Settled Advance Authorization compliance limits customs appellate review where duty was paid under the licensing authority's direction.

Where the competent licensing authority directed payment of customs duty for breach of Advance Authorization conditions, and the importer complied before the appellate order, the compliance issue was treated as settled for customs purposes. The Tribunal noted that the earlier demand by the Directorate General of Foreign Trade had been withdrawn after payment, and the relevant fact was not disclosed before the lower authority. It held that the customs appellate forum could not re-examine fulfilment of the licence conditions as if sitting in appeal over the licensing authority's decision, so the duty demand and penalty were not interfered with.

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Issues: Whether the customs duty demand and penalty could be interfered with when the importer had already paid the duty on the licensing authority's direction and the Directorate General of Foreign Trade had withdrawn its earlier demand, thereby settling compliance with the Advance Authorization conditions.

Analysis: The appeal arose from demand of customs duty forgone under Notification No. 93/2004-Cus on the allegation that the export obligation was not fulfilled and the Export Obligation Discharge Certificate was not produced. The record showed that, before the appellate order was passed, the licensing authority had directed payment of the duty and, after such payment, had withdrawn its earlier direction. That material fact was not disclosed before the lower appellate authority. The Tribunal held that the dispute had already been settled by the competent licensing authority, that the duty had been paid in terms of that direction, and that the customs forum could not re-examine compliance with the licence conditions as if sitting in appeal over the licensing authority's decision.

Conclusion: The demand and penalty were not liable to be varied and the appeal failed.

Final Conclusion: The Tribunal treated the licensing authority's resolution of the duty liability as conclusive for the purposes of the dispute and declined to grant further relief in customs proceedings.

Ratio Decidendi: Where the competent licensing authority has directed payment of duty for breach of authorization conditions and the importer has complied, the customs appellate authority will not reopen the settled compliance issue.

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