Binding appellate findings required release of attached goods, but expired operational permission could not be renewed due to litigation delay.

A binding appellate determination that the underlying segregation activity amounted to manufacturing and attracted the relevant customs notification required the authorities to lift the consequential recovery attachment and release the goods and machineries. Judicial discipline required implementation of the superior decision once the basis for recovery had substantially disappeared. However, an expired Letter of Permission could not be extended or revalidated merely because litigation had stalled operations, since economic and fiscal policy matters remain subject to the governing policy framework and do not create a vested right to renewal. The attached assets were ordered released, but no further operational permission was granted.

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Issues: (i) Whether the authorities were bound to release the goods and machineries attached in the recovery proceedings after the Tribunal ultimately decided the dispute in favour of the assessee; (ii) Whether the assessee was entitled to extension or revalidation of the Letter of Permission for the period during which its operations were allegedly stalled.

Issue (i): Whether the authorities were bound to release the goods and machineries attached in the recovery proceedings after the Tribunal ultimately decided the dispute in favour of the assessee.

Analysis: The attachment had been made during the pendency of the statutory proceedings when no stay order protected the assessee. However, once the Tribunal finally held that the activity of segregation by a unit set up prior to 1 April 2002 was to be treated as manufacturing and that the benefit of the relevant customs notification was available, the foundation of the revenue recovery substantially disappeared. Judicial discipline required the authorities to give effect to the higher appellate decision and not continue to retain the attached goods on the reasoning that their release would serve no purpose.

Conclusion: The assessee succeeded on this issue. The authorities were directed to forthwith release the attachment over the goods and machineries.

Issue (ii): Whether the assessee was entitled to extension or revalidation of the Letter of Permission for the period during which its operations were allegedly stalled.

Analysis: The Court noted that the original permission had expired, the policy governing segregation activity had changed, and the subsequent applications for continuation or extension were considered and rejected under the prevailing policy framework. In matters of economic and fiscal policy, the executive has wide discretion, and an applicant has no vested right to insist on renewal under the earlier regime merely because litigation consumed time. The alleged loss of operating days did not create a legal entitlement to a further block of permission.

Conclusion: The assessee failed on this issue. No direction for extension or revalidation of the Letter of Permission was granted.

Final Conclusion: The petition succeeded only to the limited extent of release of the attached goods and machineries, while the prayer for extension of the operational permission was declined. The matter was therefore partly allowed.

Ratio Decidendi: A superior appellate decision binding on the authorities must be implemented by releasing consequential attachments, but an expired industrial permission cannot be extended merely because the assessee lost time in litigation, in the absence of a subsisting legal entitlement under the governing policy.

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