Bona fide export obligation shortfall may be regularised when later compliance is achieved under a relief-oriented import policy.

Bona fide shortfall in export obligation under an advance licence may be regularised where subsequent exports bring the firm into compliance and the policy supports relief for old cases. The authority noted the absence of mala fides, the firm's sick-company status under BIFR, and the policy public notice permitting regularisation of genuine defaults. On that basis, it declined a strictly technical approach and withdrew the show cause notice, leaving the matter without penalty after the default was treated as curable through later compliance.

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Issues: Whether the show cause notice issued for alleged misutilisation of goods imported under the advance licence was liable to be withdrawn in view of the firm's bona fide default, subsequent fulfilment of export obligation, and the policy of regularisation.

Analysis: The firm had substantially fulfilled the export obligation and later achieved compliance in both value and quantity terms through subsequent exports. The matter was examined in the context of the policy public notice permitting regularisation of bona fide defaults in old advance licence cases. Although an earlier adjudication had been initiated, the authority declined to adopt a strictly technical approach, noting the absence of any allegation of mala fides and the fact that the firm was a sick company under BIFR. The relief-oriented spirit of the notification and the subsequent good of the shortfall supported regularisation rather than penal action.

Conclusion: The show cause notice was withdrawn in favour of the firm.

Final Conclusion: The proceeding ended without penalty, as the default was treated as bona fide and capable of regularisation after subsequent compliance.

Ratio Decidendi: Where export obligation shortfall is subsequently made good and the default is bona fide, a relief-oriented import policy may justify regularisation instead of penal action.

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