Advance licence diversion and unproved export obligation sustained confiscation, duty demand, fine, and penalty.

Imported chemicals cleared under an advance licence were treated as diverted and sold in breach of the licence conditions and Notification No. 203/92 because the evidence showed transfer to a buyer, movement at its instance, and no supported warehouse arrangement. The exporter also failed to prove compliance with the export obligation, as the shipping bills did not establish exports under the relevant DEEC licence and the seized goods had already left control before the later shipments relied on. On that basis, confiscation, duty demand, redemption fine, and penalty were sustained for non-compliance with import and export conditions.

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Issues: (i) Whether the imported chemicals covered by the advance licence were sold or diverted in breach of Notification No. 203/92 and the import policy. (ii) Whether the appellant established fulfilment of the export obligation by proving pro rata exports.

Issue (i): Whether the imported chemicals covered by the advance licence were sold or diverted in breach of Notification No. 203/92 and the import policy.

Analysis: The evidence, including the location of the goods, payment trail, and statements of persons concerned with transport and handling, showed that the goods had been sold to the buyer and were being moved at its instance rather than remaining under the appellant's control. The claimed storage arrangement at Daman was not supported by the licence produced, which was only for stocking or sale of drugs from the stated premises and not for keeping raw material as a warehouse.

Conclusion: The goods were sold and diverted in breach of the conditions of the advance licence and the notification, against the appellant.

Issue (ii): Whether the appellant established fulfilment of the export obligation by proving pro rata exports.

Analysis: The shipping bills relied upon did not show that the exports were made under the relevant DEEC licence under which the goods had been imported, and the goods had already been seized before the later shipments relied on by the appellant. The material placed on record therefore did not establish compliance with the export obligation.

Conclusion: Pro rata export compliance was not proved, against the appellant.

Final Conclusion: The confiscation, duty demand, redemption fine, and penalty were sustained because the appellant failed to show lawful compliance with the import conditions and export obligation.

Ratio Decidendi: Goods imported under an advance licence cannot escape confiscation and duty consequences where the evidence establishes diversion or sale contrary to licence conditions and the exporter fails to prove fulfilment of the corresponding export obligation.

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