Retrospective import restrictions cannot sustain confiscation or penalty for goods loaded before the amendment took effect.

A later-amended import condition in Para 2.32 of the Handbook of Procedures could not be applied retrospectively to goods that had already been loaded before the amendment took effect. The consignment had been physically examined and found free from arms, ammunition and explosive material, so the adjudicating authority lacked a basis to sustain confiscation and penalty under the subsequent requirement. The CESTAT held that the confiscation and penalty were not sustainable on the amended provision, allowed the appeal, and set aside the impugned order with consequential relief.

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Issues: Whether amended Para 2.32 of the Handbook of Procedures of Foreign Trade Policy, 2004-09 could be applied to confiscate imported goods and impose penalty when the goods had been loaded before the amendment came into force.

Analysis: The goods were imported and loaded before the amendment to Para 2.32 took effect. The consignment had been physically examined and found free from arms, ammunition, or explosive material. In these circumstances, the adjudicating authority could not invoke the later-amended procedural requirement to justify confiscation and penalty, because a subsequent provision cannot be applied retrospectively to transactions already completed.

Conclusion: The confiscation and penalty were not sustainable on the basis of the amended provision, and the finding was in favour of the assessee.

Final Conclusion: The appeal succeeded and the order of confiscation and penalty was set aside, with consequential relief following.

Ratio Decidendi: A later-introduced import restriction or procedural condition cannot be applied retrospectively to sustain confiscation or penalty for goods loaded before its commencement.

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