DGFT notification under Section 5 does not by itself make imports prohibited or confiscable under Customs law.

A DGFT notification issued under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 does not by itself create a deemed prohibition under Section 3(3) or render imported goods prohibited under Section 11 of the Customs Act, 1962. Only goods covered by an order under Section 3(2), read with the deeming provision in Section 3(3), can be treated as prohibited for customs purposes. On that basis, the confiscation of the imported goods could not be sustained, and the confiscation order was set aside in favour of the assessee.

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Issues: Whether the imported goods were liable to be treated as prohibited goods and confiscated under the Customs Act on the basis of the DGFT notification issued under the Foreign Trade (Development and Regulation) Act.

Analysis: The notification relied upon by the revenue was issued under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, and not under Section 3(2) of that Act. Only goods covered by an order under Section 3(2), as read with the deeming provision in Section 3(3), can be treated as prohibited for the purpose of Section 11 of the Customs Act, 1962. Since the legal effect of the notification had not been examined in the earlier final order, and identical later cases had reached the contrary conclusion, the earlier finding that the goods were prohibited could not stand.

Conclusion: The goods were not prohibited goods and were not liable for confiscation; the confiscation order was set aside in favour of the assessee.

Ratio Decidendi: A notification issued under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 does not, by itself, attract the deeming prohibition under Section 3(3) or render the goods prohibited under Section 11 of the Customs Act, 1962.

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