Re-export of imported goods restricted for domestic use can be prohibited by necessary implication under customs policy.

Goods imported under a special import policy for domestic use may still be treated as prohibited for export where the policy scheme, headings, and operative conditions show by necessary implication that re-export in the same state is outside the permission granted. Clearance for home consumption under the Customs Act, 1962 is not, by itself, an absolute bar to later export; however, the relevant Open General Licence and policy language governing life-saving equipment intended for use in India did not contemplate export outside India. On that construction, attempted re-export attracted confiscation under Section 113(d) and penalty under Section 114.

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Issues: Whether goods imported under Open General Licence and cleared for home consumption could be re-exported in the same form, and whether such re-export contravened the import conditions so as to render the goods prohibited and attract confiscation and penalty under the Customs Act, 1962.

Analysis: The statutory scheme of the Customs Act, 1962 does not treat clearance for home consumption as an absolute bar against later export, and the references to warehousing and exportation do not compel the conclusion that only warehoused goods may be re-exported. At the same time, the import permission under the relevant Import-Export Policy and Open General Licence had to be read in the context of the special category of life-saving equipment listed in Appendix 6, List 2, which was meant for use in India. The words "stock and sale" were not construed as authorising export outside India, and the scheme, heading, duty exemption, and policy language indicated that re-export of such goods in the same state was not contemplated. The Chief Controller's interpretation, being final under the policy, supported this construction. The goods were therefore treated as prohibited goods within the meaning of the Customs Act.

Conclusion: The attempted re-export was held to be prohibited by necessary implication, and confiscation under Section 113(d) and penalty under Section 114 of the Customs Act, 1962 were upheld against the assessee.

Ratio Decidendi: Goods imported under a special import policy for domestic use may be treated as prohibited for export where the policy scheme, headings, and operative conditions show by necessary implication that re-export in the same state is outside the permission granted.

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