Essentiality Certificate jurisdiction: cancellation for unrelated exemption issues was beyond power and was quashed.

The Director General of Hydrocarbons' role was confined to certifying whether imported goods were required for petroleum operations. It could not cancel an Essentiality Certificate on an unrelated ground, such as the importer allegedly not being a bona fide subcontractor of ONGC, because eligibility for exemption under the customs notification had to be examined separately by Customs in assessment proceedings. As it was undisputed that the goods were required for and used in petroleum operations, cancellation on that basis was beyond jurisdiction. The court therefore held the cancellation unsustainable and quashed it.

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Issues: Whether the Director General of Hydrocarbons could cancel an Essentiality Certificate on the ground that the importer was not a bona fide subcontractor of ONGC, even though the imported goods were required for petroleum operations.

Analysis: The scope of the Director General of Hydrocarbons' function was limited to determining whether the goods sought to be imported were required for petroleum operations. The question whether the importer satisfied the conditions of the exemption notification, including entitlement to its benefit, was for the Customs authorities to examine in assessment proceedings. Since it was not disputed that the goods were required for petroleum operations and were being used for that purpose, cancellation of the certificate on the unrelated ground that the importer was not the subcontractor of ONGC was beyond jurisdiction. The alleged non-fulfilment of notification conditions could not justify cancellation of the certificate, and any question regarding final assessment or re-export consequences had to be considered by Customs separately.

Conclusion: The cancellation of the Essentiality Certificate was unsustainable and was quashed; the petitioners succeeded.

Ratio Decidendi: An authority empowered only to certify that goods are required for petroleum operations cannot cancel that certificate on grounds unrelated to that statutory function, and issues concerning eligibility to exemption under a customs notification must be decided by Customs in assessment proceedings.

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