Import policy conditions must be enforced strictly, but impossible certification requirements cannot justify confiscation or penalty.

An import-policy condition requiring new motor cars to be imported from the country of manufacture was enforced strictly, so shipment through or invoicing via another country did not satisfy the requirement and confiscation was justified for that breach. By contrast, where the required homologation or type approval/COP certificate could not be obtained from the specified accredited agency, the law did not require performance of an impossible act, so non-production of that certificate could not support confiscation. As a result, the monetary consequences were moderated: redemption fine and penalty were reduced, while confiscation for violation of the country-of-manufacture condition was upheld.

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Issues: (i) Whether import of motor cars contrary to the condition that the vehicle be imported from the country of manufacture justified confiscation under the Customs Act, and (ii) whether non-production of homologation certificate and type approval/COP certificate in the stated circumstances warranted confiscation, fine and penalty.

Issue (i): Whether import of motor cars contrary to the condition that the vehicle be imported from the country of manufacture justified confiscation under the Customs Act.

Analysis: The import policy expressly required the new vehicle to be imported from the country of manufacture. The fact that the goods were manufactured in one country, invoiced through another and shipped from a third did not amount to compliance with that condition. The policy could not be diluted by treating proof of the route of shipment as equivalent to satisfaction of the country-of-manufacture requirement, and the later amendment could not be applied retrospectively to past imports.

Conclusion: Confiscation for breach of the country-of-manufacture condition was justified and was against the assessee.

Issue (ii): Whether non-production of homologation certificate and type approval/COP certificate in the stated circumstances warranted confiscation, fine and penalty.

Analysis: The policy required a type approval certificate/COP from an internationally accredited agency of the country of origin. In relation to cars manufactured in the relevant foreign jurisdiction, the record showed that the required certificate could not be obtained from the specified agency. The Tribunal followed the binding view that the law does not require performance of an impossible act. On that basis, the absence of the certificate could not be treated as a ground for confiscation. Since the contravention of this condition was not sustainable, the monetary consequences had to be moderated accordingly.

Conclusion: The assessee was not liable to confiscation on this ground, and the fine and penalty were liable to reduction.

Final Conclusion: The appeals succeeded only in part. Confiscation was upheld for violation of the country-of-manufacture condition, but the redemption fine and penalty were reduced in view of the other conditions being treated as not violated.

Ratio Decidendi: A clear import-policy condition requiring import from the country of manufacture must be enforced as written, but an importer cannot be penalized for failure to obtain a prescribed certificate when compliance is impossible and the law does not compel the impossible.

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