Import licence conditions cannot be expanded by Customs when actual user status and permitted end-product use are established.

Where an import licence permits an actual user to import goods required for manufacture of specified end-products, Customs cannot impose an extra condition by treating the DGTD certificate as an independent restriction. Once actual user status and the nexus between the imported goods and permitted end-products were established, confiscation on the ground that the goods did not match the end-products named in the DGTD certificate amounted to an impermissible enlargement of the licence. The Bombay HC held that the confiscation order had no legal basis and was unsustainable, so the importer succeeded.

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Issues: Whether the Customs Authorities could confiscate the imported goods on the ground that, although the importer was an actual user and the goods were required for manufacture of licensed end-products, the goods did not match the end-products mentioned in the DGTD certificate.

Analysis: The licence permitted import by the actual user of items required for manufacture of the end-products covered by the relevant appendices of the import policy. Once it was established that the importer was an actual user and the imported goods were required for manufacture of permitted end-products, the Customs Authorities could not add a further restriction by treating the DGTD certificate as an independent condition of the licence. The authorities below proceeded on an impermissible enlargement of the licence and therefore had no basis to confiscate the goods under the cited provisions.

Conclusion: The confiscation order was unsustainable and the importer succeeded.

Ratio Decidendi: Where an import licence permits an actual user to import goods required for manufacture of specified end-products, Customs cannot confiscate the goods by importing additional restrictions not found in the licence or by treating a DGTD certificate as a separate condition of import.

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