Advance licence imports: Customs cannot seize goods until the licensing authority determines duty becomes payable.

Goods imported under an advance licence subject to export obligations remained under the import control scheme until the competent licensing authority determined that customs duty had become payable on default. On that basis, the Customs Department could not independently seize the goods, interfere with the licence-holder's rights, or invoke confiscatory powers under the Customs Act at that stage; any material gathered by Customs could only be forwarded to the licensing authority for action under the scheme.

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Issues: Whether the Customs authorities had jurisdiction to seize the imported goods and interfere with the goods covered by advance licences issued under the import control scheme, and whether such powers remained with the licensing authority until a decision was taken that customs duty had become payable.

Analysis: The imports were made under advance licences issued under the import control regime and were subject to export obligations, bond requirements, and follow-up action by the licensing authority. The scheme contemplated that liability to customs duty would arise only upon default and upon a decision by the authority administering the import control law. Until that stage, the Customs Department could not independently assume jurisdiction over the goods or investigate utilisation so as to seize them or proceed under the Customs Act. The materials collected by the Customs authorities, if relevant, could be forwarded to the licensing authority for action under the scheme. The view taken was consistent with the cited precedent that Customs authorities could not sit in judgment over the licensing authority's powers.

Conclusion: The Customs authorities had no jurisdiction, at this stage, to seize the goods or interfere with the petitioner's rights under the advance licence scheme.

Final Conclusion: The appeals failed and the interim protection granted by the learned single Judge was maintained.

Ratio Decidendi: Where goods are imported under an advance licence subject to export obligations, the Customs authorities cannot exercise seizure or confiscatory powers until the competent licensing authority determines that customs duty has become payable on account of non-fulfilment of the scheme conditions.

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