Duty exemption under the customs notification cannot be denied on grounds outside the notification's conditions.

Customs authorities under Notification No. 203/92-Cus. could verify only whether the imported goods were covered by a value-based Duty Exemption Entitlement Certificate and whether the importer had complied with the bond and undertaking conditions. They could not deny exemption on an extraneous ground such as the absence of a quantity endorsement in the import licence, because that omission did not by itself invalidate the licence or show that the imports fell outside the policy scheme. Questions about the alleged illegality of the licence and other ancillary matters were treated as not germane to the notification-based issue, so the objection to exemption was rejected and the reference applications were not entertained.

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Issues: Whether the Customs authorities could deny exemption under Notification No. 203/92-Cus. on the ground that the import licence did not endorse quantity as a limiting factor under the Export and Import Policy 1992-97, and whether the reference applications disclosed any question of law warranting reference to the High Court.

Analysis: The notification required the Customs authorities to verify only whether the imported goods were covered by a value based Duty Exemption Entitlement Certificate issued by the licensing authority and whether the importer had complied with the prescribed bond and undertaking requirements. The authorities were not empowered to go behind the licence or deny the benefit on an extraneous ground not found in the notification. The omission of a quantity endorsement did not by itself invalidate the licence or establish that the imports were outside the policy scheme. The questions framed on the alleged illegality of the licence and on ancillary matters were also found to be academic and not germane to the notification-based dispute.

Conclusion: The objection to exemption was rejected, and the reference applications were not entertained.

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