Later DGFT licence covering imported consignments defeats confiscation, penalty, and bank guarantee appropriation under the Exim Policy.

Where imported goods were initially cleared without a licence, subsequent DGFT clarification and a later licence specifically covering the same consignments removed the basis for treating the imports as unauthorised. The Exim Policy treated DGFT interpretation on such importability questions as final and binding, and also allowed clearance of goods already shipped or arrived against a later-issued licence. On that footing, customs could not reject the DGFT licence, question its validity, or continue confiscation, appropriation of the bank guarantee, and penalty once the licence covered the goods. Consequential release of the bond and bank guarantee followed.

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Issues: Whether goods imported without an initial licence could be treated as unauthorised and confiscated after the DGFT issued a licence specifically covering the imports, and whether the customs authorities could reject that licence and retain the encashed bank guarantee and penalty.

Analysis: The import was made after the importer had sought and obtained DGFT clarification that the goods were freely importable. The Tribunal noted that the Exim Policy made the DGFT's interpretation on such questions final and binding, and also permitted clearance of goods already shipped or arrived against a licence issued subsequently. Once the DGFT issued a licence specifically covering the very consignments in question, the customs authorities could not challenge the DGFT's power to issue that licence or treat it as invalid. In those circumstances, the basis for confiscation, appropriation of the bank guarantee, and the penalty disappeared.

Conclusion: The confiscation and penalty were unsustainable, and the importer was entitled to release of the bond and bank guarantee along with consequential relief.

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