Valid DEEC import licences for polymer granules defeated customs demand and penalties where no misdeclaration or cancellation was shown.

DEEC licences that expressly covered import of LLDPE/LDPE/HDPE/PP granules were treated as valid and operative because no material showed misdeclaration by the exporters and the licences had not been cancelled. As the licences were transferable and the transferees imported goods within the licence terms, no breach of the import policy or of Notification No. 204/92-Customs was established, and the customs demand and proposed penalties did not survive.

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Issues: Whether the demand of customs duty and the proposed penalties were sustainable when the DEEC licences, though alleged to have been issued by mistake, permitted import of HDPE granules and had not been cancelled.

Analysis: The licences issued by the DGFT authorities expressly covered import of LLDPE/LDPE/HDPE/PP granules. No material was produced to show that the exporters had made any misdeclaration that induced the issuance of the licences. The licences remained uncancelled despite requests made by the investigating agency. Since the licences were transferable and the transferees imported goods covered by the licence terms, no breach of the relevant import policy or of the conditions of Notification No. 204/92-Customs was established.

Conclusion: The challenge to the Commissioner's order failed and the proceedings were not liable to be interfered with; the demand and penalties did not survive.

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