Court rules Customs cannot block clearance based on unmentioned policy, must adhere to import license terms. Petitioners win.

The court ruled in favor of the petitioners, holding that the Customs authorities were not justified in refusing clearance based on a policy restriction that was not explicitly mentioned in the import licence. The court emphasized that import policies cannot override the terms of an issued import licence. The petitioners had not violated any terms of the licence, and therefore, they were entitled to import the goods as per the terms of the licence. The court made the rule absolute in favor of the petitioners, discharged the bond, and ordered its return to the petitioners within two weeks.

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Issues:
Challenge to refusal of clearance by Customs authorities based on import policy restriction.

Analysis:
The case involved a dispute where the Customs authorities refused clearance of goods imported under an import licence due to an alleged restriction in the import policy. The petitioners had obtained an import licence for Zip Fasteners without any apparent limit on the quantity to be imported. However, the respondents claimed that there was a policy restriction limiting the import of Zip Fasteners to 5% of the face value of the licence as per the import policy of AM 81-82.

The petitioners contended that the licence they received did not contain any such restriction, and they were not informed of any such limitation even after the goods were imported and duty was assessed. The Customs authorities only raised this issue after the petition was filed and an affidavit-in-reply was submitted much later. The court noted that a letter from the Deputy Chief Controller of Imports and Exports, introducing the alleged restriction, was of no significance in this case.

Referring to a previous judgment, the court emphasized that import policies do not have the force of law and cannot override the terms of an issued import licence. As the petitioners had not violated any terms of the licence and had not imported any banned items, the Customs authorities were not justified in refusing clearance based on a policy restriction that was not explicitly mentioned in the licence.

Ultimately, the court ruled in favor of the petitioners, holding that they had the right to import the goods as per the terms of the licence issued to them. The court made the rule absolute in favor of the petitioners, discharged the bond executed in favor of the Collector of Customs, and ordered its return to the petitioners within two weeks. No costs were awarded in the case.

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