Customs duty demand was premature without a definite STPI finding on fulfilment of export obligation.

A customs duty demand for duty foregone could not be sustained on the existing record because the STPI communication was internally inconsistent: one part indicated that the unit had met its export obligation, while another suggested duty was payable on the imported capital goods and inputs. In the absence of a clear and definite conclusion from the competent STPI authority, the demand was premature. The Board circular also required confirmation of duty only after a conclusive finding by the Development Commissioner or competent authority. The matter was remanded for fresh consideration after observing natural justice and obtaining a definitive STPI finding on fulfilment of the export obligation.

---

---

Issues: Whether the demand of customs duty foregone could be sustained without a definite conclusion from the competent STPI authority on fulfilment of the export obligation.

Analysis: The letter of the STPI contained an inherent inconsistency, inasmuch as one part stated that the unit had met its export obligations while another part indicated that duty on the imported capital goods and inputs was payable. In the absence of a clear and definite conclusion from the STPI, the duty demand was held to be premature. The Board circular also contemplated confirmation of duty only after a definite conclusion had been arrived at by the Development Commissioner or the competent authority. The matter therefore required fresh consideration after observing natural justice and obtaining a conclusive finding from the STPI on fulfilment of the export obligation.

Conclusion: The demand could not be finally sustained on the existing record and the matter was remanded for fresh decision after obtaining a definite conclusion from the STPI.

---