Export obligation findings must precede customs demand and exemption denial before liability can be confirmed.

Customs authorities cannot sustain demand or deny exemption for alleged breach of export obligations and value addition norms before the competent monitoring authority, such as the DGFT or Development Commissioner, has first recorded its finding. The Tribunal held that the impugned order was unsustainable because it confirmed duty and interest without awaiting that determination. It set aside the order and remanded the matter for de novo adjudication, directing reconsideration after the competent authority's action and after granting the appellant a full opportunity to be heard.

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Issues: Whether the demand and denial of exemption under the import and excise notifications could be sustained without awaiting the finding of the DGFT or Development Commissioner on fulfilment of export obligations and value addition norms.

Analysis: The order under challenge proceeded on the footing that the export obligation and value addition issues were not supported by evidence from the monitoring authority, yet it still denied exemption on the view that the goods were not used for the relevant export-linked purpose. The Tribunal noted that the relevant precedents require the customs authorities to await the conclusion of the Development Commissioner or other competent monitoring authority before confirming demand for alleged breach of export obligations. In view of those authorities, and as the impugned order did not conform to that procedure, the confirmation of duty and related interest was found to be unsustainable. The Tribunal also directed that the matter be reconsidered after DGFT action and after granting full opportunity to the appellant.

Conclusion: The order was set aside and the matter was remanded for de novo adjudication, leaving the substantive liability to be decided afresh in accordance with law after the competent authority's finding.

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