant product exported and the shipping bill number(s) and date(s) are endorsed on the said authorisation. Condition (iii) of Notification no. 25 of 2023 inter alia stipulates that the description and other specifications, wherever applicable, value and quantity of materials imported are mentioned in the said authorisation and the value and quantity thereof are within the limits specified in the authorisation.
Therefore, in applicant’s understanding of the above provisions of notification makes it clear that the imported goods must be covered by the description, value and quantity as per DNA issued as per relevant SION.
4.15 Though the applicant was permitted to import goods within the overall CIF value mentioned in the authorisation, DGFT by way of a Public Notice No. 41/2016 dated 02.11.2016, inter alia, sought to impose value caps on various inputs agains Export of SION E-1, SION E-5, SION E-126 and SION E-132 and actual user condition against SI. No. 2, 3 and 4 against SION B-1.
4.16 However in a subsequent decision dated 22.10.2024 of Hon’ble Rajasthan High Court (Jodhpur) Bench, inter alia declared the said imposition of actual user condition and value cap has to be notified through a Notification and not by way of Public Notice.
4.17 The aforementioned decision was followed by the Hon’ble Tribunal (Mumbai) in the case of Frunut Exim LLP Vs. Commissioner of Customs Nhava Sheva in its Final Order No. 85184/2026 dated 27.01.2026 under Para 15 of the order, which is reporoduced below:
15. Thus, though the issue of generic’ ‘specific’ was not within the ken for denial ofex emption at the stage of assessment, we may follow the ratio set out supra to which we shall attend presently. Objection was also raised to the ‘intra description’ cap which was incorporated through public notice supra and, as pointed out by Learned Counsel, the Hon’ble High Court of Rajasthan, seized of the matter in Nrapen Shankar Acharya v. Union of India16, held therein that
‘6. Under Chapter 4 of the Duty exemption/remission scheme which enables duty free import of the inputs for export production including replenishment of inputs or duty remission, a detailed procedure has been laid down. The schemes thereunder consist of Advance Authorisations and Duty Free Import Authorisation; Duty Remission Scheme; Scheme .for Rebate of State and Central Taxes and Levies etc. Clause 4.03 deals with Advance Authorisation clause 4.05 talks of eligible applicant/export/supply. There are also provisions for the Self-Ratification Scheme (4.06), Value Addition (4.08) and Minimum Value Addition (4.09). The learned senior counsel appearing for the petitioner referred to clause 4.13 which provides for ‘Pre-import condition in certain cases” to support the prayer made under clause (i) of the present writ petition. However, we are of the opinion that the pre-import condition for the inputs under Chapter 4 can be issued only by Ministry of Commerce and Industry subjecting the imports under appendix 4-J to pre-import condition. The expression “may” occurring under clause 4.13 has to be read in consonance with the powers of the Union of India to issue a Notification and the powers of DGET shall remain confined to issue a Notification under clause 4.13 only in tune with the Notification, if any, issued by the respondent no. 1 imposing pre-import condition for the inputs. As to imposition of Actual User Condition by way of public notice, this is well remembered that such an exercise shall also be touching upon the policy decision and, therefore, can he notified only through a Notification in the official Gazette.’
owing to which the said public notice of 2nd November• 2016 is invalid .for enforcement of stipulations therein.
16. Recently, in Viraj Impex. Pvt. Ltd. vs. Union of India & Anr. 12026 1NSC 80], the Hon’ble Supreme Court, taking note of the imperative in section 3 of Foreign Trade (Development & Regulation) Act, 1992 to hold that not only should such matters be notified but that effect can be had only upon publication of notification in the manner prescribed
17. There are no two ways about it. The cap, incorporated by public notice, has no validity in law. We do not intend to go so far as urged by (7/85635/2025 Learned Counsel Ibr holding the impugned public notice to be ultra vires, we do hold that to be inapplicable for restricting entitlement to import without payment of duty. The objection of value of imported ‘dried cranberry’ being in excess of the cap has no basis”
4.18 The aforementioned judgement was also followed by Hon’ble CFSTAT (Kolkotta) vide Final Order No. 75721/2026 dated 18 June 2026 in the case of Global Exim Vs. Commissioner of Customs (Port), Kolkotta. The findings of the Hon’ble Tribunal under Para 6 of the order fully supports the present case.
4.19 In view of the above and in the Applicant understanding DFIA’s issued against export of Confectionary Products/Biscuits/Vegetable Pickles/Namkeens/Mixtures/Savouries’ etc., on the basis of respective SION E-1, SION E-5, SION E-126 and SION E-132 imposing value cap on percentage basis on inputs as specified in the respective SION is untenable as held by Hon’ble Rajasthan High Court (Jodhpur Bench) and Hon’ble Appellate Tribunals, Mumbai & K.olkotta since the conditions were imposed through a Public Notice and not by way of Notification as per Paragraph 4.13 of the ITT (2023). Therefore, the applicant is entitled to import Inshell Walnut and eligible to calim exemption from Basic Customs Duty under the Custom Notification No. 25/2023-Cus dated 01.04.2023 without value cap restrictions and actual user condition.
