Valid import authorisation and no retrospective cancellation barred confiscation and penalty for the R-22 import.

Import of refrigerant gas R-22 by a 100% EOU was treated as covered by a valid Letter of Permission and specific approval issued by the competent Development Commissioner, so a separate special import licence was not required on these facts. Paragraph 6.2.7 of the Handbook of Procedure was applied to treat the Letter of Permission as sufficient authorisation, and the import was assessed by the permission in force on the date of shipment. Later cancellation of the Letter of Permission was held not to operate retrospectively to invalidate imports already completed, and repacking from bulk to retail was treated as manufacture satisfying the actual user condition. Absolute confiscation and penalty were therefore not sustainable.

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Issues: Whether import of refrigerant gas R-22 by a 100% EOU under a valid Letter of Permission and specific permission granted by the Development Commissioner required a separate special import licence, and whether subsequent cancellation of the Letter of Permission could justify confiscation and penalty.

Analysis: The goods were treated as restricted under the Foreign Trade Policy and the Ozone Depleting Substances (Regulation and Control) Rules, 2000, but the unit had obtained a Letter of Permission, broad banding approval, and a specific permission for import of R-22 from the Development Commissioner, who was the competent licensing authority for the EOU. Paragraph 6.2.7 of the Handbook of Procedure was applied to treat the Letter of Permission as an authorization for all purposes. The import documentation and permissions all pre-dated cancellation of the Letter of Permission, and the ruling relied on the settled principle that cancellation of a licence does not operate retrospectively to invalidate imports made during its currency. The activity of repacking from bulk to retail was treated as manufacture, satisfying the actual user condition, and the importing country satisfied the relevant treaty condition.

Conclusion: A separate special import licence was not required on these facts, the subsequent cancellation of the Letter of Permission did not defeat the imports, and absolute confiscation and penalty were not sustainable.

Ratio Decidendi: Where a competent licensing authority has issued valid permission covering the import and the import is completed before any later cancellation, the import must be tested by the licence or authorization in force on the date of shipment and cannot be invalidated retrospectively to support confiscation or penalty.

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