Refund claim for obsolete imported goods required reassessment under the FTP and Customs Act after procedural fairness concerns.

Entitlement to destroy obsolete imported goods under para 6.15(b) of the Foreign Trade Policy 2004-09 had to be examined along with the renewed customs licence, continued bonded warehousing, and the refund claim under Section 27 of the Customs Act, 1962. The authorities erred by treating an internal communication as a communicated order and by proceeding only on expiry of the warehousing period without addressing the appellant's export obligation compliance and positive Net Foreign Exchange. As the matter was not considered in the correct legal framework and natural justice had not been properly followed, the impugned order was held unsustainable and the matter was remanded to the original authority for fresh decision after hearing the appellant.

---

---

Issues: Whether the rejection of the refund claim and the demand to pay duty foregone were sustainable in view of the entitlement to destroy obsolete imported goods under para 6.15(b) of the Foreign Trade Policy 2004-09, the renewal of the customs licence, the continued warehousing of the goods, and the alleged failure to follow natural justice.

Analysis: The appellant had fulfilled the export obligation and achieved positive Net Foreign Exchange. Para 6.15(b) of the Foreign Trade Policy 2004-09 permitted destruction of raw material, spares, waste and scrap within the unit on intimation to Customs or outside the unit with permission of Customs. The communication dated 09/04/2009 was only a letter from the Range Officer and not a communicated order of the Assistant Commissioner. The authorities also proceeded on the expiry of warehousing period without examining the renewed licence, the continued bonded warehousing of the goods, and the refund claim under Section 27 of the Customs Act, 1962. The matter had therefore not been examined in the correct legal framework and required reconsideration after compliance with natural justice.

Conclusion: The impugned order was not sustainable and the matter was remanded to the original authority for fresh decision on the refund claim in accordance with law and after hearing the appellant.

---