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Issues involved:
Violation of conditions of advance licenses due to alleged inflation of international value of inputs in VABAL application. Analysis: The judgment concerns the issuance of three advance licenses to the applicants for importing poly propylene granules, which the revenue alleges were obtained by inflating the international value of inputs in the VABAL application. The revenue issued show cause notices demanding duty on the excess quantity imported due to the alleged inflation in value. The advocate for the applicants argued that they had not violated any conditions, as they had imported 20% extra in quantity but within the overall value of the licenses. They contended that if the department believed there was an inflation in value, the licenses should have been amended by the DGFT authorities, as per the circular issued by the Board. The applicants claimed that until the licenses were amended, they should not be denied the benefit of exemption. The Tribunal heard both sides and found that the appellants had complied with the terms of the licenses. Considering that the Exim policy allowed a flexibility of 20% in value and quantity, with the condition that the overall CIF value of the license should not be exceeded, the Tribunal held that there was no prima facie violation of the license conditions. Regarding the alleged inflated value in the VABAL application, the Tribunal stated that the revenue's only course of action should have been to get the license amended by the DGFT authorities, as supported by the Board's Circular No. 23/96. Consequently, the Tribunal found in favor of the applicants, waiving the pre-deposit of duty, interest, and penalty imposed on them and staying the recovery until the appeals were disposed of.
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