Restricted export goods need licence compliance, but absolute confiscation is unjustified; valuation must reflect purchase price and reasonable margin.

Medicines attempted for export without the required drug licence and permission were treated as restricted goods, so confiscation was sustainable, but absolute confiscation was not justified. Valuation on an MRP basis was held excessive; the proper basis was purchase price with a reasonable trading margin. The penalty was also reduced in view of the lapse of time and the loss already suffered by the exporter. Relief was therefore granted against absolute confiscation, excessive valuation, and the original penalty quantum.

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Issues: Whether medicines carried for export without the requisite drug licence and permission were liable to absolute confiscation; whether valuation on MRP basis was sustainable; and whether the penalty required reduction.

Analysis: The medicines were attempted to be exported in commercial quantity and, on the facts, were not prohibited goods but restricted goods requiring permission/licence from the drug control authorities. In such circumstances, confiscation was justified, but absolute confiscation was not warranted. The goods were therefore liable to confiscation with the corresponding entitlement to redemption in principle, though redemption had become impracticable as the goods had already been disposed of. On valuation, the adoption of MRP was held to be excessive; the proper basis was the purchase price with a reasonable trading margin. The long lapse of time and the loss already suffered by the appellant also weighed in favour of reducing the penalty.

Conclusion: Absolute confiscation was set aside, the valuation was reduced to the purchase price plus reasonable profit, and the penalty was reduced from Rs. 2,50,000 to Rs. 50,000.

Final Conclusion: The appeal succeeded only in part, with relief granted against absolute confiscation, excessive valuation, and the original quantum of penalty.

Ratio Decidendi: Where goods are restricted rather than prohibited, confiscation may be sustained, but absolute confiscation is not justified merely because the export was attempted without the necessary licence, and valuation must reflect the real purchase value rather than MRP where that basis is excessive.

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