2026-VIL-986-TEL-CU
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CUSTOMS High Court Cases

Customs – Target Plus Scheme – Requirement of nexus between goods imported and goods exported – Appellant exported iron ore fines and other minerals and obtained duty credit certificates for import of continuous cast copper rods – Department contended that copper rods had no nexus with minerals exported and benefit of Notification No. 32/2005-Cus could not be claimed – Appellant contended that broad nexus as contemplated in paragraph 3.2.5 of Handbook of Procedures was sufficient and that ambiguity in policy provisions had been interpreted in favour of exporters – Whether strict one-to-one nexus between imported goods and specific goods exported required or broad nexus with product group sufficient - HELD – Broad nexus between imported goods and any product group of exported goods is sufficient not strict one-to-one nexus. Policy as judicially interpreted by Hon'ble High Courts did not require that imported goods be usable in manufacture of very goods exported. It was sufficient to demonstrate that imported goods could be used as input in manufacture of goods falling within same defined product group as specified in Conditions Sheet attached to certificate – The harmonious interpretation between expression ‘broad nexus’ in Handbook of Procedures and words ‘input’ and use in FTP accepted – Further, extended period of limitation cannot be invoked without establishing intent to evade duty. Where policy provisions are ambiguous and capable of multiple interpretations and assessee proceeded on interpretation later upheld by Hon'ble High Courts, extended period cannot be invoked – Duty credit certificates used were never revoked, cancelled or amended by licensing authority DGFT. No evidence of fraud, collusion, wilful misstatement or suppression of facts – The CESTAT order upholding benefit of Notification is upheld and the Revenue appeal is dismissed
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