Retrospective customs exemption amendment aligns with revised export obligation policy, while factual fulfilment must be rechecked.

A customs exemption notification linked to export-obligation compliance under the EXIM Policy was treated as having been amended retrospectively where the policy framework had been later liberalised and transitional treatment applied. The substitution in Notification No. 29/2004 was held to harmonise the exemption with the revised policy regime, although substitution alone does not automatically create retrospectivity. The separate question whether the exporter had actually fulfilled the revised export obligation was left for factual verification by the original authority, with reconsideration to be undertaken after hearing the parties and examining the DGFT discharge certificate and related facts.

---

---

Issues: (i) Whether the amendment made by Notification No. 29/2004 to Notification No. 28/97 was retrospective in operation; and (ii) whether the respondent's claim of fulfilment of export obligation under the revised EXIM Policy required factual verification and reconsideration by the original authority.

Issue (i): Whether the amendment made by Notification No. 29/2004 to Notification No. 28/97 was retrospective in operation.

Analysis: The exemption under Notification No. 28/97 was linked to the export obligation regime under the EXIM Policy, and the notification itself assigned material functions to the DGFT authorities, including certification and extension of the export obligation period. The policy was later liberalised with transitional treatment under para 6.13 of the Export and Import Policy, 1997-2002, and the DGFT had treated the revised norms as applicable to the licence. In that context, the substitution introduced by Notification No. 29/2004 was held to align the customs exemption with the revised policy framework. The fact that an amendment is by substitution does not by itself make it retrospective, but on the facts and policy context here the amendment was intended to operate retrospectively.

Conclusion: The amendment made by Notification No. 29/2004 was retrospective.

Issue (ii): Whether the respondent's claim of fulfilment of export obligation under the revised EXIM Policy required factual verification and reconsideration by the original authority.

Analysis: Once the retrospective operation of the amended notification was accepted, the remaining question was whether the respondent had, in fact, fulfilled the export obligation in terms of the revised policy for the relevant period. That question had not been examined by the authorities below and depended on verification of facts, including the effect of the revised policy and the discharge certificate issued by the DGFT. The matter therefore required reconsideration at the original adjudicatory stage after giving an opportunity of hearing.

Conclusion: The question of actual fulfilment of export obligation was remitted for fresh consideration by the original authority.

Final Conclusion: The customs amendment was treated as retrospective, but the dispute on fulfilment of export obligation was sent back for factual determination under the revised policy framework.

Ratio Decidendi: Where a customs exemption notification is expressly tied to policy-based export obligation conditions and the policy is retrospectively liberalised, the corresponding amending notification may be treated as retrospective so as to harmonise the exemption with the revised policy regime.

---