Premature customs demand fails where export obligation period was extended and the demand was set aside as unsustainable.

Customs demand was treated as premature because the export obligation period under the licence had already been extended by the competent foreign trade authority, and that extension had not been placed before the original decision-maker. The Tribunal was held justified in setting aside the demand on that basis, as it applied the earlier view taken on similar facts and no error of law or material irregularity was shown. The challenge to the Tribunal's order therefore failed, and the demand against the importer was not sustained.

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Issues: Whether the demand raised by Customs was premature in view of the extension of the export obligation period granted by the competent foreign trade authority, and whether the Tribunal was justified in setting aside the demand on that basis.

Analysis: The communication dated 12 August 2004 showed that the export obligation period under the licence had been extended up to 2 August 2007. That fact had not been placed before the Commissioner of Customs when the original order was passed. On the material before it, the Tribunal rightly treated the demand as premature and followed the earlier view taken in a similar factual situation. No error of law or material irregularity was shown in the Tribunal's approach.

Conclusion: The challenge to the Tribunal's order failed, and the demand against the importer was not sustained.

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