Actual user and non-transferable licence conditions can attract penalty when imported goods are cleared without proof of compliance.

A holder of a non-transferable REP licence subject to an actual user condition remained liable for penalty where goods were cleared under the licence through a letter of authority and no material showed compliance with the licence conditions. The fact that customs treated an earlier import irregularity as a technical breach did not negate the underlying contravention or absolve the licence holder from responsibility. The governing import control provisions were attracted because the goods were imported and cleared under the petitioner's licence without proof of authorised use, so penal liability followed for breach of the licence conditions.

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Issues: Whether the petitioner, as holder of a non-transferable REP licence subject to actual user condition, could be penalised for misutilisation of goods imported and cleared through the licence holder's letter of authority.

Analysis: The licence permitted import of OGL items only for actual use and was expressly non-transferable. The goods were cleared under the petitioner's licence and were not shown to have been used in accordance with the licence conditions. The circumstance that the customs authorities treated the earlier import-related irregularity as a technical breach did not mean that the goods were confiscated or that the petitioner escaped responsibility for violation of the licence conditions. Since the imported goods were cleared under the petitioner's licence and no material was produced to show compliance with the actual user requirement, penal liability under the governing import control provisions was attracted.

Conclusion: The petitioner was liable for penalty for breach of the licence conditions, and the challenge to the penalty failed.

Ratio Decidendi: Where goods are cleared under a licence subject to actual user and non-transferability, the licence holder remains liable for contravention of the licence conditions and cannot avoid penalty merely because the immediate importation or clearance was effected by a letter of authority holder.

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