2006 (9) TMI 182 - SC - Customs

Clearance of the goods under paragraph 197 of the EXIM Policy read with Notification No. 169/90-Cus. subiect to the payment of 50% of the differential duty in cash and furnishing of bank guarantee for the balance amount of 50% directed by High Court Held that - The appeals are dismissed as withdrawn with liberty to the assessee to file an application for recall/review of the order dated 24th September 1992 in WP 8142/91. In case such an application is filed the same shall be decided by the High Court in accordance with law without being influenced by any of the observations made in this order of ours.

Summary

Issues:
1. Interpretation of conditions under the Import and Export Policy.
2. Validity of conditions attached to the import license.
3. Authority's power to relax conditions.
4. Correctness of dismissal of writ petition.
5. Right to challenge conditions attached to the license.

Analysis:
1. The judgment involved the interpretation of conditions under the Import and Export Policy. Paragraph 197 of the EXIM Policy allowed for the import of capital goods at concessional rates of customs duty under certain conditions. The Central Government issued notifications amending the policy to relax the requirement of three years' experience for obtaining a license under the policy.

2. The validity of conditions attached to the import license was questioned by the assessee. The license contained a condition stating that the benefits of paragraph 197 would not be valid if the goods had already been cleared by customs before a specified date. The assessee challenged this condition as being contrary to the provisions of the EXIM Policy.

3. The issue of the authority's power to relax conditions was raised in the context of the assessee's application for import of capital goods. The assessee contended that the authority had the power to relax the conditions attached to the license. However, the assessing authority found that the benefit under paragraph 197 was not available as the goods had been cleared before the grant of the license.

4. The correctness of the dismissal of the initial writ petition was also a key issue. The writ petition filed by the assessee in the High Court challenging the conditions attached to the license was dismissed as infructuous after the license was issued. This led to further legal proceedings and appeals by the assessee.

5. The right of the assessee to challenge the conditions attached to the license was a central issue in the judgment. The assessee filed subsequent writ petitions challenging the conditions and the dismissal of the earlier petition. The High Court and Division Bench decisions were appealed, leading to the Supreme Court judgment allowing the assessee to file an application for recall/review of the earlier order.

This comprehensive analysis highlights the key legal issues and the sequence of events leading to the Supreme Court's decision, emphasizing the interpretation of policy conditions, validity of license conditions, authority's power to relax conditions, correctness of legal proceedings, and the right to challenge adverse decisions.