Transferability of DEEC licence benefit: transferee cannot be denied exemption for failing to prove original holder's credit compliance.

A transferee purchaser of duly endorsed, uncancelled DEEC licences could not be required to prove that the original licence holder had not availed input stage credit under Rule 56A or Rule 57A to retain the benefit of Notification No. 203/92-Cus. The non-availment condition was personal to the original exporter and licence holder, so the transferee importer could not be denied the notification benefit for failing to establish another party's compliance. The impugned order was unsustainable, the appeals succeeded, and consequential relief followed.

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Issues: Whether a transferee purchaser of a DEEC licence could be required to prove that the original licence holder had not availed input stage credit so as to retain the benefit of Notification No. 203/92-Cus.

Analysis: The appellants were only transferees of duly endorsed and uncancelled DEEC licences. The condition in Notification No. 203/92-Cus. requiring non-availment of input stage credit under Rule 56A or Rule 57A of the erstwhile Central Excise Rules, 1944, related to the act of the original exporter and licence holder. The transferee importer could not be asked to establish compliance with a condition that had to be satisfied by the original licence holder, and the issue stood covered by the earlier binding view followed in subsequent decisions.

Conclusion: The transferee was not liable to produce proof of non-availment of input stage credit by the original licence holder, and the benefit of Notification No. 203/92-Cus. could not be denied on that basis.

Final Conclusion: The impugned order was unsustainable and the appeals succeeded with consequential relief.

Ratio Decidendi: A transferee of a transferable import licence cannot be compelled to prove compliance by the original licence holder with a notification condition that is personal to the original holder.

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