Imported goods under a valid licence cannot be confiscated later merely because the licence is subsequently cancelled for misconduct.

Title to imported goods does not pass to a local intermediary merely because she takes delivery for limited purposes; where documents against sight payment remain with the foreign supplier's bankers and the goods are not cleared for home consumption, the deeming rule in the Import (Control) Order cannot vest ownership in her. Goods arriving under a subsisting advance import licence are not rendered confiscable under Section 111(d) of the Customs Act solely because the licence is later cancelled for alleged misuse. On these principles, confiscation was unsustainable and re-export was the proper consequence, subject to export duty and detention-related relief.

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Issues: (i) Whether title to the imported goods had passed to the local importer so as to expose the goods to confiscation for the importer's lapses. (ii) Whether confiscation under Section 111(d) of the Customs Act, 1962 was sustainable when the goods arrived under a valid licence and were later abandoned before clearance.

Issue (i): Whether title to the imported goods had passed to the local importer so as to expose the goods to confiscation for the importer's lapses.

Analysis: The definition of "importer" in Section 2(26) of the Customs Act, 1962 places the owner of the goods ahead of a person merely holding himself out as importer. The goods had been ordered on documents against sight payment and the contractual documents had not been retired from the foreign supplier's bankers. The local importer had represented herself as importer only for the limited purpose of taking delivery and, since the goods were not cleared for home consumption, the deeming provision in Clause 5(3)(ii) of the Import (Control) Order, 1955 could not be used to treat property as having vested in her.

Conclusion: Title had not passed to the local importer and the goods could not be proceeded against on that basis.

Issue (ii): Whether confiscation under Section 111(d) of the Customs Act, 1962 was sustainable when the goods arrived under a valid licence and were later abandoned before clearance.

Analysis: The goods arrived at the port while the advance import licence was still valid. Subsequent cancellation of the licence for alleged earlier misuse by the local importer did not retroactively make the import of these consignments unauthorised. Section 111(d) applied only where the import was prohibited, and the facts did not show that the goods had become liable to confiscation on that footing. Since the goods remained the property of the foreign exporter and had not been validly cleared, re-export was the proper consequence, together with payment of the requisite export duty and detention-related relief.

Conclusion: Confiscation under Section 111(d) was not justified and re-export had to be permitted.

Final Conclusion: The confiscation order could not be sustained, the appeal failed, and the importer was entitled to re-export of the goods with detention-related relief and payment of export duty as directed.

Ratio Decidendi: Goods imported under a subsisting licence cannot be confiscated under Section 111(d) of the Customs Act, 1962 merely because the licence is later cancelled for the importer's misconduct, and a person who has not acquired title to the goods cannot be treated as the owner for confiscation purposes.

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