2000 (10) TMI 451 - AT - Customs

Summary

Issues:
1. Denial of duty exemption claim for imported sodium saccharin.
2. Interpretation of conditions in the import license.
3. Authority to question terms of the license by customs authorities.
4. Application of sensitive item norms for import licensing.
5. Validity of the import license for sodium saccharin.

Analysis:
1. The appellant imported sodium saccharin under a value-based advance license but faced a notice proposing denial of duty exemption due to alleged insufficiency in the license balance. The Assistant Collector held that sodium saccharin was not covered by the license due to its sensitivity in the export product's policy, limiting factors based on weight/quantity, and lack of balance in the license.

2. The Commissioner (Appeals) noted that the import license did not specify quantity restrictions for sodium saccharin and emphasized that customs authorities cannot question the license terms issued by the licensing authority. He allowed the appeal, stating that the Assistant Collector had no authority to reject the license's validity for import.

3. The appeal highlighted the conditions in the import license, particularly the requirement for both value and quantity as limiting factors for certain items. It argued that these conditions override the general value-limiting factor in the license, supporting the appellant's claim for duty exemption on sodium saccharin.

4. The sensitive item list in the Handbook of Procedures 1992-97 provided norms for importing items like sodium saccharin, limiting its quantity based on the exported product. The licensing authority was required to apply these norms for calculating the value of goods to be licensed for import.

5. The Tribunal found that the license did not specify sodium saccharin as a sensitive item with quantity restrictions, and the absence of specific value details further supported the appellant's position. The presence of sodium saccharin in the export product did not necessarily mean it exceeded the 2% limit for import valuation. Consequently, the Tribunal dismissed the appeal, upholding the Commissioner (Appeals) order in favor of the appellant.