Advance licence validity cannot be questioned by Customs where no foreign trade challenge was taken; import benefit upheld.

Customs could not deny clearance under Notification No. 204/92-Cus. merely because an advance licence carried no value restriction. The licence had been issued by the competent licensing authority, and any challenge to its validity or to the absence of restrictions had to be taken under the Foreign Trade regulatory framework. In the absence of such action, Customs was not entitled to question the licence on its own reading of the conditions, sensitive-item list, or handbook. The matter was decided against the Revenue and the import benefit was upheld for the assessee.

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Issues: Whether Customs could deny clearance under Notification No. 204/92-Cus. on the ground that the advance licence lacked value restrictions and was therefore invalid.

Analysis: The licence was issued by the competent licensing authority and indicated no value restriction. If the department considered the licence to have been wrongly issued or to require restrictions, the proper course was action under the Foreign Trade regulatory framework. In the absence of such action, Customs could not question the validity of the licence or deny the import benefit merely on the basis of its own view of the licence conditions. The department's reliance on a different reading of the sensitive-item list and the handbook was therefore not accepted.

Conclusion: The issue was decided against the Revenue and in favour of the assessee; Customs could not reject the imports on the ground urged.

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