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Sd/-

(Jeet Ram Kait) Member (T) S.L. Peeran, Member (J) (Oral)

9. I have gone through the order recorded by my learned brother but I could not persuade myself to agree with the findings recorded in the order.

10. The facts and the arguments have already been noted in my learned brother's order. Ld. Sr. Counsel took us through various documents and demonstrated that the value for the sensitive goods had not been fully exhausted. It was his contention that Revenue had denied the benefit on the understanding that the imported melting scrap against the said licence figures in Group I of the list of the items as attached to the said licence and as per the existing list, two sensitive items figure in the Sensitive List III and the value thereto cannot be utilized for clearance of subject consignment and hence no value was available for the items imported in terms of licence. It was argued that the show cause notice had skipped the important aspect of flexibility in the said duty free licence and proceeded on the premise as stated and demanded duty by denying the benefit of exemption. It is his contention that during the relevant policy period, the value based advance licences were issued for import of raw material components, intermediate; if it is meant for sensitive items, Licencing Authority was required to specify the quantity or CIF value or both each of the said sensitive items. It was argued that it is the prerogative of the licensing authority to issue any licence and conditions lay thereupon but it is not within the jurisdiction of the customs authorities to go at the back of the licence. The jurisdiction of the customs authorities commences from the point where Licensing Authority exhausts/applies its jurisdiction. He also pointed out that Condition 3 of the licence gives right of flexibility to the appellant in the group itself could have been applied but though interchangeable from one group to the other is not permissible. He submitted that the appellant was entitled to take benefit of flexibility from one item to the other item in the same group i.e. Group No. 1 and it is also open to take benefit of flexibility even of value of sensitive goods in the same group. He submitted that flexibility will be available for import of one or more items giving value of a particular group. He stated that appellants were taking the benefit of flexibility in the same group viz. Group 1 as it doesn't restrict to take benefit of the unutilized value of the item, may be sensitive or otherwise in the same group of flexibility and the benefit cannot be denied. He relied on ALC Circular No. 3/95, dated 6-3-95 issued by the Director General of Foreign Trade which had clarified that once the CIF value of all imports is determined, the exporter will have the flexibility to import any one or more items listed in the licence with the overall value of the licence, (regardless of the quantity mentioned against each items in the DEEC (book) excluding the value of sensitive items (paragraph 110 of the Handbook). In the case of sensitive item, however, the import will be subject to the restrictions of quantity or value or both noted against the said sensitive item in the licence. He also referred to ALC Circular No. 20/95, dated 4-10-95 which also clarifies as follows :-