Export proof and Bhutan payment documentation: endorsed invoices sufficed, and foreign currency certification was not required.
Endorsed original and duplicate invoices were accepted as sufficient proof of export, because the endorsed duplicate was the most reliable document returned through the customs channel and rejection for absence of the quadruplicate copy was unwarranted. For exports to Bhutan under the notification scheme, a bank certificate showing receipt in freely convertible currency was not required, since the governing trade arrangement permitted payment in Indian rupees and the currency-certification requirement did not survive on the facts. The exemption benefit was therefore sustained on the basis of the documentary proof accepted by the Tribunal.
Issues: (i) Whether production of endorsed original and duplicate invoices was sufficient proof of export despite non-production of the quadruplicate copy; (ii) whether a bank certificate showing receipt of payment in freely convertible currency was necessary for exports to Bhutan under the notification scheme.
Issue (i): Whether production of endorsed original and duplicate invoices was sufficient proof of export despite non-production of the quadruplicate copy.
Analysis: The procedural scheme under the notification required movement of multiple invoice copies through the land customs station and the border customs authorities. The endorsed duplicate copy remained the most reliable evidence because it was returned through the official channel, whereas the quadruplicate copy was only a supporting document retained largely with the exporter. In the circumstances, rejection of export proof merely for absence of the quadruplicate copy was unwarranted, especially when the endorsed original and duplicate copies had been produced and similar evidence had been accepted in connected matters.
Conclusion: Yes. Endorsed original and duplicate invoices constituted sufficient proof of export.
Issue (ii): Whether a bank certificate showing receipt of payment in freely convertible currency was necessary for exports to Bhutan under the notification scheme.
Analysis: The circular relied upon recognized the Indo-Bhutan trade arrangement and permitted receipt of consideration in Indian rupees. In that setting, insisting on proof of receipt in freely convertible currency was not justified. The later amendment was treated as clarificatory in nature, and the requirement of a bank certificate did not survive on the facts of the case.
Conclusion: No. A bank certificate evidencing receipt in freely convertible currency was not required.
Final Conclusion: The impugned orders were set aside and the exemption benefit was sustained on the basis of the documentary proof accepted by the Tribunal.
Ratio Decidendi: Where the statutory export procedure shows that endorsed original and duplicate invoices provide reliable proof of export, rejection of such proof for want of a supporting quadruplicate copy is improper, and a currency-certification requirement cannot be insisted upon where the governing trade arrangement permits receipt in Indian rupees.
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