Retrospective trade restriction and duplicate demand on the same clearances are impermissible under prior approval.

A subsequent DGFT restriction introduced in 1995 could not be applied to DTA clearances made under permission granted in 1992, because later conditions cannot operate retrospectively on transactions already covered by prior approval. A second show cause notice and separate demand for the very same clearances were also impermissible where those transactions had already been covered by an earlier notice and demand. The commentary states that the later restriction did not govern the earlier clearances and that the duplicate demand could not survive once the same subject matter had already been adjudicated.

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Issues: (i) whether the restriction introduced in 1995 regarding clearance within one year could be applied to clearances made pursuant to permission granted in 1992; and (ii) whether a second show cause notice and separate demand could be sustained in respect of the very same clearances already covered by an earlier notice and demand.

Issue (i): whether the restriction introduced in 1995 regarding clearance within one year could be applied to clearances made pursuant to permission granted in 1992.

Analysis: The permission for DTA clearances had been granted in 1992, and the later restriction introduced by the DGFT authorities in 1995 could not govern clearances made under the earlier permission. A condition introduced subsequently could not be applied retrospectively to transactions already covered by the prior approval.

Conclusion: The later restriction did not apply to the clearances made under the 1992 permission, and this issue was decided in favour of the assessee.

Issue (ii): whether a second show cause notice and separate demand could be sustained in respect of the very same clearances already covered by an earlier notice and demand.

Analysis: The same clearances had already been made the subject of an earlier show cause notice and demand. Issuing another notice for the same transactions, and proceeding with a second adjudication that included the amount already covered by the earlier demand, was held to be impermissible and not legally proper. The later demand could not survive in the face of the prior adjudication covering the same subject matter.

Conclusion: The second show cause notice and the consequential demand were unsustainable, and this issue was decided in favour of the assessee.

Final Conclusion: The impugned appellate order was set aside, and the appeal succeeded with consequential relief on the footing that the later restriction could not be applied retrospectively and the duplicate demand on the same clearances was impermissible.

Ratio Decidendi: A subsequent administrative restriction cannot be applied retrospectively to clearances made under an earlier permission, and a second demand cannot be sustained for the same transaction once it has already been the subject of an earlier notice and adjudication.

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