Import licence interpretation for ball bearing parts: ambiguity favoured the importer, and confiscation could not stand.

Imported inner races, outer races and cages of ball bearings were treated as component parts, not as complete ball bearings, for the purpose of the import licence issued under the July/December 1955 Import Trade Control Policy Book. The policy book then in force contained no specific entry covering component parts of ball bearings, and that separate entry was introduced only in the later 1956 policy. Applying the rule that ambiguity in fiscal and penal statutes must be resolved in favour of the importer, the HC held that the goods fell within the licence and could not be treated as unauthorised imports. The order of confiscation and fine was therefore not sustainable.

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Issues: Whether the imported inner races, outer races and cage, being parts of ball bearings, were covered by the import licence issued under Serial No. 65(5)(iii) of Part V of the Import Trade Control Policy Book for July/December 1955, or whether they fell within the entry for ball bearings so as to render the import unauthorised.

Analysis: The licence was issued with reference to the policy book in force for July/December 1955, and that book did not contain any entry for component parts of ball bearings under Serial No. 19(1)(viii); that entry was introduced only in the later policy book for July/December 1956. The goods imported were component parts of ball bearings and could not be equated with complete ball bearings. In fiscal and penal statutes, any ambiguity must operate in favour of the importer, and the later insertion of a specific entry for component parts showed that such goods were not previously covered by the ball bearing entry. The Collector's reliance on the later policy position and on the timing of the letter of credit could not sustain confiscation when the import was otherwise within the licence.

Conclusion: The goods were covered by the licence and the order of confiscation and fine could not be sustained. The finding was in favour of the assessee.

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