Advance licence exemption: transferee need not prove export-import nexus absent Revenue evidence of non-compliance.

Duty-free clearance under an advance licence and DEEC book was upheld where Customs had already permitted import on debit of the licence and no material in the show cause notice showed that the exported marble was not of foreign origin. In these circumstances, the transferee of the licence was not required to independently prove a nexus between the earlier export and the imported marble slabs. The burden remained on the Revenue to establish non-fulfilment of the exemption conditions, and in the absence of such material the customs duty demand was unsustainable.

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Issues: Whether the demand of customs duty on marble slabs imported under advance licence and DEEC book could be sustained on the alleged failure to prove nexus between the earlier exported product and the subsequently imported goods, and whether the Revenue had discharged the burden of showing non-fulfilment of the exemption conditions.

Analysis: The imported goods had already been cleared duty free on debit of the advance licence and DEEC book. The record disclosed no material in the show cause notice to support the allegation that the marble originally polished and exported was not of foreign origin. The Customs authorities had themselves allowed duty-free clearance, indicating satisfaction of the notification conditions at the time of import. The transferee of the licence was not required to independently establish nexus between the exported product and the imported goods in the absence of material showing breach of the exemption scheme.

Conclusion: The duty demand was not sustainable and the Revenue failed to establish any legal infirmity in the appellate order.

Ratio Decidendi: Where goods are cleared duty free under an advance licence scheme after Customs has satisfied itself about compliance with the notification conditions, the transferee of the licence is not required to prove nexus with the exported product unless the Revenue adduces material to show non-compliance.

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