Customs confiscation fails where no valid import prohibition exists under the Foreign Trade law's deeming fiction.

Confiscation under Section 111(d) of the Customs Act could be sustained only if the import was prohibited under a valid statutory order attracting the deeming fiction in Section 3(3) of the Foreign Trade (Development and Regulation) Act. The notification relied on was issued under Section 5 of that Act, not as an order under Section 3(2), so the statutory basis for treating the goods as prohibited was absent. On that footing, the Tribunal's view that confiscation and penalty could not stand was upheld, and the appeal was dismissed.

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Issues: Whether confiscation of the imported goods under Section 111(d) of the Customs Act, 1962 could be sustained on the basis of Section 3(2) and Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992.

Analysis: The Tribunal found that the notification relied upon was issued under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 and not as an order under Section 3(2) of that Act. Section 3(3) creates a deeming fiction treating goods covered by an order under Section 3(2) as prohibited goods under Section 11 of the Customs Act, 1962. Since the requisite statutory foundation for invoking the prohibition was absent, the confiscation order under Section 111(d) could not stand. The High Court found no reason to interfere with that appreciation of facts and law.

Conclusion: The confiscation and penalty could not be sustained, and the appeal failed.

Final Conclusion: The order of the Tribunal was affirmed and the appeal was dismissed.

Ratio Decidendi: Section 111(d) of the Customs Act, 1962 can be invoked only when the import is shown to be prohibited under a valid statutory order attracting the deeming fiction in Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992.

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