JINDAL DRUGS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The Petitioner engages in the export of menthol based products and is a status holder within the meaning of the Foreign Trade Policy. The Petitioner exports Aromatic Chemicals. On the basis of the export of Aromatic Chemicals, the Petitioner was granted a Duty Free Credit Entitlement (DFCE) Certificate by the Zonal Joint Director General of Foreign Trade, Mumbai. The Certificate entailed that the Petitioner could avail of a duty free credit entitlement and that the imports would be subject to an actual user condition. The Certificate was issued subject to the provisions of paragraph 3.2.5 of the Handbook of Procedures for 2002-2007. Among the conditions imposed on the Petitioner in the condition-sheet was that the import should have nexus with the product goods exported in the proportion indicated therein. The Petitioner is entitled under the DFCE Certificate to import chemical and allied products to the extent of 57.68 per cent of eligible exports and 42.32 per cent consisting of fish and fish products.

(2.) The Petitioner imported chemicals on the payment of duty by utilizing the credit available under the DFCE Certificate. The validity of the Certificate was extended until 25 May 2011. On 5 October 2010, the Petitioner imported a consignment of Anethole (Benzene Methoxy-4-1-Propeny) falling under Chapter Sub-heading 2909 30 19 of the First Schedule to the Customs Tariff from a consignor in the US and filed a Bill of Entry for home consumption. While filing the Bill of Entry, the Petitioner sought to effect payment of duty by making a debit in respect of the credit available under the DFCE Certificate.

(3.) On 8 October 2010 and 10 October 2010, the Deputy Commissioner of Customs (Imports), who is impleaded as the Fourth Respondent, raised several queries inter alia stating that it was mandatory to establish a nexus between the goods imported with the export product group in terms of para 3.7.6 of the Foreign Trade Policy for 2004-2005. The Petitioner was accordingly called upon to submit documents for establishing the nexus of the goods imported with respect to the export product against which the licence had been obtained. The Petitioner was also called upon to disclose the standard input output norms under which the imported items were covered.