Export obligation discharge certificate cured the demand basis and rendered the customs demand unsustainable.

Where a customs demand rested solely on non-production of the Export Obligation Discharge Certificate, subsequent production of a valid redemption certificate showing full discharge of export obligation in value and quantity cured the defect. The certificate also recorded redemption under Para 4.26 of the Handbook of Procedures 2004-09, so the foundation of the adverse order disappeared. On that basis, the demand was held unsustainable and the appeal was allowed.

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Issues: (i) Whether the demand could survive when the only ground for confirmation was non-submission of the Export Obligation Discharge Certificate and the certificate was subsequently produced.

Analysis: The appellant produced the redemption letter issued by the DGFT showing that the export obligation had been completed in full value and in quantity in proportion to the imports made. The certificate also recorded redemption of the case under Para 4.26 of the Handbook of Procedures 2004-09. Since the sole basis for the demand was the absence of the EODC, and that deficiency stood cured by the certificate on record, the foundation of the impugned order disappeared.

Conclusion: The demand was not sustainable and the appeal was allowed.

Final Conclusion: The order rejecting the appeal was set aside because the appellant established fulfilment of the export obligation through the redemption certificate.

Ratio Decidendi: Where the sole basis of an adverse customs decision is non-production of an Export Obligation Discharge Certificate, subsequent production of a valid certificate evidencing full discharge of export obligation renders the demand unsustainable.

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