Import restriction must arise by notification, not circular, so later controls could not justify confiscation and penalty.

Gold medallions and gold granules imported on the relevant dates were not shown to have been brought within the restricted import category, because import policy can be changed only by amendment or notification under the Foreign Trade (Development and Regulation) Act, 1992 and not by circular. The later notifications restricting such imports operated prospectively, while RBI circulars governed only the banking mechanism for nominated banks and agencies, not import policy itself. On that basis, the confiscation and penalty orders could not be sustained.

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Issues: Whether gold medallions and gold granules imported on the relevant dates were freely importable or became restricted only by subsequent notifications, and whether the confiscation and penalty orders could therefore be sustained.

Analysis: The Foreign Trade (Development and Regulation) Act, 1992 empowers the Central Government to regulate imports and exports by notification, and the Foreign Trade Policy framed under Section 5 of that Act has statutory force. A change from free to restricted import can be made only by amendment or notification, not by a circular. On the dates of import, the relevant goods had not yet been brought within the restricted category. The later notifications restricting imports operated only thereafter. The record also showed that the Reserve Bank of India circulars govern the mechanism for nominated banks and nominated agencies, while the domain of regulating import policy remains with the Ministry of Commerce and the DGFT.

Conclusion: The imports were not shown to be restricted on the dates of import, and the confiscation and penalty orders could not be sustained.

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