5. Port of Import and reply from jurisdictional Commissionerate
The applicant vide email dated 29.08.2026 submitted that it intends to import the subject goods at the jurisdiction of the Office of the Commissioner of Customs, NS-I, JNCH, Nhava Sheva, Maharashtra – 400707. Accordingly, the application was forwarded to the concerned jurisdictional Commissionerate for furnishing their comments vide letter dated 02.09.2026. However, no comments have been received from the jurisdiction Commissionerate till dated.
6. Details of Personal Hearing:
A personal hearing in the matter was held on 04.09.2026. During the personal hearing, the Authorised representative/Advocates of the applicant argued that, in view of various judicial pronouncements, including the decision of the Hon’ble Rajasthan High Court, the percentage-based cap on the CIF value of inputs for import under DNA is not legally sustainable, as such restriction were sought to be imposed by Dail’ through Public Notice. The Authorised Representatives/Advocates requested some time to submit further documents and written submissions in support of their contentions.
7. Discussion and Findings
7.1 I have carefully considered the application, the submissions made by the Applicant, the documents placed on record, the provisions of the Foreign Trade Policy, 2023 (hereinafter referred to as FTP, 2023“), the relevant provisions of Notification No. 25/2023-Cus. dated 01.04.2023, the relevant SION provisions and the judicial decisions relied upon by the Applicant.
7.2 The issue for determination in the present application is whether the Applicant is entitled to avail the benefit of exemption from Basic Customs Duty under Notification No. 25/2023-Cus. dated 01.04.2023 in respect of import of Inshell Walnuts against transferable Duty-Free Import Authorisations (DFIAs) issued against the export products covered under SION E-1, E-5, E-126 and E-132.
7.3 The issue essentially involves two aspects. First, whether “Inshell Walnuts” are covered by the relevant input descriptions prescribed under the aforesaid SIONs and endorsed in the -corresponding DFIAs. Second, whether the percentage-based CIF value restrictions and the “Actual User” condition referred to by the Applicant can be enforced as a ground for denial of the exemption under Notification No. 25/2023-Cus., particularly where such restrictions have been introduced through Public Notice No. 41/2015-2020 dated 02.11.2016.
Whether “Inshell Walnuts” are covered under the relevant SION
7.4 I find that the Notification No. 25/2023-Cus. dated 01.04.2023 grants exemption from the whole of the customs duty leviable under the First Schedule to the Customs Tariff Act, 1975 on materials imported against a valid Duty-Free Import Authorisation issued by the Regional Authority in terms of paragraphs 4.24 and 4.26 of the Foreign Trade Policy, subject to fulfilment of the conditions prescribed therein. Therefore, the entitlement to exemption is required to be examined with reference to the terms and conditions of the said notification read with the applicable provisions of the Foreign Trade Policy and the relevant authorisation.
7.5 The relevant conditions of Notification No. 25/2023-Cus. dated 01.04.2023 provides that the authorisation is to be produced before the proper officer of Customs at the time of clearance for debit; that the SION number, description, quantity and F013 value of the resultant product exported and the relevant Shipping Bill number and date particulars are endorsed on the authorisation and that the description, value and quantity of the materials imported are within the limits specified in the authorisation. The Notification further provides that the relevant SION should not prescribe an actual user condition. The relevant conditions, as applicable to the present matter, are reproduced below:
N that the said authorisation is produced before the proper officer of customs at the time of clearance for debit;
i. that Standard Input Output Norms (SION) number, description, quantity and Free on Board value of the resultant product exported and the shipping bill number(s) and date(s) are endorsed on the said authorization:
Provided that the said SION does not prescribe the actual user condition;
ii. that the description and other specifications wherever applicable, value and quantity of materials imported are mentioned in the said authorisation and the value and quantity thereof are within the limits specified in the said authorization:
Provided that in respect of inputs referred in paragraphs 4.12(i) and 4.12(ii) of the Foreign Trade Policy, the material permitted to be imported in the said authorisation shall be of the specific name/description or quantity, respectively, as the material used in the export of the resultant product. The exporter shall declare these particulars of materials used in the shipping bill/bill of export:
Provided further that in respect of resultant products requiring inputs specified in paragraph 4.29 qf the Foreign Trade Policy, the materials permitted in the said authorisation shall be of the same quality, technical characteristics and specifications as the materials used in the said resultant product. The exporter shall declare these particulars of materials used in the shipping bill or bill of export;
iii. that the said authorisation shall he transferable subject to such conditions as may be specified;
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7.6 Further, I observe that the Para 4.24 of the FTP, 2023 provides for the DFIA Scheme, under which Duty-Free Import of input for products have been notified. Para 4.26 provides that DFIA shall be issued on post-export basis for products for which SION have been notified and that no DFIA shall be issued for an input where the SION prescribes an “Actula User” condition or where a pre-import condition applies. The relevant provisions are reproduced below:
4.24 DMA Scheme
i. Duty Free Import Authorisation is issued to allow duty free import of inputs. In addition, import of oil and catalyst which is consumed/utilised in the process of production of export product, may also be allowed.
