Lawful source proof for mineral exports upheld where transit compliance and mining rules remain mandatory despite free exportability.

Customs authorities may require proof of lawful source and transit compliance before permitting export of beach sand minerals and natural garnet, because export under the foreign trade policy does not override other prohibitory mineral laws. Rule 3 of the Tamil Nadu Prevention of Illegal Mining, Transportation and Storage of Minerals and Mineral Dealers Rules, 2011 requires transport under a valid transit pass, and Section 4(1A) of the Mines and Minerals (Development and Regulation) Act, 1957 prohibits transportation or storage except in accordance with the Act and rules. The requirement to produce source documents was treated as a lawful regulatory control, not a total export ban, and the customs challenge failed.

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Issues: Whether the customs authorities could insist on proof of legal source and transit compliance before permitting export of beach sand minerals and natural garnet.

Analysis: The export of beach sand minerals and garnet, though not per se prohibited under the Customs Act, remained subject to other applicable prohibitory laws. Rule 3 of the Tamil Nadu Prevention of Illegal Mining, Transportation and Storage of Minerals and Mineral Dealers Rules, 2011 requires lawful transport through valid transit pass, and Section 4(1A) of the Mines and Minerals (Development and Regulation) Act, 1957 prohibits transportation or storage of minerals except in accordance with the Act and the rules. A freely exportable item under foreign trade policy cannot be exported in violation of those laws. The requirement to produce documents showing legitimate source was therefore treated as a lawful regulatory measure, not as a total ban on export.

Conclusion: The insistence on proof of lawful source and compliance with mineral transport rules was upheld, and the challenge to the customs orders failed.

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