Export obligation extension and fulfillment defeated alleged Notification 203/92 violation, so duty demand and penalty were set aside.

Demand of duty and penalty under Notification No. 203/92 was found unsustainable because the export obligation had been extended by the competent authority and was subsequently fulfilled. On that factual and legal basis, the alleged breach of the notification was not established, and the foundation for duty liability and penalty fell away. The duty demand and penalty were therefore set aside in favour of the assessee.

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Issues: Whether the demand of duty and penalty was sustainable for alleged violation of Notification No. 203/92.

Analysis: The Tribunal followed its earlier decision in the connected matter and noted that the export obligation had been extended by the competent authority and had in fact been fulfilled. In view of the extension of time and fulfillment of the obligation, the alleged violation was held not to be made out, and the basis for duty liability and penalty disappeared.

Conclusion: The demand of duty and the penalty were not sustainable and were set aside in favour of the assessee.

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