1998 (10) TMI 319 - AT - Central Excise

Customs Exemption Conditions: Compliance Over License Validity; Discretion Emphasized

The Tribunal held that Customs need only ensure compliance with specified conditions for exemption, not the validity of licenses beyond those conditions. ... Export - Import Policy Issues:1. Interpretation of EXIM Policy regarding issuance of clarification by DGFT.2. Relevance of EXIM Policy and statutory force in import matters.3. Vested rights of license holders and impact of subsequent restrictions/prohibitions.4. Customs authorities' discretion in granting exemption benefits.5. Authority of Customs to refer licenses issued in contravention to licensing authority.Analysis:1. Interpretation of EXIM Policy:The Commissioner of Customs sought reference to the High Court regarding reliance on a clarification by Jt. DGFT instead of DGFT, as per Para 20 of EXIM Policy 1992-97. The Senior Departmental Representative argued that licenses were deficient as quantity was not specified, impacting duty exemption eligibility. The Tribunal held that Customs need only ensure compliance with specified conditions for exemption, not validity of licenses beyond those conditions.2. Relevance of EXIM Policy and Statutory Force:The issue revolved around the statutory force of the EXIM Policy and its relevance to import matters. The Commissioner contended that licenses not issued per policy terms were ineligible for duty exemption. However, the Tribunal emphasized that the absence of quantity as a limiting factor did not render the licenses void ab initio, as the licenses were valid under the relevant policy and scheme.3. Vested Rights and Subsequent Restrictions:The question of license holders' vested rights and impact of subsequent restrictions/prohibitions was raised. The Tribunal rejected the argument that subsequent policy changes invalidated licenses, stating that the absence of quantity as a limiting factor did not nullify the licenses. The Tribunal clarified that restrictions/prohibitions post-license issuance did not render imports ineligible for exemption.4. Customs Authorities' Discretion in Granting Exemptions:The issue of Customs authorities blindly granting exemption benefits was addressed. The Tribunal highlighted that Customs could examine fulfillment of exemption conditions rather than blindly granting benefits based on license existence. The Tribunal emphasized the need to assess whether exemption notification conditions were met.5. Referral of Licenses Issued in Contravention:The final issue concerned Customs' authority to refer licenses issued in contravention to the licensing authority. The Tribunal dismissed the reference applications, stating that the questions raised were not of law requiring High Court reference. The Tribunal deemed the questions at serial numbers 4 and 5 as academic and not affecting the matter at hand, thereby denying the need for High Court intervention.