Per S.S. Sekhon :

The appellants are a registered SSI unit, engaged in the processing of marble blocks into slabs. They sought clearances of consignments of rough marble blocks and filed bills of entry's. The declared value of the same was accepted. The clearance was sought at nil rate of duty against DEEC advance licence dated 19/07/1995 issued in the name of M/s. Fortune Exports, Ahmedabad and transferred in favour of the appellants by the DGFT, competent authority. Pursuant to public notice dated 31/03/2001 this licence was also re-validated, as per the letter dated 20/04/2001 by M/s. Fortune Exports made to the DGFT authorities. They made the request for endorsement of the transferability to the appellants. The licence was made valid for a period of 6 months from the date of endorsement dated 26/06/2001. Release advises were issued by the Jawahar Customs House to Mumbai Custom House. Enquiries were made by the Custom House at Mumbai Port with the DGFT authorities concerned who informed the customs that the re-validation and transferability was in accordance with the Public Notice dated 31/03/2001. The licence was not suspended and/or concealed till date and was valid for covering the imports. The goods, pending the dispute raised by the customs authorities in Bombay, were permitted to be removed under the provisions of Section 49 of the Customs Act on revenue deposit of equivalent to the duty thereon amounting to Rs. 18,59,945/-. Commissioner issued letter dated 05/02/2002 seeking effective representation on the following points:

"i. The Advance Licence No. 349809 dated 19-07-95 and respective DEEC Book No. 172721 dated 21-07-95 was issued to M/s. Fortuna Exports. The scrutiny of the licence appear to reveal that while discharging the export obligation under the said licence the goods exported are not as per requirement of licence. As per the licences they were required to export polished marble slabs (manufacture out of imported marble blocks), while goods exported as declared and mentioned in the Export Promotion copy of the S/Bill was of normal marble slabs. It is endorsed that the DEEC copy of the S/Bill (in absence of DEEC S/Bills) further indicates that the said S/Bill were converted from `DEEC' to `FREE' implying thereby that the exports made under the said S/Bills were not to be reckoned for the purpose of advance licence/DEEC Book.

"ii. The S/Bills which are reconstructed by ICD, Ahmedabad have only A.O.'s endorsement of reconstruction. The detail of any file nos. under which such reconstruction was allowed has not been mentioned. Hence exports made under these S/Bills cannot be taken toward the discharge of export obligation. Moreover, the export goods are declared as `Normal Marble Slabs'. Thus the facts as stated at 2 (i) above would be equally applicable in this case.''

"iii. The verification of two S/Bills of JCH viz. S/Bill No. 532612 dated 10-10-94 and S/Bill No. 535534 dated 27-10-94 have endorsement of provisional assessment by Shri H. Shrivastava, Appraising Officer. They do not have endorsement of finalisation, hence the said S/Bills cannot be reckoned for DEEC logging. Moreover the export goods were Normal Marble Slabs "28 mm thickness" similar to the goods exported under other S/Bills which were converted into free S/Bill (DEEC benefit denied).''

"3. Further, para 7.27 of Hand Book of Procedure VOL- 1 for the year 1997-2002 provides that upon endorsement of transferability, a duty free licence would be valid for the balance period of its validity or for a period of six months from the date of endorsement, whichever is later. However, licence submitted for the endorsement of transferability after 30 months of the issuance shall have a validity upto maximum period of 36 months from the date of issuance. The said advance licence is re-validated by the office of the Jt. Director General of Foreign Trade, Ahmedabad in terms of Public Notice No. 2/(PN) 1997-2002 dated 31-03-2001 for the period of six mon