Page 175 - ELT_15th July 2020_Vol 373_Part 2

2020 ] M.D. OVERSEAS LIMITED v. UNION OF INDIA 157

has to be undertaken by a specific amendment to the Policy vide Section 5
of the 1992 Act.
50. In this case, Notification No. 31, dated 19-10-2005 indicates that the
Central Government has brought in photocopying machines into the cate-
gory of second-hand goods vide an amendatory notification, therefore, im-
port of photocopying machines stands restricted only on and after 19-10-
2005. In fact, if the argument of the Department is to be accepted, then there
was no need to issue Notification No. 31, dated 19-10-2005.”
29. It has been held by a Division Bench of this Court in Union of India
v. Indian Exporters Grievance Forum [2013 (290) E.L.T. 481 (Del.)], in paragraphs 35
and 36 as under :-
“35. It was thus understood that the nexus has to be maintained that
‘product group’, viz., the category of the products which is exported. If the
import also falls in the same category/group, it would be allowable. In the
aforesaid letter, in relation to the export in food, it was clarified that it
would be ‘food category’ with respect to which the exporter was required
to maintain nexus. In that particular case, the exporter was exporting dry
fruits, he was permitted to import almond which falls in the category of
‘dry fruits’. Initially, when Public Notice No. 16, dated 4-6-2005 was issued
replacing earlier Appendix 17D with new one in Para 10 thereof “broad
nexus” was explained to mean goods imported with respect to any product
group of the exported goods within the overall value of entitlement certifi-
cate. Same meaning was assigned in Para 3.2.5 of the HBP amended on 8-4-
2005. Thus, Circular dated 1-8-2006 of the DGFT was in tune with the afore-
said. It is only thereafter that another Circular dated 8-5-2007 was issued
bringing the concept of ‘use’ and ‘own used’ contained in the Policy to as-
sociate the same with ‘input’ and stating that the import was possible of
those products only if the same had a ‘broad nexus’ with the product group
as an input with the export group and is required to be used as an input in
the product exported by which TPS benefit is sought. On this basis, Public
Notice [dated] 21-6-2007 was issued a this was departure of earlier under-
stating, the respondents naturally felt aggrieved against the same.
36. We are, thus, in agreement with the view taken by the Learned Single
Judge that Para 3.7.6 of the FTP by itself does not indicate that the imported
goods should constitute ‘inputs’ in the goods exported relying upon Atul
Commodities (supra). We also agree with the interpretation of the expression
‘broad nexus’ undertaken by the Learned Single Judge. In fact, Bombay
High Court in the case of Narendra Udeshi (supra) and Essel Mining & Indus-
tries Ltd. v. Union of India [2011 (270) E.L.T. 308 (Bom.)] has taken identical
view dealing with the identical issue. For our benefit, we may reproduce
the following para from the said judgment :
“10. The Foreign Trade Policy, it is well settled, is referable to the
provisions of Sections 4 and 5 of the Foreign Trade (Development
and Regulation) Act, 1992. The policy cannot be amended by an
administrative circular. The circular does not in this case supple-
ment the policy or fill up an interstitial space. The circular imposes
a substantive condition at variance with the policy. VBC 13
wp4499.07-14.6 Where the Central Government has considered it
necessary to impose a requirement of physical incorporation, such a
condition has been made expressly in other provisions of the For-
eign Trade Policy. For instance, in relation to advance plus licences
EXCISE LAW TIMES  15th July 2020  175