Retrospective import licence amendment validated earlier imports and defeated confiscation and penalty under customs law.

A retrospective amendment to an import licence can validate imports made before the amendment where the competent licensing authority has relaxed the relevant import condition under the Foreign Trade (Development and Regulation) Act, 1992 and the import policy. Customs authorities cannot disregard the amended licence on the ground of policy inconsistency, because the licensing function and customs adjudication operate in distinct spheres. The view that such an amendment can take effect only prospectively was rejected, and the analogy with cancellation of a licence was held inapplicable. On that basis, the amended licence covered the goods and confiscation under section 111(d) and penalty under section 112 were not sustainable.

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Issues: Whether a retrospective amendment to an import licence could validate imports already made before the amendment, and whether confiscation under section 111(d) and penalty under section 112 could be sustained.

Analysis: The licensing authority was competent under section 3 of the Foreign Trade (Development and Regulation) Act, 1992 read with the import policy to relax the relevant condition governing second-hand goods. Once the licence was amended by the competent authority, the amendment was capable of operating retrospectively to cover imports already made. The customs authorities could not refuse effect to the amended licence on the premise that the amendment was inconsistent with the policy, because the spheres of the licensing authority and the customs adjudicating authority are distinct. The reasoning that an amendment can operate only prospectively was rejected, and the analogy with cancellation of a licence did not alter the position.

Conclusion: The amended licence covered the imported goods, and the confiscation under section 111(d) and the penalty under section 112 were not sustainable.

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