Retrospective import restrictions cannot impose new penal consequences on past shipments under later policy circulars.

A policy clarification or amendment that introduces a new import condition cannot be applied retrospectively where it would expose earlier imports to confiscation or penalty. The CESTAT held that the DGFT circular prescribing a moisture-content limit for dried garlic had no application to imports made before 17-9-1999, because no such condition existed in the earlier policy and retrospective application would create penal consequences for past transactions. Relief was therefore granted and the impugned orders were set aside.

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Issues: Whether the DGFT policy circular dated 17-9-1999, prescribing a moisture-content limit for "dried garlic", could be applied to imports made before that date.

Analysis: The circular introduced a moisture-content criterion where no such condition existed earlier in the policy. Applying it retrospectively would render earlier imports liable to confiscation and penalty. The Tribunal followed the principle that an amendment or clarification cannot be given retrospective effect where it would create penal consequences for past imports, and held that the later circular could not govern imports made before its issuance.

Conclusion: The circular had no application to imports made before 17-9-1999, and the appellants were entitled to relief.

Final Conclusion: The impugned orders were set aside and the appeals were allowed because the later policy circular could not be applied to pre-17-9-1999 imports.

Ratio Decidendi: A policy clarification or amendment that imposes a new condition affecting importability and exposing past imports to penal consequences cannot be applied retrospectively in the absence of express authority.

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