Res judicata and prospective public notice barred confiscation and penalty for a later consignment under an earlier import contract.

A dispute finally decided on the same contract and same legal foundation could not be reopened for a later consignment, because the earlier determination had attained finality and operated as res judicata. The public notice was treated as prospective, so an import under an earlier contract and letter of credit was not hit by that later clarification. On that basis, the importer's bona fide conduct under the prevailing policy position supported the view that confiscation and penalty lacked legal basis and were not sustainable.

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Issues: (i) whether the Revenue could reopen, in respect of a subsequent consignment under the same import contract, an issue already decided finally in relation to an earlier consignment; (ii) whether confiscation and penalty were sustainable on the merits in view of the prospective operation of the public notice and the importer's bona fides.

Issue (i): whether the Revenue could reopen, in respect of a subsequent consignment under the same import contract, an issue already decided finally in relation to an earlier consignment

Analysis: The earlier dispute concerning a part consignment under the same contract had already been adjudicated by the Board, which held that the public notice operated prospectively and that the import could not be hit by it. That decision attained finality when the Revenue's challenge to it was dismissed. The same legal controversy, arising from the same contract and the same factual foundation, could not therefore be reagitated for another consignment merely because it was a later shipment under the same arrangement.

Conclusion: The issue was barred by res judicata and had attained finality in favour of the assessee.

Issue (ii): whether confiscation and penalty were sustainable on the merits in view of the prospective operation of the public notice and the importer's bona fides

Analysis: The Board had already found that the public notice had only prospective effect and that the import contract and letter of credit predated it, so the subsequent import could not be treated as offending the later clarification. The record also supported the view that the importer acted bona fide under the then prevailing policy position. On that basis, confiscation of the goods and imposition of penalty lacked legal support.

Conclusion: Confiscation and penalty were not sustainable and were set aside in favour of the assessee.

Final Conclusion: The appeal succeeded, and the confiscation order as well as the penalty were annulled with consequential relief to the assessee.

Ratio Decidendi: A dispute finally decided on the same legal issue arising from the same contract cannot be reopened for a subsequent consignment, and a later public notice operating prospectively cannot justify confiscation or penalty for an import made under an earlier bona fide contractual arrangement.

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