Advance licence revalidation may cover earlier imports under an export-linked scheme when the export obligation is fulfilled.

In an advance licence scheme linked to export obligation, unconditional revalidation may relate back to earlier imports and preserve duty-free exemption where the export commitment is ultimately fulfilled. The advance licence and DEEC operated as one composite arrangement, so the later extension and revalidation could not be read in isolation from the intended export-linked imports. On the facts stated, the licensing authority accepted the request and the export obligation was fulfilled; accordingly, the earlier imports remained covered by the exemption notification and the duty demand was unsustainable.

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Issues: Whether revalidation of an advance import licence granted after the clearance of goods could be treated as covering the earlier imports so as to sustain duty-free benefit under the exemption notification.

Analysis: The advance licence and the DEEC formed part of an integrated export-import scheme in which import entitlement was linked with fulfilment of export obligation. The importers had obtained extension of the export-obligation period and later secured revalidation of the licence without any condition. The licensing authority accepted the request on the facts disclosed, and the export obligation was stated to have been fulfilled. In this scheme, the revalidation could not be viewed in isolation from the earlier imports made for the intended export product, because the licence and the export commitment operated as one composite arrangement.

Conclusion: The revalidation covered the earlier imports and the goods remained entitled to the duty-free benefit. The issue was decided in favour of the assessee.

Final Conclusion: The demand of duty was not sustainable, and the Revenue's appeal failed.

Ratio Decidendi: In an advance licence scheme tied to export obligation, a later unconditional revalidation may relate back and validate earlier imports for the purpose of the exemption where the export obligation is ultimately fulfilled.

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