ii. Provisions of paragraphs 4.12, 4.18, 4.20, 4.21 and 4.23 of FTP shall be applicable to DMA also.
iii. Import of Tyre under DFIA scheme is not allowed.
4.26 Eligibility
i. Duty .free Import Authorisation shall be issued on post export basis for products .fbr which. Standard Input Output Norms have been notified.
ii. Merchant Exporter shall be required to mention name and address of supporting manufacturer of the export product on the export document viz. Shipping Bill/Bill of Export/ Tax Invoice for export prescribed under the GST rules.
iii. Application is to be filed with concerned Regional Authority before effecting export under Duty Free Import Authorisation.
iv. No Duty Free Import Authorisation shall be issued fbr an input which is subjected to pre-import condition or where SION prescribes ‘Actual User’ condition or Appendix-4J prescribes pre import condition for such an input.
7.7Para 4.12 of the VIP, which is applicable to DNA, provides that wherever SION permits use of a generic or alternative input, the specific input together with the quantity used in manufacture of the export product is required to be indicated/endorsed in the relevant Shipping Bill and the name/description of the input used or to be used in the Authorisation is required to match the description endorsed in the Shipping Bill. The relevant provisions are reproduced below: s
4.12 Accounting of Input
i. Wherever SION permits use of either (a) a generic input or (b) alternative input, unless the same of the specific input together with quantity (which has been used in manufacturing the export product] gets indicated/endorsed in the relevant shipping bill and these inputs, so endorsed, within quantity specified and match the description in the relevant bill of entry, the concerned Authorisation will not be redeemed. In other words, the name/description of the input used (or to be used) in the Authorisation must match exactly with the name/description endorsed in the shipping bill.
(ii) In addition, if in any SION, a single quantity has been indicated against a number of inputs (more than one input), then quantities of such inputs to be permitted for import shall be in proportion to the quantity of these inputs actually used/consumed in production, within overall quantity against such group of inputs. Proportion of these inputs actually used/consumed in production of export product shall be clearly indicated in shipping bills.
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7.8 I also find it relevant to refer to para 4.29 pf theFTP, 2023 concerning sensitive inputs under I)FIA. The said provision requires declaration of technical characteristics, quality and specifications in the Shipping Bill in respect of specified sensitive inputs and requires the Regional Authority to mention such particulars in the Authorisation. Thus, the requirement of establishing correlation of technical characteristics, quality and specification is specifically provided in respect of the inputs covered under Para 4.29. The relevant provision reads as under:
4.29 Sensitive terms under Duty Free Import Authorisation
(a) In respect of following inputs, exporter shall be required to provide declaration with regard to technical characteristics, quality and specification in Shipping Bill:
“Alloy steel including Stainless Steel, Copper Alloy, Synthetic Rubber, Bearings, Solvent. Perfumes / Essential Oil/ Aromatic Chemicals, Surfactants, Relevant Fabrics, Marble, Articles made of Polypropylene, Articles made of Paper and Paper Board, Insecticides, Lead Ingots, line Ingots, Citric Acid, Relevant Glass fibre reinforcement (Glass fibre, Chopped / Stranded Mat, Roving Woven Surfacing *Mat), Relevant Synthetic Resin (unsaturated Polyester Resin, Epoxy Resin. Vinyl Ester Resin, Hydroxy Ethyl Cellulose), Lining Material”.
(b) While issuing Duty Free Import Authorisation, Regional Authority shall mention technical characteristics, quality and specification in respect of above inputs in the Authorisation.
7.9 Further, since the Applicant proposes to import the subject goods against transferable DFIAs, Para 4.28 of the PCP, 2023 is also relevant. In terms of Para 4.28(iv), wherever the SION permits use of a generic or alternative input, the specific input together with the quantity actually used in the manufacture of the export product is required to be indicated/endorsed in the relevant Shipping Bill/Bill of Export, and only such input is permitted for import under the DFIA within the overall quantity prescribed against such generic or alternative input. The said provision is therefore relevant for determining the scope of the input permitted under a DEA where the applicable SION contains a generic or alternative input description. The relevant portion is reproduced as under:
4.28 Validity & Transferability of DFIA
(I) Applicant shall file online application to Regional Authority concerned before starting export under DMA.
