Export policy compliance limits sandalwood exports; bank guarantee cannot override non-exportability outside the licensed quantity.

Export permission must conform to the governing export policy: the authorities accepted export of the 100 bags of sandalwood flakes and chips covered by the valid licence, but refused export of the remaining 300 bags containing solid heartwood. A bank guarantee could not substitute for compliance with the export policy or make otherwise non-exportable goods exportable. The interlocutory order permitting export of the entire stock was therefore set aside, and export was confined to the licensed quantity.

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Issues: Whether the High Court was justified in permitting export of the entire stock of sandalwood, and whether the exporter could be allowed to export only the quantity covered by a valid export licence.

Analysis: The order held that the authorities had no objection to export of the 100 bags containing sandalwood flakes and chips of less than 50 grams per piece, but the remaining 300 bags containing solid pieces of heartwood could not be exported. It was further held that a bank guarantee could not substitute for exportability under the policy regulating exports.

Conclusion: The interlocutory order permitting export of the entire stock was set aside, while export of the 100 bags covered by the valid licence was allowed.

Final Conclusion: The exporters were confined to the licensed quantity, and the Revenue's objection to unrestricted export succeeded in part.

Ratio Decidendi: Export permission must conform to the governing export policy, and a bank guarantee cannot cure non-exportability of goods outside the licensed category.

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