Advance authorisation redemption letter defeats customs duty demand once export obligation is shown fulfilled.

Duty foregone under an advance authorisation scheme was held unsustainable once the importer produced the redemption letter evidencing fulfilment of the export obligation. Goods had been cleared without duty under Customs Notification No. 96/2009-Cus, and the relevant documents were submitted to the licensing authority. After the redemption certificate was issued, the legal basis for recovering customs duty ceased to exist, and delay in issuing that letter could not be used to penalise the importer. The duty demand was therefore set aside with consequential relief.

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Issues: Whether the demand of customs duty foregone under the advance authorisation scheme could be sustained after the importer produced the redemption letter showing fulfilment of export obligation.

Analysis: The importer had cleared goods without payment of duty under Customs Notification No. 96/2009-Cus against an advance authorisation and was required to discharge the export obligation within the stipulated period. The record showed that the relevant documents were submitted to the licensing authority and that the redemption letter was subsequently issued, confirming fulfilment of the export obligation. Once that certificate was available, the basis for confirming the duty demand ceased to survive, and the delay in issuance of the redemption letter could not be used to penalise the importer.

Conclusion: The duty demand was unsustainable and was set aside with consequential relief in favour of the assessee.

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