(ii) Export shall be completed within 12 months from the dale of online ,filing of application and generation of file number.
(iii)While doing export/supply, applicant shall indicate file number on the export /supply documents viz. Shipping Bill/ Bill of Export/Tax invoice for supply prescribed under GST rules.
iv. In terms of Para 4.12 ofF7’P, Wherever SION permits use of either (a) a generic input or (b) alternative input, the specific input together with quantity /which has been used in manufacturing the export product] should be indicated / endorsed in the relevant Shipping Bill/ Bill of Export. Tax invoice for supply prescribed under GST rules. Only such inputs may be permitted for import in the authorisation in proportion to the quantity of these inputs actually used/consumed in production, within overall quantity against such generic input/alternative input.
v. In addition, if in any SIO1V, a single quantity has been indicated against a number of inputs (more than one input), then quantities of such inputs, to be permitted for import shall be in proportion to the quantity of these inputs actually used/consumed in production and declared in Shipping Bill/Bill of Export /Tax invoice for supply prescribed under GST rules within overall quantity against such group of inputs. Proportion of these inputs actually used/consumed in production of export product shall be clearly indicated in Shipping Bill / Bill of Export / Tax invoice for supply prescribed under GIST rules.
vi. Separate DFIA shall he issued for each SION.
vii. Exports under DFIA shall be made from any port listed in Para 4.35 of Handbook of Procedures. However, separate application shall be made for EDI and non-EDI ports. In case export is made from a non-EDI port, separate application shall he-made for each non-EDI port.
(viii) Regional Authority shall issue transferable DFIA with a validity of 12 months from the date of issue. No further revalidation shall be granted by Regional Authority.
7.10 On a conjoint reading of the aforesaid provisions, it is evident that the DFIA Scheme permits duty-free import of inputs in accordance with the applicable SION and the conditions prescribed under the FIT, 2023 and the relevant exemption notification. Where the SION permits a generic or alternative input, the specific input and the quantity used in the manufacture of the resultant export product are required to be declared in the Shipping of Export, and the description of such input in the Authorisation is required to correspond with the declaration made in the export documents. At the same time, the requirement of declaration and correlation of technical characteristics, quality and specifications is specifically prescribed for the sensitive inputs covered under paragraph 4.29 of the FTP, 2023.
7.11 This position has also been clarified by CBIC vide Circular No. 20/2025-Cus. dated 24.07.2025, wherein it has been clarified that only in respect of inputs specified in paragraph 4.29 of theFTP, 2023, correlation of technical characteristics, quality and specification of the inputs with the export product is required to be established under the DFIA Scheme. In respect of inputs covered by paragraphs 4.12 and 4.28(iii), only the name of the specific input along with the quantity is required to be declared in the Shipping Bill/Bill of Export, and declaration of technical characteristics, quality and specifications of the inputs used in manufacture of the export product is not required. The relevant clarification is reproduced below:
“5. The position is thus clear that only in respect of inputs specified in paragraph 4.29 of the Foreign Trade Policy, 2023, a correlation of technical characteristics, quality and specification of the inputs with the export product is required to be established under the DFIA Scheme. Such correlation is not required to be established in case of other inputs.
6. It is, therefore, clarified that: –
i. Only in case of import of inputs mentioned in paragraphs 4.29 of the FTP, 2023, correlation of technical characteristics, quality and specification of the inputs with the export product is required to be established when imported under the DMA Scheme.
ii. In case of inputs mentioned in paragraphs 4.12 and 4.28(iii) of theFTP, 2023, only name of the specific input along with the quantity is required to be declared in the shipping bill/bill of export. Declaration of technical characteristics, quality and specification of the inputs used in the manufacture of the export product is not required:”
7.12 The Applicant proposes to import “Inshell Walnuts” against transferable DFIAs issued against exports covered under SION E-1, E-5, E-126 and E-132. The relevant input descriptions relied upon by the Applicant arc as follows:
i. SION E-1: Export of Assorted Confectionary Products covered by the description of “Other Confectionery” at Serial No. 7;
ii. SION E-5: Export of Biscuits covered by the description of “Dietary Fibre” at Serial No. Page 13 of 21
4(viii) and “Food Flavour/Flavouring Agent” at Serial No. 4(iii);
iv. SION E-126: Export of Vegetable Pickles covered by the description of “Relevant Food Additives” at Serial No. 2;
v. SION E-132: Export of Namkeens/Mixtures/Savouries covered by the description of “Relevant Flavour” at Serial No. 4.
