Mandatory permission under customs exemption notification cannot be replaced by gate pass endorsement for zone clearance refunds.

Refund of customs duty on goods cleared from an Export Processing Zone to the Domestic Tariff Area was unavailable because the clearance did not satisfy the mandatory condition in Notification No. 133/94-Cus requiring prior permission of the Development Commissioner. A customs-endorsed gate pass and a request for permission did not amount to permission actually granted, and the customs authority had to be satisfied that the condition was met. As the exemption condition was not complied with, the clearance was not duly authorised under the notification and the refund claim failed. The separate allegation of excess payment was left to be pursued before the lower authority.

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Issues: Whether refund of customs duty paid on clearance of goods from the Export Processing Zone to the Domestic Tariff Area was admissible when the clearance was made without obtaining the Development Commissioner's permission as required by Notification No. 133/94-Cus.

Analysis: The exemption notification permitted clearance of goods from the zone subject to the conditions specified therein. The relevant clause required the clearance to be backed by permission of the Development Commissioner, and the fact of such permission had to be shown to the satisfaction of the customs authority. A gate pass endorsed by customs and zone , and containing a request for permission, did not amount to permission granted by the Development Commissioner. Since the mandatory condition was not complied with, the clearance could not be treated as duly authorised under the notification, and the duty already paid could not be refunded on that basis.

Conclusion: The refund claim was not maintainable and the rejection of refund was upheld.

Final Conclusion: The appeal failed on the main refund issue because the exemption conditions were not satisfied, while the separate claim regarding alleged excess payment was left to be pursued before the lower authority.

Ratio Decidendi: Where an exemption notification makes prior permission a condition for clearance, the requirement is mandatory and cannot be substituted by customs endorsement on a gate pass.

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