Transitional import protection fails when shipment is outside original letter of credit validity despite later floor-price restriction.

A post-notification floor-price restriction can make previously freely importable goods subject to licence requirements where the import price falls below the prescribed minimum. Transitional protection under paragraph 1.5 of the Export and Import Policy 1997-2002 applies only if shipment is made within the original validity of an irrevocable letter of credit opened before the restriction took effect. Because the shipment here occurred under an extended, not original, credit validity, the importer could not claim the transitional benefit and confiscation was sustained. The absence of mala fide conduct justified moderation of the monetary consequence, resulting in reduction of the redemption fine and setting aside of the personal penalty.

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Issues: Whether the imported tin plates were liable to confiscation for want of licence in view of the floor-price restriction introduced after the contract, and whether the importer could claim the benefit of the transitional arrangement under paragraph 1.5 of the Export and Import Policy 1997-2002.

Analysis: The imported goods had originally been freely importable, but a subsequent notification fixed a minimum floor price, thereby introducing a restriction and requiring a licence where the price was below the prescribed floor. The transitional protection under paragraph 1.5 applied only where shipment was made within the original validity of an irrevocable letter of credit established before the restriction. Here, the original letter of credit had expired and the shipment was made only under the extended validity, so the protective condition was not satisfied. The confiscation was therefore sustained. At the same time, the circumstances showed absence of mala fide conduct, warranting reduction of the monetary consequence.

Conclusion: The importer was not entitled to the benefit of the transitional arrangement, and confiscation was upheld; however, the redemption fine was reduced and the personal penalty was set aside.

Final Conclusion: The legal effect of the decision is that the import was treated as subject to the post-notification restriction, but the penal consequences were moderated in the importer's favour.

Ratio Decidendi: Transitional protection against a newly imposed import restriction is available only when shipment is made within the original validity of an irrevocable letter of credit established before the restriction takes effect.

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