Export policy permits concessional domestic clearance of by-products when export-linked limits and net foreign exchange earning conditions are met.

Where the applicable export policy permits domestic tariff area clearance of by-products within the prescribed export-linked limit and the required net foreign exchange earning condition is satisfied, concessional duty under the exemption framework is available. The record indicated that the export-linked limit was not disputed and that the net foreign exchange earning requirement had been fulfilled, including confirmation from the Development Commissioner. On that basis, the by-product clearances were treated as covered by the exemption notification, and the duty demand and penalty could not survive.

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Issues: Whether the appellant was entitled to clear the by-product in the domestic tariff area at concessional duty under the exemption notification when the main product was exported and the net foreign exchange earning requirement was fulfilled.

Analysis: The governing instructions and the amended policy permitted by-products to be sold in the domestic tariff area within the overall limit linked to exports, subject to achievement of the prescribed net foreign exchange earning requirement. The record showed that the Revenue did not dispute either the export-linked limit or the fulfillment of the net foreign exchange earning condition. The appellant also produced confirmation from the Development Commissioner that the required net foreign exchange earning had been achieved.

Conclusion: The appellant was eligible to clear the by-product in the domestic tariff area at the concessional rate, and the duty demand and penalty could not survive.

Final Conclusion: The appeal succeeded and the appellant obtained consequential relief on the basis that the by-product clearances were covered by the applicable exemption framework.

Ratio Decidendi: Where the applicable export policy permits domestic tariff area clearance of by-products within the prescribed export-linked limit and the required net foreign exchange earning condition is satisfied, concessional duty under the exemption notification is available.

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