Pre-2007 authorisations retained duty exemption after transferability, as later policy changes could not impose retrospective liability.

Authorisations issued before 1.4.2007 remained eligible for exemption from additional customs duty and excise duty even after transferability was endorsed, because the amended Foreign Trade Policy provision requiring liability to be noted on the authorisation applied only prospectively to endorsements made after the amendment came into force. The later 2008 policy clarification expressly preserved exemption for pre-1.4.2007 authorisations, and the Board's circular stated that no recovery action should be taken in such cases. The earlier policy position on the date of issue therefore governed, and the subsequent amendment could not be used to deny the exemption; the duty demand was unsustainable.

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Issues: Whether authorizations issued prior to 1.4.2007 continued to enjoy exemption from additional customs duty and excise duty after transferability was endorsed, or whether the amended paragraph 4.4.6 of the Foreign Trade Policy applied so as to fasten duty liability on imports made thereafter.

Analysis: The relevant authorization had been issued before the amendment introducing liability to additional customs duty or excise duty on transferred authorizations. The amended policy required a note of such liability to be endorsed on the authorization at the time transferability was granted, which could operate only for authorizations endorsed after the amendment came into force. The later clarification in the 2008 policy specifically stated that authorizations issued prior to 1.4.2007 would continue to enjoy exemption even after transferability. The Board's circular also clarified that no recovery action was to be taken in such cases, and such clarificatory circular was binding on departmental authorities. The earlier policy position prevailing on the date of issue of the authorization was therefore held to govern the case, and the subsequent amendment could not be applied to deny the exemption.

Conclusion: The demand of additional customs duty and excise duty was not sustainable and the appeal succeeded.

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