Import licence endorsement and customs clearance: interim denial of edible oil clearance was rejected, subject to bond and undertaking.

Where a licence expressly endorsed import of all edible oils classified under Chapter 15, customs could not, at the interim stage, refuse clearance of the imported edible oil by relying on Circular No. 21/2007 and deny the benefit of Notification No. 32/2005. The Bombay HC noted that the amended licence and the policy circular recognising processing by the named job worker supported a prima facie entitlement to clearance. The revenue's reliance on precedent was distinguished because that case involved a licence that did not cover the imported item. Clearance was directed on execution of a bond and undertaking, while the show cause notice was left for adjudication.

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Issues: Whether, pending adjudication of the show cause notice, the customs authorities could withhold clearance of edible oil imported under a licence expressly endorsed to permit import of all edible oils classified under Chapter 15 by relying on Circular No. 21/2007 and deny the benefit of Notification No. 32/2005.

Analysis: The licence, as amended by the endorsement dated 10-2-2009, specifically permitted import of all edible oils classified under Chapter 15. The policy circular dated 5-6-2008 also recognised processing of the imported goods by the named job worker. In that context, the Court formed a prima facie view that where the licence itself authorises import of the particular item, the customs authorities cannot, at the interim stage, deny clearance by relying on the earlier circular. The reliance placed by the revenue on a case where the licence did not cover the imported item was distinguished.

Conclusion: The respondents were directed to clear the imported edible oil on the petitioner furnishing bond and undertaking to pay the amount if ultimately found payable, while leaving the adjudication of the show cause notice open.

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