2000 (10) TMI 452 - AT - Customs

Summary

Issues:
1. Denial of duty exemption claim for imported sodium saccharin.
2. Interpretation of conditions in the import licence.
3. Authority of customs officials to question the terms of the licence.
4. Application of sensitive item list and input-output norms.
5. Validity of the import licence for sodium saccharin.

Analysis:
1. The appellant imported sodium saccharin under a value-based advance licence but faced denial of duty exemption due to an alleged lack of balance in the import licence. The Assistant Collector held that sodium saccharin was not covered by the licence as it was considered a sensitive item due to its proportion in the export product of toothpaste.

2. The Commissioner (Appeals) overturned the decision, emphasizing that the import licence did not specify a quantity restriction for sodium saccharin. He noted that customs authorities cannot question the terms of the licence issued by the licensing authority, thereby allowing the appeal against the denial of exemption.

3. The appeal highlighted the specific condition in the import licence regarding quantity and description of permitted goods, which did not mention sodium saccharin as a restricted item based on quantity. The absence of a specific quantity restriction for sodium saccharin in the licence was a crucial point in the decision-making process.

4. The judgment delved into the sensitive item list and input-output norms, which dictate the proportion of certain ingredients that can be imported. It was noted that the norms limited the import of sodium saccharin to 2% of the quantity of the finished product exported. The absence of specific details on the proportion of sodium saccharin used in the export product was a key factor in the decision.

5. The Tribunal found that the absence of a specific quantity restriction for sodium saccharin in the licence, coupled with the lack of clarity on the actual usage proportion of sodium saccharin in the export product, rendered the denial of duty exemption invalid. The decision was based on the understanding that the norms and conditions specified in the licence should be the guiding factors in determining the validity of the exemption claim.

In conclusion, the appeal was dismissed, upholding the decision of the Commissioner (Appeals) based on the lack of specific restrictions on sodium saccharin in the import licence and the absence of clear evidence regarding the proportion of sodium saccharin used in the export product.