Subsequent import licence can regularise arrived goods for clearance when policy permits and the goods are not prohibited.

Imported steel sheets could be cleared against a subsequently issued duty-free import licence where the applicable Export and Import Policy allowed goods already arrived but not yet cleared from Customs to be regularised in that manner. The goods were not shown to be prohibited goods under the Customs Act, and the policy permitted warehousing and clearance in accordance with licence requirements. On that basis, confiscation and penalty were not sustainable merely because the licence was obtained after arrival of the goods.

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Issues: Whether imported steel sheets could be confiscated and subjected to penalty when a valid import licence was produced after the goods had arrived but before clearance, in the light of the Export and Import Policy.

Analysis: Paragraph 4.15 of the Export and Import Policy permitted goods other than prohibited items, arms and ammunition, and hazardous waste and chemicals to be imported, warehoused in a private bonded warehouse, and cleared in accordance with the policy against a licence wherever required. Paragraph 7.17 specifically provided that goods already imported, shipped, or arrived but not yet cleared from Customs could be cleared against a duty free licence issued subsequently. The goods in question were not shown to be prohibited goods within the meaning of Section 2(33) of the Customs Act. The department's own practice and its acceptance of duty-free clearance under the subsequently issued licence supported the view that the licence was valid for clearance.

Conclusion: Confiscation and penalty were not warranted and the appellant succeeded.

Final Conclusion: The import was held to be capable of clearance under the subsequently issued licence, and the order of confiscation and penalty was set aside.

Ratio Decidendi: Where the applicable import policy permits warehoused goods to be cleared against a subsequently issued licence and the goods are not prohibited goods, confiscation and penalty cannot be sustained merely because the licence was obtained after arrival of the goods.

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