Customs enforcement of advance licence conditions upheld where export obligation and disclosure requirements were not shown to be satisfied.

Customs authorities were entitled to invoke the bank guarantee furnished against advance licences under the export-import scheme where the exemption conditions were not shown to have been fulfilled. The record did not establish a discharge certificate, and it indicated possible breach of the customs notification, including a false declaration about manufacturing facilities. The court applied the Customs Act and the notification to hold that the bond could be enforced despite the petitioner's claim of substantial compliance and partial discharge of export obligation, especially where the licence appeared to have been obtained by misrepresentation. The challenge to the bank guarantee invocation therefore failed.

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Issues: Whether the customs authority was justified in invoking the bank guarantee furnished against advance licences issued under the export-import scheme, notwithstanding the petitioner's claim of substantial compliance with export obligation and absence of prior notice from the licensing authority.

Analysis: The petitioner had imported goods duty-free against advance licences subject to export obligation and had executed a statutory bond in terms of the applicable customs notification. The existence of a discharge certificate was not shown, and the record indicated possible violation of the notification itself, including a false declaration regarding manufacturing facilities. The customs authority, acting under the Customs Act and the notification, was entitled to enforce the bond and to proceed on the basis that the exemption conditions had not been fulfilled. The judgment also relied on the principle that investigation and action by the customs authorities are not barred merely because export obligation is said to have been partly discharged, particularly where the licence appears to have been obtained by misrepresentation.

Conclusion: The invocation of the bank guarantee was held to be valid and justified, and the challenge by the petitioner failed.

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