Excise duty on export sugar diverted to India and the scope of an export certificate raised substantial questions of law.

The Bombay High Court considered whether an export certificate issued by the export agency could operate as a statutory exemption from excise duty on sugar diverted to the domestic tariff area, whether duty remained payable on sugar earmarked for export but sold in India, and whether the condition precedent under Rule 5 of the Sugar Export Promotion Rules, 1973 had to be examined. The appeals were admitted on the substantial questions of law, leaving those issues for determination.

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Issues: Whether the Tribunal could treat an export certificate issued by the export agency as a statutory exemption from excise duty on sugar diverted to the domestic tariff area; whether duty was payable on sugar earmarked for export but sold in India; and whether the condition precedent under Rule 5 of the Sugar Export Promotion Rules, 1973 was required to be considered.

Outcome: Appeals admitted on the substantial questions of law.

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