7.13 The issue whether “Inshell Walnuts” can be considered against the relevant input descriptions under the DNA Scheme has already been examined by the CESTAT. In VKC Nuts Pvt. Ltd. v. C.C.-Jamnagar (Prey.), Final Order No. A/11365/2020 dated 08.12.2020, the Tribunal considered the entitlement to DFIA benefit in respect of import of Inshell Walnuts against SION E-5 under descriptions including Fruit/Food Flavour/Dietary Fibre. The Tribunal also took note of the earlier decision of CESTAT, Mumbai in VKC Nuts Pvt. Ltd. v. Commissioner of Customs, Nhava Sheva, Final Order No. A/85730/2020 dated 11.09.2020. The Tribunal thereafter held:
“12. We are convinced with the appellant’s submission that Chapter Heading 08020000 is the main chapter heading which covers the items of import under the said heading. Therefore, the input item Inshell Walnut is correctly covered under the description of goods under Fruit/Flavour/Dietary Fibre as mentioned in the annexures annexed along with the DFIA’s in question.
17. … …. The present case is on a better footing that the `Inshell Walnut’ is not only capable of being used but invariably used for manufacture of biscuits as fruit/flavor/dietary fibre. This has been held in appellant’s own case by the Hon’ble CESTAT-Mumbai in Final Order No: A/85730/2020 dated 11.09.2020. Moreover, as per the custom’s lab report dated 08.08.2018 and various technical opinions as discussed above, the Inshell Walnut is used as flavor or fruit/nut or dietary fibre in the manufacture of biscuits/cookies and confectionary. Therefore, there is no dispute that inshell walnut is correctly covered under the description of goods i. e, fruit/flavour/dietary fibre as mentioned in the annexures annexed along with. DFIA Scheme as well as specified in SION.
7.14 The aforesaid decision is directly relevant to the issue under consideration. The Tribunal, after examining the nature and classification of Inshell Walnuts under Chapter Heading 0802, held that the goods were correctly covered by the generic input descriptions such as Fruit/Flavour/Dietary Fibre specified in the I)FIA. The decision therefore recognizes that where the relevant SION provides for a generic input description, the mere absence of the exact commercial description “Inshell Walnuts” in the SION would not exclude the goods from the scope of such description. The applicability of the generic input description is required to be examined with reference to the nature and classification of the goods and the specific input description endorsed in the relevant DMA.
7.15 I also find that a similar view taken by this Authority in earlier rulings in M/s KS. Enterprises, CAAR/Mum/ARC/28&29/2025-26, wherein it was held that where the goods sought to be imported are non-sensitive inputs, i.e. inputs not specified under Para 4.29 of theFTP, 2023 fall within the specific description of goods mentioned in the relevant SION and erfdorsed in the 1)1 IA, are not covered under Appendix 4J of the Handbook of Procedures and are within the value and quantity limits specified in the authorisation, the benefit of exemption under Notification No. 25/2023-Cus. dated 01.04.2023 is available under transferable DNA, subject to compliance with the conditions prescribed under the said Notification, theFTP, 2023, the relevant SION and the MIA. The relevant portion of the said ruling is reproduced below:
“9.21 In light of the above facts, discussions and observation, my views on the questions raised by the applicant are as under:
Q.1 “Whether the applicant is entitled to claim Exemption from payment of Basic Customs Duty against Custom Notification No. 25/2023-Cus dated 01.04.2023 for their import of Inshell Walnuts under Transferable DFIA issued against Export of Assorted confectionary goods, Export of Biscuits/Export of Vegetable Pickles and Export of Namkeens/Mixtures/Savouries without showing the actual use, in the export goods?
Ans. I answer in the affirmative that where the goods sought to be imported are non-sensitive inputs (not specified under Para 4.29 of the FTP, 2023); fall within the specific description of goods mentioned in the relevant SION norms and endorsed in the DPIA license; are not covered under Appendix 4J of the Handbook of Procedures; and are within the value and quantity limits specified in the authorisation; the exemption benefit under Notification No. 25/2023-Cus dated 01.04.2023 is available to the applicant under transferable DEJA, subject to strict compliance with the conditions prescribed therein read with the Foreign Trade Policy, relevant SION norms and the DFIA license; and any deviation from conditions including violation of actual user condition, wherever applicable, would render the benefit inadmissible.
7.16 I further find that the above same view taken by this authority in the earlier ruling in the case of M/s Proventus Agrocom Pvt. Ltd., CAAR/Mum/ARC/30/2025-26.
7.17 In view of the foregoing discussion and the judicial precedent referred to above, I find that “Inshell Walnuts” can be considered against the relevant input descriptions under SION E-1, E-5, F126 and E-132, subject to the description of the input endorsed in the particular DFIA and fulfilment of all other applicable conditions of Notification No. 25/2023-Cus. dated 01.04.2023, the FTP, 2023, the relevant SION and the DMA. Accordingly, the individual DMA remains material for determining the specific description, quantity and value of the goods permissible for import and the availability of the exemption benefit.
