Import clarification evidence controls confiscation and penalty when the relied-upon departmental clarification is missing from the record.

Confiscation of imported goods and penalty under section 112 of the Customs Act, 1962 were held unsustainable because the adjudication rested on an alleged DGTD clarification that was not on record and was not shown to have been supplied to the importers before decision. The competent authority for import-policy clarification was the Joint Chief Controller or Chief Controller of Imports and Exports, and the importers had produced a favourable clarification from that authority. As the impugned order gave no reason for rejecting that clarification, there was no valid basis for confiscation, and the penalty also failed.

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Issues: Whether confiscation of the imported goods and penalty under section 112 of the Customs Act, 1962 were sustainable when the adjudication was based on an alleged DGTD clarification not found on record and the appellants relied on a clarification from the competent import-control authority.

Analysis: The record did not contain the DGTD clarification relied upon in the proceedings, and it was not shown to have been supplied to the appellants before adjudication. The authority's conclusion was therefore founded on material not available on record. The competent authority for clarifying import eligibility under the policy was the Joint Chief Controller of Imports and Exports or the Chief Controller of Imports and Exports, and the appellants had placed a favourable clarification from that authority before the appellate authority. The impugned order did not explain why that clarification was disregarded. In the absence of a valid basis for holding the goods liable to confiscation, the foundation for penalty also disappeared.

Conclusion: Confiscation and penalty under section 112 of the Customs Act, 1962 were not sustainable, and the appeal succeeded.

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