Advance licence conversion and retrospective exemption require the competent authority's view before liability is finally determined.

Conversion of an advance licence from value based to quantity based could affect exemption eligibility for imports made before the conversion date only if the competent authority's view on retrospective operation was ascertained. The adjudicating authority had not considered the DGFT communication in full, and the record showed imports both before and after conversion, so liability could not be finally ined without clarifying whether the conversion applied retrospectively. The impugned order was therefore not sustainable in its present form, and the matter was remanded for fresh decision after obtaining the DGFT's opinion and hearing the importer.

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Issues: Whether conversion of the advance licence from value based to quantity based entitled the importer to claim the benefit of the later notification for imports made before the date of conversion, and whether the adjudication required reconsideration on the basis of the DGFT's view.

Analysis: The licence conversion was found to have been permitted by the DGFT, and the adjudicating authority had not considered the communication in its entirety. At the same time, the record showed that some imports were made before conversion and some after it, so the effect of the conversion on earlier imports could not be determined finally without ascertaining the DGFT's opinion on retrospective application.

Conclusion: The impugned order could not be sustained in its present form, and the matter had to be reconsidered after obtaining the DGFT's opinion and giving the importer an opportunity of hearing.

Final Conclusion: The appeal succeeded to the extent that the matter was sent back for fresh decision after reconsideration of the licence conversion issue.

Ratio Decidendi: Where the retrospective effect of an advance licence conversion is material to exemption eligibility, the adjudicating authority must obtain the competent authority's view before deciding liability.

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