Whether percentage-based CIF value restrictions and “Actual User” condition can be enforced
7.18 The second issue for consideration relates to the percentage-based CIF value restrictions prescribed in the relevant SIONs. The Applicant has referred to the following value cap restrictions:
i. SION E-1: Note 4 provides that the CIF value of input item at SI. No. 7 shall not exceed 2% of the total CIF value of the Authorisation;
ii. SION E-5: Note 2 provides that the CIF value of input item at Si. No. 4 together shall not exceed 10% of the total CIF value of the Authorisation;
iii. SION E-126: Note 1 provides that the CIF value of input item at Si. No. 2 shall not exceed 3% of the total CIF value of the Authorisation;
iv. SION E-132: Note 2 provides that the CIF value of input item at Si. No. 4 shall not exceed 3% of the total CIF value of the Authorisation.
The Applicant has contended that the aforesaid percentage-based restrictions as well as the “Actual User” condition, were introduced through Public Notice No. 41/2015-2020 dated 02.11.2016 and cannot be enforced to deny the benefit of Notification No. 25/2023-Cus.
7.19 In considering this contention, it is necessary to examine the legal source through and authority under which the aforesaid restrictions and conditions were introduced and whether such conditions, having the effect of restricting or curtailing the substantive entitlement under the DMA Scheme, can be enforced merely on the basis of a Public Notice.
7.20 In this regard, the Hon’blc Rajasthan High Court in Nrapen Shankar Acharya v. Union of India, D.B. Civil Writ Petition No. 17806/2024, order dated 23.10.2024, examined the legal effect of conditions sought to be imposed through a public Notice. The relevant observation of the Hon’blc High Court are reproduced as below:
“6. Under Chapter 4 of the Duty exemption/remission scheme which enables duty free import of the inputs for export production including replenishment of inputs or duty remission, a detailed procedure has been laid down. The schemes thereunder consist of Advance Authorisation and Duty Free Import Authorisation; Duty Remission Scheme; Scheme for Rebate of State and Central Taxes and Levies etc. Clause 4.03 deals with Advance Authorisation and clause 4.05 talks of eligible applicant/export/supply. There are also provisions for the Self- Ratification Scheme (4.06), Value Addition (4.08) and Minimum Value Addition (4.09). The learned senior counsel appearing fbr the petitioner referred to clause 4.13 which provides for “jive- import condition in certain cases” to support the prayer made under clause (i) of the present writ petition. However, we are of the opinion that the pre-import condition for inputs under Chapter 4 can be issued only by the Ministry of Commerce and Industry subjecting the import items under .appendix 4-3 to pre-import condition. The expression “may” occurring under clause 4.13 has to be read in consonance with the powers of the Union of India to issue a Notification and the powers of DGFT shall remain confined to issue a Notification under clause 4.13 only in tune with the Notification, if any, issued by the respondent no.1 imposing pre- import conditions for inputs. As to imposition of Actual User Condition by way of public notice, this is well remembered that such an exercise shall also be touching upon the policy decision and, therefore, can be notified only through a Notification in the official Gazette.”
7.21 The aforesaid principle was subsequently considered in the context of DMA Scheme by CES’l’AT, Mumbai in Frunuts Exim LLP v. Commissioner of Customs, Nhava Sheva, Final Order No. 85184/2026 dated 27.01.2026. The Tribunal, while considering the validity of the “intra-description” value cap incorporated through Public Notice No. 41/2015-2020 dated 02.11.2016, took note of the aforesaid judgment of the Hon’ble Rajasthan High Court and observed as under:
15. Thus, though the issue of ‘generic’ vis-a-vis ‘specific’ was not within the ken for denial of exemption at the stage of assessment, we may follow the ratio set out supra to which we shall attend presently. Objection was also raised to the ‘intra description’ cap which was incorporated through public notice supra and, as pointed out by Learned Counsel, the Hon’ble High Court of Rajasthan,veized of the matter in Nrapen Shankar Acharya v. Union of India] 6, held therein that
6. Under Chapter 4 of the Duty exemption/remission scheme which enables duty free import of the inputs fir export production including replenishment of inputs or duty remission, a detailed procedure has been laid down. The schemes thereunder consist of Advance Authorisations and Duty Free Import Authorisation; Duty Remission Scheme; Scheme for Rebate of State and Central Taxes and Levies etc. Clause 4.03 deals with Advance Authorisation clause 4.05 talks of eligible applicant/export/supply. Mere are also provisions for the Seff-l?atification Scheme (4.06), Value Addition (4.08) and Minimum Value Addition (4.09). The learned senior counsel appearing for the petitioner referred to clause 4.13 which provides for “pre-import condition in certain cases” to support the prayer made under clause (i) of the present writ petition. However, we are of the opinion that the pre-import condition for the inputs under Chapter 4 can be issued only by Ministry of Commerce and Industry subjecting the imports under appendix 4-.1 to pre-import condition. The expression “may” occurring under clause 4.13 has to be read in consonance with the powers of the Union of India to issue a Notification and the powers of DGFT shall remain confined to issue a Notification under clause 4.13 only in tune with the Notification, if any, issued by •the respondent no. 1 imposing [order dated 23rd October 2024 in DB CWP no. 17806/20241 C/85635/2025 pre-import condition for the inputs. As to imposition of Actual User Condition by way of public notice, this is well remembered that such an exercise shall also be touching upon the policy decision and, therefore, can be notified only through a Notification in the official Gazette.
