Import licence requirement for industrial raw material waived where policy withdrawal made base paper freely importable for actual user clearance.

Imported base paper in jumbo rolls, brought in by an actual user as industrial raw material for manufacture of particle board, was treated as freely importable once the policy position under Heading 48.11 and the relevant notifications showed that the earlier restriction had been withdrawn. The analysis under the Foreign Trade (Development and Regulation) Act, 1992 and the Export and Import Policy 1997-2002 indicates that a specific import licence was not required in that setting, because the goods were not consumer goods but raw material for industrial use. On that basis, denial of clearance and the consequential redemption fine were not justified, and the impugned orders were set aside.

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Issues: Whether the imported base paper in jumbo rolls, imported by an actual user for use as industrial raw material, required a specific import licence and could be cleared despite the policy change affecting imports under Heading 48.11.

Analysis: The imports were examined in the context of the Foreign Trade (Development and Regulation) Act, 1992 and the Export and Import Policy 1997-2002, especially the notifications issued under the policy changes of 13-4-1998 and 17-8-1998. The imported goods were treated by the authorities as restricted on the date of import, but the later policy position showed that large rolls and sheets under Heading 48.11 had earlier been freely importable and that the restriction was subsequently withdrawn. The goods were imported by an actual user for manufacture of particle board and were not consumer goods but industrial raw material. In that setting, the denial of clearance and consequential redemption fine were not justified.

Conclusion: The import did not warrant insistence on a specific licence and the goods were entitled to clearance; the redemption fine and impugned orders were set aside in favour of the assessee.

Final Conclusion: The appeals succeeded and the imported goods were permitted to be cleared as industrial raw material for actual user consumption.

Ratio Decidendi: Where imported goods are industrial raw material for an actual user and the policy change withdrawing a restriction applies, clearance cannot be denied on the footing of a specific licence requirement merely because of the restrictive position alleged on the date of import.

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