Transferable advance licence imports cannot be blocked by Customs on nexus or conformity objections after export obligation is discharged.

A transferable advance licence, once validly endorsed after discharge of the original export obligation, cannot be subjected by Customs to further nexus verification or thickness conformity objections against the transferee. The operative obligation to correlate imports with exports is tied to the subsisting export obligation of the original licence holder, and that requirement ceases once discharge is obtained. In the absence of cancellation by the licensing authority, Customs cannot withhold clearance on the ground of alleged non-conformity; any such issue lies for examination by the licensing authority. The transferee may import goods within the licence description.

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Issues: Whether the Customs authorities could insist on establishment of nexus and require conformity as to thickness of the imported stainless steel goods by a transferee of a transferable advance licence after the original licence holder had discharged the export obligation and obtained transfer endorsement.

Analysis: The licences were transferable after fulfilment of export obligation, and the original holders had already secured the requisite discharge endorsement before transfer. The Court held that once the export obligation under the original licence stands discharged, the nexus requirement ceases to operate against the transferee, because the obligation to correlate imports with exports is tied to the subsisting export obligation of the original licence holder. The Customs authorities could not, in these circumstances, insist on nexus or treat the matter as one for withholding clearance, particularly when the licence had not been cancelled by the licensing authority.

Conclusion: The insistence on nexus and thickness conformity by the Customs authorities was unsustainable, and the issue was decided in favour of the assessee.

Ratio Decidendi: Once a transferable licence has been validly endorsed and the export obligation under it has been discharged, the transferee may import goods answering the licence description without the Customs authorities insisting on further nexus verification; any alleged contravention is for the licensing authority to examine.

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