Canalised import and redemption fine must be assessed on parity, with confiscation upheld for unlawful Open General Licence import

After the import policy amendment canalised industrial coconut oil, private import under Open General Licence was no longer permissible, so the import was treated as unlawful and confiscation with an option of redemption fine was upheld. On the quantum of fine, the authorities had to follow parity with an identical comparable case; the distinction drawn on the importer's status as an established export house was not rationally justified. The redemption fine was therefore required to be reduced on a non-discriminatory basis, with refund of any excess already paid.

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Issues: (i) Whether the appellants were entitled to import industrial coconut oil under Open General Licence after the Import Policy was amended and the item became canalised; (ii) Whether the quantum of redemption fine should be reduced to the same level as granted in a comparable case.

Issue (i): Whether the appellants were entitled to import industrial coconut oil under Open General Licence after the Import Policy was amended and the item became canalised.

Analysis: The import had been made after the relevant policy amendment took effect. Once industrial coconut oil stood canalised, import by private importers under Open General Licence was not permissible and the Customs authorities were justified in treating the import as illegal and ordering confiscation with an option to redeem the goods on payment of fine.

Conclusion: The issue was decided against the appellants; the import was not lawful under Open General Licence.

Issue (ii): Whether the quantum of redemption fine should be reduced to the same level as granted in a comparable case.

Analysis: The Tribunal failed to give proper effect to the comparable concession earlier granted in an identical matter and relied on an unreasonable distinction that the appellants were an established export house. The differentiation was not justified, and equal treatment required the same concession in the quantum of redemption fine.

Conclusion: The issue was decided in favour of the appellants; the redemption fine was required to be reduced to 35 per cent of the amount determined by the authorities.

Final Conclusion: The confiscation was upheld, but the redemption fine was substantially reduced on parity grounds, with refund of excess amount if already paid.

Ratio Decidendi: Where a canalised import is made after the relevant policy amendment, confiscation with redemption fine is valid, but the quantum of fine must be fixed on a non-discriminatory basis and consistent with comparable cases unless a rational distinction is shown.

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