owing to which the said public notice of 2nd November 2016 is invalid fir enforcement of stipulations therein.
16. Recently, in Viraj Impex Pvt. Ltd. vs. Union of India & Anr. [2026 INSC 80], the Ilon’ble Supreme Court, taking note of the imperative in section 3 of Foreign Trade (Development & Regulation) Act, 1992 to hold that not only should such matters be notified but that effect can he had only upon publication of notification in the manner prescribed
17. There are no two ways about it. The cap, incorporated by public notice, has no validity in law. We do not intend to go so far as urged by C/85635/2025 Learned Counsel for holding the impugned public notice to be ultra vices, we do hold that to be inapplicable for restricting entitlement to import without payment of duty. The objection of value of imported ‘dried cranberry’ being in excess of the cap has no basis in law.
7.22 The afoiesaid legal position was subsequently followed by CESTAT, Kolkata in Global aim v. Commissioner of Customs (Port), Kolkata, Final Order No. 75721/2026 dated 18.06.2026. The Tribunal ultimately while considering import under a transferable DMA, held as under:
“11. Therefore, we hold that mere Public Notice issued by DGPT, cannot impose the actual condition. In view of that, the actual condition is not binding on the appellant for the import made under DFIA, which was issued post export basis against the Export of Assorted Confectionary Products covered by Standard Input Output Norm. There:fore, the goods in question cannot be denied the benefit of exemption claimed by the appellant. Accordingly, the appellant is entitled for the consequential benefit thereof
19. In view of the above, it is concluded that imposing actual user condition through Public Notice is illegal and cannot be imposed on the appellant for import made under DFIAs and we direct the Department to issue a Certificate to the DGFT within a period of two weeks from the date of receipt of this order for the purposes of revalidation of licences under Paragraph 2.13.1 of the Handbook of Procedures.
7.23 The ratio emerging from the aforesaid judicial pronouncements is that a condition having the effect of restricting or curtailing the entitlement available under the DFIA Scheme, including an “Actual User” condition or percentage-based CIF value cap, cannot acquire independent legal enforceability merely by its incorporation through a Public Notice. The lIon’ble Rajasthan High Court in Nrapen Shanker Acharya held that an “Actual User” condition touching upon a policy decision can be imposed only through a Notification in the Official Gazette; the CESTAT, Mumbai in Runuts Exim LLP applied the said principle to the intra-description value cap introduced through Public Notice No. 41/2015-2020 dated 02.11.2016 and held that such cap could not be enforced for restricting the entitlement to duty-free import; and the CESTAT, Kolkata in Global Exim similarly held that an “Actual User” condition imposed merely through a Public Notice is not binding in respect of imports made under transferable DFIAs. Accordingly, where such restrictions or conditions derive their authority solely from the aforesaid Public Notice, they cannot constitute a valid ground for denial of the benefit otherwise available under the DFIA Scheme.
7.24 As regards the percentage-based CIF value restrictions, I find that the Applicant’s contention is not directed against the SION framework as such. Rather, the contention is that such restrictions cannot be independently enforced by Customs as a ground for denying the exemption under Notification No. 25/2023-Cus, where a valid DFIA has already been issued by the competent Regional Authority and the restriction sought to be applied derives solely form Public Notice No. 41/2015/2020 dated 02.11.2016.
7.25 It is material to note that Notification No. 25/2023-Cus. itself does not prescribe an independent percentage-based CIF value cap corresponding to the restrictions referred to by the Applicant. The notification requires, inter alia, that the imported material to be covered by the valid DFIA and that the description, value and quantity of the imported material be within the limits specified in the authorisation, subject to the conditions expressly prescribed therein.
7.26 Therefore, where a valid transferable DFIA has been issued by the competent Regional Authority and the imported goods correspond to the input description endorsed therein, a percentage-based value restriction introduced through the impugned Public Notice cannot, in view of the judicial pronouncements discussed above, be independently invoked by Customs for denying the exemption, insofar as such restriction is sought to be enforced solely on the strength of Public Notice.
