MUMBAI, APR 05, 2013: THE appellant purchased a transferable Duty Free Import Authorization (DFIA) transferred in their favour by the original licence holder M/s Tata Chemicals Ltd. and imported Sodium Saccharin BP-8-16 Mesh and claimed the benefit of Notification No. 40/2006-Cus dated 1.5.2006. The benefit was denied to the respondent on the ground that whereas the licence specifies “Corrosion Inhibitor” the goods imported are “Sodium Saccharin' and, therefore, the goods under import does not satisfy the description given in the licence.

The lower appellate authority allowed their appeal based on the DGFT's Circular No.50/2008 and the Board's Circular No.46/2007 holding that ‘Sodium Saccharin' imported by the respondent is a “Corrosion Inhibitor” as is evident from the certificate submitted by the exporter and also as per the clarification given by the Norms Committee of the Ministry of Commerce.

Aggrieved by the said order, the Revenue is before the CESTAT and it is submitted that even if it is assumed that ‘Sodium Saccharin' is a “Corrosion Inhibitor”, since as the quantity and quality of the items imported is different from that indicated in the licence, the benefit is not available and, therefore, the order of the lower appellate authority is not legally sustainable.

The respondent submitted that the as per the Norms Committee Minutes dated 16.12.2009, ‘Sodium Saccharin' has been treated as “Corrosion Inhibitor” in industrial applications and, therefore, its import is permissible in law. As regards the quality of the goods imported, the licence does not specify any quality criteria and it only specifies the quantity and value and so long as the goods imported satisfy the quantity and value limits specified in the licence, they are eligible for the benefit under the said licence. They, therefore, submitted that the order of the lower appellate authority is required to be upheld.

The Bench observed -

“5.1 We have also gone through the Circular issued by the DGFT wherein the same matter has been clarified based on the Board's Circular.

5.2 From the records, it is evident that the appellant has imported Sodium Saccharin and ‘Sodium Saccharin' is a ‘Corrosion Inhibitor' as clarified by the Norms Committee of the Ministry of Commerce in consultation with the Department of CECRI-CSIR, Govt. of India. Therefore, any product which is ‘Corrosion Inhibitor' imported under DFIA licence, is eligible for benefit of Notification No.40/2006. From the records, it is also seen that the respondent herein has not exceeded the quantity and value limit specified in the licence. The clarification given by the CBE&C and the DGFT in this regard also make it very clear that in respect of the goods not covered in paragraph 4.55.3 of Handbook of Procedures, Vol.I, 2004-09, a liberal view should be taken and benefit of Notification No.40/2006 should not to be denied if other conditions are satisfied.”

Holding that there is no infirmity in the order passed by the lower appellate authority, the Revenue appeal was dismissed as being devoid of merits.

(See 2013-TIOL-559-CESTAT-MUM)