Export obligation compliance time extended where imported material was intact and no substitution or illicit removal was shown.

Where imported material remained available and there was no allegation of substitution or illicit removal, non-utilisation within the stipulated period was treated as a curable default rather than a basis to sustain confiscation, duty demand and penalty. The note records that, in view of difficulties in effecting exports and with export promotion considerations in mind, further time was granted for positive compliance. The confiscation, duty demand and penalty were set aside, and time was extended until the end of June 1992 to use the balance material and complete the export obligation, failing which the Department could proceed in accordance with law.

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Issues: Whether the appellants were entitled to further time to utilise the imported material for export production and whether the confiscation, duty demand and penalty order could be sustained.

Analysis: The material remained available and there was no dispute as to its existence or any allegation of substitution or illicit removal. The only default was non-utilisation within the stipulated period. In view of the difficulties pleaded in effecting exports and in the interest of justice and export promotion, further time for positive compliance was found .

Conclusion: The order of confiscation, duty demand and penalty was set aside, and time was extended until the end of June 1992 for utilisation of the balance material and completion of export obligation, failing which the Department was left free to proceed in accordance with law.

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