7.27 I, however, find it necessary to clarify that the above finding does not dispense with the requirement that the imported goods must correspond to the description endorsed in the I)FIA, nor does it dispense with compliance with the quantity, validity and other particulars specified in the authorization or the express conditions of Notification No. 25/2023-Cus dated 01.04.2023. The finding is confined to the enforceability of the percentage-based CIF value restrictions and the “Actual User” condition insofar as the same are sought to be imposed merely on the basis of Public Notice No. 41/2015-2020 dated 02.11.2016.
Conclusion
7.28 In light of the foregoing facts, discussion and Iindim4, my views on the question raised by the applicant are as under:
Question: “Whether the Applicant is entitled to claim Exemption from payment of Basic Customs Duty against Custom Notification No. 25/2023-Cus dated 01.04.2023 for their import of Inshell Walnuts under Transferable DMA issued against Export of Assorted confectionary goods, Export of Biscuits/Export of Vegetable Pickles and Export of Namkeens/Mixtures/Savouries for import of various Food Ingredients without value cap restriction for the inputs where the CIF value on percentage basis as per respective SIONs in the light of Hon’ble High Court of Rajasthan (Jodhpur Bench) and decisions of Hon’ble Coordinate bench of Mumbai & Kolkotta?
Ans. In this regard, I find that the Hon’ble Rajasthan High Court in Nrapen Shankar Acharya v. Union of India D. 13. Civil Writ Petition No. 17806/2024, order dated 23.10.2024 observed as under:
6. ………. However, we are of the opinion that the pre-import condition for inputs under Chapter 4 can be issued only by the Ministry of Commerce and Industry subjecting the import items under appendix 4-3 to pre-import condition. The expression “may” occurring under clause 4.13 has to be read in consonance with the powers of the Union of India to issue a Notification and the powers of DGFT shall remain confined to issue a Notification under clause 4.13 only in tune with the Notification, if any, issued by the respondent no. I imposing pre- import conditions.* inputs. As to imposition of Actual User Condition by way olPublic notice, this is well remembered that such an exercise shall also be touching upon the policy decision and, therefore, can be notified only through a Notification in the official Gazette.”
The above observations indicate that a pre-import or actual-user condition affecting the entitlement under the DNA Scheme cannot be imposed merely through a Public Notice where the applicable legal framework requires such a condition to be imposed by a notification in the Official Gazette. The aforesaid legal position was subsequently considered by CESTAT, Kolkata in Global Exim v. Commissioner of Custom (Port), Kolkata, Final Order No. 75721/2026 dated 18.06.2026, wherein the Tribunal held as under:
19. In view of the above, it is concluded that imposing actual user condition through Public Notice is illegal and cannot be imposed on the appellant for import made under DFIAs and we direct the Department to issue a Certificate to the DGFT within a period of two weeks from the date of receipt of this order for the purposes of revalidation of licences under Paragraph 2.13.1 of the Handbook of Procedures.
Further, CESTAT, Mumbai, in Frunuts Exinz LLP v. Commissioner of Customs, Nhava Sheva, Final Order No. 85184/2026 dated 27.01.2026, while considering the judgment of the I lon’ble Supreme Court in Viraj Impex Pvt. Ltd. v. Union of India & Anr. [2026 INSC 80], observed as under:
16. Recently, in Viraj Impex Pvt. Ltd. vs. Union of India & Anr. [2026 INSC 80], the Hon’ble Supreme Court, taking note of the imperative in section 3 of Foreign Trade (Development .& Regulation) Act, 1992 to hold that not only should such matters be notified hut that effect can be had only upon publication of notification in the manner prescribed
17. There are no two ways about it. The cap, incorporated by public notice, has no validity in law. We do not intend to go so far as urged by C/85635/2025 Learned Counsel for holding the impugned public notice to be ultra vices, we do hold that to be inapplicable for restricting entitlement to import without payment of duty. The objection of value of imported ‘dried cranberry’ being in excess of the cap has no basis in law.
In view of the foregoing judicial pronouncements, I find that the Actual User condition and the percentage-based CIF value restrictions introduced through Public Notice No. 41/2015-2020 dated 02.11.2016 cannot constitute a valid ground for denying the benefit of the said Notification where such restrictions arc sought to be enforced solely on the basis of the Public Notice without the requisite legal authority. Therefore, the Applicant is entitled to claim the benefit of Notification No. 25/2023-Cus. dated 01.04.2023 for the import of “Inshell Walnuts” against a valid transferable DFIA issued against the relevant SIONs, subject to fulfilment of the applicable conditions of the said Notification, the DFIA and other governing statutory provisions.
8. I rule accordingly.
