Per Gowri Shankar :

The respondent imported a consignment of cotton denim fabric for shirt. It produced for their clearance an import licence which has been issued to M/s. Hindustan Lever Ltd. The licence was an advance licence permitting import of cotton fabrics. The export obligation subject to which the licence was so granted was for export of gents shirts. This was objected to on the ground that the imported goods had no nexus with the exported goods. Notice was issued proposing to deny the benefit of exemption under Notification 203/93. The Assistant Collector confirms the proposal in the notice.

2. On appeal from this order, Collector (Appeals) held that the licence was for import of cotton fabrics and the relevant import policy for cotton fabrics. It did not distinguish between different types of cotton fabrics. He found that denim can be used for making gents shirt and also that contention on behalf of the appellant before him that quality of denim imported by it could not be used for making trousers. On these findings he allowed the appeal. Hence this appeal by the Commissioner.

3. The ground in the appeal, which the departmental representative reiterates, is that transf