1996 (3) TMI 312 - AT - Customs

Summary

Issues:
Appeals against Customs duty clearance based on license conformity with policy provisions.

Detailed Analysis:

Issue 1: Clearance of Goods under License Conformity
The appeals involved two respondents who imported different dyes seeking duty-free clearance under Customs Notification No. 203/92. The licenses issued did not conform to the policy requirements as they lacked quantity restrictions, leading to the denial of duty-free clearance. The Commissioner of Customs (Appeals) set aside the denial, citing that the dyes were not in Sensitive List III when the licenses were issued, and the licenses were valid as per the policy at that time.

Issue 2: Arguments by the Appellant
The ld SDR argued that even if the dyes were not in Sensitive List III at the time of issuance, licenses should have had quantity restrictions as per Sensitive List I. The appellant contended that Customs authorities can refuse duty-free clearance if licenses do not meet policy provisions, regardless of when the dyes were added to the Sensitive List III.

Issue 3: Arguments by the Respondent
The ld Advocate argued against discrimination, stating that similar consignments were cleared without duty charges. Relying on DGFT clarifications, the respondent contended that the licenses were valid and the objection was unjustified, as supported by past clearances under the same notification.

Issue 4: Legal Interpretation and Precedents
The SDR's argument was based on the requirement of quantity restrictions for licenses under Sensitive List I, even for value-based licenses. However, the Bombay High Court precedent stated that Customs authorities must allow imports under valid licenses until proven otherwise. The SDR's challenge was not about license validity but about entitlement to duty-free import under Notification No. 203/92.

Issue 5: Compliance with Notification Requirements
The Customs authority's objection was not based on Notification grounds, as the benefit denial was due to the dyes being in Sensitive List III. The authority was only empowered to check compliance with specific conditions under the Notification, not to question license validity on extraneous grounds.

Issue 6: DGFT Clarifications and License Validity
DGFT clarifications supported that quantity restrictions were not necessary for the dyes, and licenses were issued knowingly. The authority had no jurisdiction to challenge licenses beyond what was issued. Past clearances under the same notification further supported the validity of the licenses.

Conclusion:
Considering all aspects and submissions, the Tribunal rejected the Department's appeals, upholding the lower authority's decision to grant duty-free clearance based on the licenses' validity at the time of issuance and compliance with Notification requirements. The objections raised by the Customs authority were deemed unjustified, and past clearances under the same notification reinforced the validity of the licenses in question.