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Issues: Whether confiscation of the six imported cars and the consequential redemption fine and penalty were justified when the goods were covered by a valid EPCG licence, had not yet been cleared, and no Bill of Entry had been filed.
Analysis: The goods were imported under a valid EPCG licence issued by the DGFT and were still lying with Customs without assessment under the exemption notification. The order of confiscation rested on a presumption that the importer may misuse the scheme in future, but mere apprehension of possible misuse cannot sustain confiscation or penal action. The cited precedent concerning forged or fraudulent licences was held inapplicable on the facts, while the principle that Customs cannot deny relief when the licence is valid and not questioned by the licensing authority was treated as governing.
Conclusion: The confiscation, redemption fine, and penalties were unsustainable and were set aside in favour of the assessee.
Final Conclusion: The appeals succeeded because Customs could not penalize the importer for anticipated misuse where the import was under a valid licence and the goods had not been cleared under the scheme.
Ratio Decidendi: Goods imported under a valid licence cannot be confiscated or penalized by Customs on a mere presumption of future misuse; any alleged misrepresentation in obtaining the licence is for the licensing authority to examine unless fraud is established.
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