Binding customs circulars must be applied to their true scope; provisional duty-free clearance could not be denied on a misreading.

Binding administrative circulars governing duty liability must be applied according to their true scope. The Bombay HC noted that the CBEC circular contemplated provisional duty-free clearance for electronic components capable of multiple uses, subject to later verification of actual use. As the importer had brought the silicon rectifiers under an actual user licence for manufacture of electronic flash guns, the authorities misread the circular and wrongly denied provisional treatment. The orders were therefore found perverse and unsustainable, and the duty already collected was held refundable, with belated verification after a long lapse of time serving no useful purpose.

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Issues: Whether the imported silicon rectifiers were entitled to provisional duty-free clearance under the Board's circular and whether the duty already collected was refundable.

Analysis: The circular issued by the Central Board of Excise and Customs contemplated provisional duty-free clearance where electronic components capable of more than one use were imported for use in electronic equipment other than wireless receiving sets, with subsequent verification of actual use. The importer had obtained the goods against an actual user licence for manufacture of electronic flash guns, and the authorities failed to apply the circular correctly. The impugned orders were found to be perverse and unsustainable because they ignored the true scope of the circular and denied the provisional treatment that should have been granted, with no useful purpose remaining in insisting on belated verification after a long lapse of time.

Conclusion: The importer was entitled to provisional duty-free clearance and refund of the duty collected, and the orders rejecting the refund claim were set aside.

Final Conclusion: The writ petition succeeded, the assessment and appellate revisional orders were quashed to the extent impugned, and the respondents were directed to refund the duty and pay costs.

Ratio Decidendi: Binding administrative circulars governing duty liability must be applied according to their true scope, and where imported goods fall within a circular's provisional clearance mechanism, the revenue cannot deny relief by misreading the circular or by insisting on futile delayed verification.

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