Import exemption cannot be withdrawn retrospectively for auxiliary duty on goods imported during its operative period.

Goods imported while an exemption notification was operative could not be subjected to auxiliary duty under a later notification. The exemption had crystallised on the date of import, so a subsequent notification could not retrospectively withdraw that benefit for those imports. The same protection applied to auxiliary duty, making the demand unsustainable where the goods entered during the exemption period. The principle is that an exemption in force on the date of import governs the levy, and later notifications cannot displace it for completed imports.

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Issues: Whether goods imported during the currency of an exemption notification could be subjected to auxiliary duty by a later notification.

Analysis: The imported alloy steel fell within the period when the exemption notification was operative. The later notification could not take away the exemption already available for imports made during that period. The same principle applied equally to auxiliary duty, and the demand raised on the basis of the later notification was therefore unsustainable.

Conclusion: The levy of auxiliary duty on the petitioners' imports was not justified and the challenge succeeded.

Ratio Decidendi: An exemption in force on the date of import cannot be displaced for those imports by a subsequent notification, and the protection extends equally to auxiliary duty.

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