Advance licence entitlement cannot be cut down by a later circular; title follows the negotiable bill of lading after valid payment.

Advance licence benefits already accrued could not be defeated by a later administrative circular: the court held that duty-free clearance could not be denied merely because the imported goods were of Indian origin, where the licence contained no such duty condition. It also held that title to the disputed consignment passed to the second writ petitioner when, after paying through the bank, it obtained the original negotiable bill of lading; the prior claim failed because the first writ petitioners had not completed payment or secured the bill in time. Customs authorities were therefore required to release the goods on compliance with the applicable formalities.

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Issues: (i) Whether goods imported under an advance licence could be denied duty-free clearance on the basis of a later public circular on the ground that the goods were of Indian origin; (ii) Whether the second writ petitioner, having obtained the original negotiable bill of lading under a subsequent transaction, was entitled to release of the disputed consignment notwithstanding the pending claim of the first writ petitioners.

Issue (i): Whether goods imported under an advance licence could be denied duty-free clearance on the basis of a later public circular on the ground that the goods were of Indian origin.

Analysis: The advance licence had been issued before the impugned circular. The licence did not contain any condition requiring payment of duty merely because the goods were of Indian origin. A subsequent circular could not curtail the substantive benefit already conferred under the advance licence, and the importers' accrued entitlement to duty-free clearance could not be defeated by the later administrative clarification.

Conclusion: The duty-free benefit could not be denied to the writ petitioners, and the customs authorities were not entitled to levy duty on the ground of Indian origin.

Issue (ii): Whether the second writ petitioner, having obtained the original negotiable bill of lading under a subsequent transaction, was entitled to release of the disputed consignment notwithstanding the pending claim of the first writ petitioners.

Analysis: The first writ petitioners had failed to complete payment and had not obtained the negotiable bill of lading in time. The second writ petitioner later paid the exporter through the bank and obtained the original negotiable bill of lading, thereby acquiring title to the goods. In the absence of any subsisting claim by the official liquidator or a superior title shown by the first writ petitioners, the customs authorities could not withhold release once the second writ petitioner complied with customs requirements.

Conclusion: The second writ petitioner was entitled to release of the consignment on payment of customs duty and compliance with law, and the first writ petitioners' claim could not prevent such release.

Final Conclusion: The impugned customs refusal was set aside to the extent indicated, duty-free clearance was upheld for the consignments covered by the advance licence, and the disputed consignment was directed to be released to the second writ petitioner on compliance with customs formalities.

Ratio Decidendi: A later administrative circular cannot take away a substantive entitlement already accrued under an advance licence, and title to imported goods follows the valid negotiable bill of lading obtained upon completion of payment through the authorised banking channel.

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