Customs exemption under TRQ licence cannot be denied merely because the licence lacks an actual user condition.

Customs exemption under Notification No. 21/2002-Cus. could not be denied where the importer held a valid Tariff Rate Quota allocation certificate and the licence lacked an actual user condition. The DGFT public notice had removed that condition for the subject goods, and the Tribunal treated the licence as valid for ex-bond clearance under the TRQ scheme. Customs authorities could not question the correctness of the licence or refuse exemption on alleged misissue or misrepresentation, as such matters lay with the licensing authority. The DGFT clarification also supported clearance of warehoused goods against the later TRQ authorisation, so the Revenue's objection failed.

---

---

Issues: Whether the benefit of exemption under Notification No. 21/2002-Cus. could be denied to the importer on the ground that the licence was issued without the actual user condition, and whether the customs authority could refuse exemption on that basis when the licence remained valid under the Tariff Rate Quota scheme.

Analysis: The goods were covered by a valid Tariff Rate Quota allocation certificate issued for the relevant year and the licence under which ex-bond clearance was sought did not carry any actual user condition. The public notice issued by DGFT removed the actual user condition for the subject goods, and the Tribunal held that customs authorities could not sit in judgment over the correctness of the licence issued by the licensing authority. Any question whether the licence was wrongly issued, or whether there was any misrepresentation, was a matter for the licensing authority and not for customs. The cited clarification from DGFT also supported clearance of warehoused goods against the later TRQ authorisation.

Conclusion: The exemption could not be denied on the ground of absence of the actual user condition in the licence, and the Revenue's objection failed.

---