Free-list import and transaction value rules bar confiscation and valuation enhancement without contemporaneous comparable imports.

Imported video cassettes shifted from the restricted list to the free list could not be confiscated for want of an import licence, because no licence was required once the item became freely importable; the redemption fine and penalty were therefore unsustainable. The declared invoice value also could not be rejected and enhanced on the basis of an allegedly identical import made about nine months earlier, because the comparison was not contemporaneous and no legally permissible ground for displacing transaction value was shown. On both issues, the importer succeeded and the impugned order was annulled.

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Issues: (i) whether imported video cassettes, having been shifted from the restricted list to the free list by notification, could still be confiscated and visited with fine and penalty for want of import licence; and (ii) whether the declared import value could be rejected and enhanced on the basis of a non-contemporaneous import of allegedly identical goods.

Issue (i): Whether imported video cassettes, having been shifted from the restricted list to the free list by notification, could still be confiscated and visited with fine and penalty for want of import licence.

Analysis: The imported goods were brought in after the relevant notification shifted the item from the restricted category to the free category. Once the item had become freely importable, no import licence was required for the consignment. In the absence of any licence requirement, the basis for confiscation and the consequential fine and penalty could not survive.

Conclusion: The confiscation of the goods and the imposition of redemption fine and penalty were unsustainable and were set aside in favour of the assessee.

Issue (ii): Whether the declared import value could be rejected and enhanced on the basis of a non-contemporaneous import of allegedly identical goods.

Analysis: The declared invoice value was not shown to fall within any exception to acceptance of transaction value. The comparison relied upon by the department was with an import made about nine months earlier, which was not contemporaneous. The goods were electronic items and the record did not contain any finding justifying rejection of the invoice on the facts proved. Since the comparison did not satisfy the requirement of contemporaneous identical imports, enhancement under the valuation rules was not justified.

Conclusion: The enhancement of value was unlawful and was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded in full, with the impugned order annulled and the importer granted the resulting reliefs.

Ratio Decidendi: Where an imported item has been moved to the free list, confiscation for absence of import licence cannot be sustained; and declared transaction value cannot be rejected except on legally permissible grounds supported by contemporaneous comparable imports.

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