The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no requirement for the actual use of inputs and quantities of imported goods for claiming Duty-Free Import Authorisation (DFIA) benefit.
Indian Chemical Corporation, the appellant assessee imported Titanium Dioxide Rutile and claimed exemption from payment of basic customs duty under customs notification against Transferable DFIA issued against export of glass bottles.
The assessee appealed against the order passed by the Commissioner for denying the exemptions from payment of basic customs duty under customs notification.
Hardik Modh, the counsel for the assessee contended that the DFIA allows the import of rutile against the description of ‘Formers’ which was nothing but titanium dioxide, and thus the assessee was eligible to claim benefits under the notification.
Further submitted that neither there was any condition in the notification nor under any of the provisions to suggest that only those inputs with actual quantities used in the resultant product are entitled to claim DFIA benefit under the notification.
Anand Kumar, the counsel for the revenue contended that the glass formers are mentioned as generic entries and therefore, are covered and against that entry, a single quantity had been indicated and allowed for import against several inputs.
It was also submitted that the assessee was required to claim a benefit based on the information about input utilization by the original license holder a necessary. Hence, though the DFIA in question was endorsed with transferability, the obligation of the importer ceases to exist.
The bench observed that there was no requirement for the actual use of inputs and quantities for claiming DFIA benefits and the assessee was entitled to claim DFIA benefits under the customs notification for their import of Titanium Dioxide (Rutile) as a glass former against the export of glads bottles under DFIA Scheme.
The two-member bench comprising Ramesh Nair (Judicial) and Mahar (Technical) quashed the order of rejection of the claim and held that the assessee was entitled to claim DFIA benefit while allowing the appeal filed by the assessee.
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