Retrospective enforcement of Bank Realisation Certificate conditions was barred for earlier imports and bond obligations.

A later EXIM Policy amendment and circular introducing Bank Realisation Certificate production could not be applied to earlier imports or bond obligations where the pre-amended policy and governing circular did not require that condition. Because the bond terms were not shown to have been modified to include the later requirement, there was no basis to enforce the bond on that ground or sustain penalty. Duty demand and penalty founded on non-production of Bank Realisation Certificates were therefore unsustainable, and the appeals succeeded.

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Issues: Whether the requirement of producing Bank Realisation Certificates, introduced in the amended EXIM Policy and later circular, could be enforced against imports and bonds executed prior to that amendment so as to demand duty and impose penalty.

Analysis: The pre-amended EXIM Policy and the governing circular did not stipulate production of Bank Realisation Certificates by the nominated agency. That requirement was introduced only with effect from 1.4.2008 and was subsequently reflected in the Board circular dated 24.7.2008. The bonds in dispute, except one, related to an earlier period, and the bond terms were not shown to have been altered to incorporate the later condition. A condition introduced subsequently could not be read into earlier imports or earlier bonds, and there was therefore no basis to enforce the bond on that ground or to sustain penalty.

Conclusion: The demand of duty and the penalty founded on non-production of Bank Realisation Certificates were unsustainable; the appeals succeeded.

Ratio Decidendi: A condition introduced by subsequent amendment to the policy or circular cannot be applied retrospectively to earlier imports or bond obligations unless it was already part of the governing terms at the relevant time.

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