Import conditions for hotel cars required use and foreign exchange earnings, not exclusive transport of foreign guests.

Import of cars for hotel business was not shown to violate the import conditions merely because the cars were not proved to be used only for transporting foreign guests. The relevant requirement was that the hotel earn foreign exchange and put the imported cars to use, and no notification or statutory stipulation imposed an exclusive-use restriction for foreign guests alone. In the absence of any express condition limiting use in that manner, no breach of the import conditions was established, and the issue was decided in favour of the assessee against the Department.

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Issues: Whether the import of cars for use in the hotel business was liable to be treated as a violation of the conditions of import on the footing that the cars were not shown to have been used only for transporting foreign guests of the hotel.

Analysis: The Department could not point to any notification or statutory stipulation requiring the imported cars to be used exclusively for transporting foreign guests. The relevant requirement was that foreign exchange should be earned by the hotel and the imported cars should be put to use. In the absence of any express condition restricting use to foreign guests alone, no violation of a statutory requirement was established.

Conclusion: The issue was answered against the Department and in favour of the assessee.

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