Advance authorisation compliance cannot be denied on a technicality when export obligation is otherwise proved by contemporaneous records.

Refusal to redeem advance authorisation was held unsustainable where the Bill of Export was treated as an absolute requirement despite contemporaneous evidence showing supply to the SEZ unit and fulfilment of the export obligation. The Court accepted that ARE-1 forms, certificates issued by the Development Commissioner and Central Excise authorities, and the purchaser's confirmation supported actual supply and utilisation. It found the authorities acted inconsistently by initially accepting that alternative proof could establish compliance, then rejecting relaxation on a technical objection and minor discrepancies. The refusal to grant relaxation was therefore held arbitrary and unreasonable, and the assessee's challenge succeeded.

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Issues: Whether the refusal to redeem the advance authorisation on the ground that the Bill of Export was not filed was sustainable where the assessee produced other contemporaneous evidence of supply and fulfilment of export obligation, and whether the Policy Relaxation Committee's refusal was arbitrary.

Analysis: The dispute turned on whether filing of the Bill of Export was an inflexible requirement or a procedural formality that could be relaxed when the record otherwise showed that the goods had been supplied to the SEZ unit and the export obligation had been fulfilled. The Court noted that the assessee had produced ARE-1 forms, certificates of the Development Commissioner and Central Excise authorities, and the purchaser's confirmation, all of which supported the claim of actual supply and utilisation. The authorities had initially proceeded on the basis that proof of export obligation could be accepted through alternative documents, but later rejected the request for want of Bill of Export and by treating ancillary discrepancies as fatal. This inconsistency rendered the decision unfair and unreasonable. The Court also held that the authorities could not insist on an absolute procedural compliance when the underlying export obligation was otherwise established and the relevant documents had been duly endorsed by statutory authorities.

Conclusion: The refusal to grant relaxation and the consequential adverse action were held unsustainable and arbitrary. The writ petition succeeded and the assessee's challenge was accepted.

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