Restrictive classification correction cannot justify confiscation where toy parts were imported before the effective date.

Toy parts imported by a toy manufacturer before the effective date of a restrictive classification were treated as raw materials, not as restricted consumer goods, on the facts stated. A later DGFT clarification was viewed as correcting an earlier classification error rather than introducing a new policy change, and a departmental circular also acknowledged incorrect classification in some cases. On that basis, the import was not liable to confiscation, and the redemption fine and penalty were held unsustainable.

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Issues: Whether parts of toys imported before the effective date of the restrictive classification could be treated as restricted goods, and whether confiscation, redemption fine and penalty were sustainable.

Analysis: The goods were imported on 18-3-96, whereas the restrictive classification was stated to operate only from 25-3-96. The later clarification by the DGFT was treated as correcting an error, since toy parts imported by a toy manufacturer were raw materials and could not be regarded as consumer goods in the circumstances. The Tribunal also noted that the departmental circular acknowledged incorrect classification in certain cases and clarified that the rationalisation was not a change in policy.

Conclusion: The import was not liable to be treated as restricted on the facts, and confiscation, redemption fine and penalty were unsustainable. The appeals were allowed.

Ratio Decidendi: Where imported goods are shown to have been brought in before the effective date of a restrictive classification, a subsequent clarification correcting an erroneous classification cannot sustain confiscation or penalty.

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