2026-VIL-267-CESTAT-MUM-CU
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CUSTOMS CESTAT Cases

Customs - Duty Free Import Authorization (DFIA) Scheme - Appellant, a transferee of DFIA entitlement, claimed exemption from basic Customs duty on import of dried cranberry under the scheme - Whether the appellant, as a transferee of the DFIA, is required to demonstrate 'actual use' of the imported goods (dried cranberry) in the manufacture of exported products to avail the exemption from BCD – HELD - The requirement of 'actual use' of the imported goods is not applicable to a transferee of the DFIA scheme, which is a post-export scheme. The DFIA scheme, being a transferable authorization, does not have an 'actual user' condition attached to it. The rationale behind the 'actual use' condition in pre-export schemes is to prevent misuse, which is not applicable to a post-export scheme like DFIA where the export obligation has already been fulfilled by the original holder. The denial of exemption on the ground of 'actual use' was without any legal basis - The jurisdictional Commissioner is directed to request the licencing authorities for restoration of the validity of the DFIA licenses for the unexpired period, considering the fault was not of the appellant but the authorities. The appellant is entitled to the exemption from basic customs duty on the import of dried cranberry under the DFIA scheme – The appeal is allowed - Whether the cap on the CIF value of the imported goods, as incorporated through a public notice, is valid and enforceable against the appellant – HELD - The cap on the CIF value of the imported goods, as incorporated through a public notice, is not valid and enforceable. Relying on the decision of the Hon'ble Supreme Court in Viraj Impex Pvt. Ltd. vs. Union of India & Anr., the Tribunal held that any condition or restriction on the DFIA scheme has to be notified in the Official Gazette and cannot be introduced through a mere public notice, which lacks the force of law.
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