Export obligation breach: surrender of REP licences does not erase liability where imported goods remain unaccounted and default is wilful.

Surrender of REP licences does not by itself discharge liability for breach of an export obligation where imported goods remain unaccounted for and the record supports an inference of wilful default or misutilisation. A fixed export obligation attached to imports under an imprest licence must be actually fulfilled within the stipulated period; mere surrender of replacement licences is not an adequate substitute. On that basis, the fiscal penalty for non-fulfilment and misutilisation was sustained and the challenge to its imposition failed.

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Issues: Whether the fiscal penalty imposed for non-fulfilment of export obligation and alleged misutilisation of imported goods could be sustained despite surrender of REP licences in purported discharge of the obligation.

Analysis: The petitioner had imported diamonds under an imprest licence subject to a fixed export obligation, but did not discharge even part of that obligation within the stipulated period. The imported goods were not satisfactorily accounted for, and the subsequent surrender of REP licences was held not to substitute for actual fulfilment of the export obligation. The authority's inference of wilful default and misutilisation was found to be supported by the record, and the challenge that penalty was premature or unsupported was rejected.

Conclusion: The fiscal penalty was rightly imposed and was not liable to be interfered with.

Ratio Decidendi: Surrender of REP licences does not by itself discharge liability for breach of export obligation where the imported goods remain unaccounted for and the circumstances justify an inference of wilful default or misutilisation.

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