Exemption claim cannot be rejected for procedural delay where clarification was diligently pursued and permission was later found unnecessary.

Customs authorities should not reject an exemption claim merely because the import was completed beyond the one-year period or because RBI permission was initially sought, where RBI later clarified that such permission was unnecessary. The Court found that the delay was linked to the petitioner's repeated pursuit of clarification and that the claim must be examined on merits if the conditions of actual export and re-import of the extracted gold and silver are satisfied. The respondents were directed to decide the exemption claim substantively, rather than on purely procedural grounds.

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Issues: (i) Whether the petitioner's request for exemption under Notification No. 25/2001-Cus could be considered without insisting on RBI permission and without rejecting the claim merely because the import was completed beyond the one-year period.

Analysis: The RBI clarified that its permission for import of gold after processing of copper anode slime was not necessary, so that issue no longer survived. The remaining question was whether the customs authorities should deny the exemption solely because the statutory time limit had expired while the petitioner was repeatedly seeking clarification from the authorities. The Court found that the delay was attributable to the pendency of clarification and that the authorities should decide the exemption claim on merits, provided the petitioner satisfies the conditions of actual export and re-import of the extracted gold and silver.

Conclusion: The respondents were directed to consider the exemption claim on merits and not to reject it merely for want of RBI permission or for crossing the one-year period.

Final Conclusion: The petition succeeded in part, with the claim for exemption left for substantive decision by the respondents under directions protecting the petitioner from rejection on purely procedural grounds.

Ratio Decidendi: Where the applicant has pursued clarification diligently and the authorities themselves have contributed to the delay, an exemption claim should not be rejected solely on the ground of expiry of the procedural time limit or for absence of a permission later clarified as unnecessary.

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