Canalised imports cannot rely on an additional licence unless the prevailing policy expressly permits direct import.

An additional import licence issued under an earlier court order permitted only goods importable under both the earlier and prevailing import policy; it did not authorise direct import of a canalised item where the current policy required channelised import through the designated public agency. Palm kernel fatty acid was specifically canalised under the Import Policy 1985-88, so its import under the additional licence was not permissible. The open general licence and actual user arguments also failed because the goods were covered by a specific prohibition and the factual basis for actual user import was absent. The clearance order was therefore unsustainable.

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Issues: (i) whether palm kernel fatty acid, being a canalised item under the prevailing import policy, could be imported under an additional licence issued pursuant to the earlier judicial order; and (ii) whether the respondents could support importability on the basis that they were actual users industrial and that the goods fell within the open general licence category.

Issue (i): whether palm kernel fatty acid, being a canalised item under the prevailing import policy, could be imported under an additional licence issued pursuant to the earlier judicial order.

Analysis: The earlier order granting entitlement under additional licences was read as permitting import only of those items which were importable under the policy in force when the export house certificate was wrongly refused and also importable under the policy prevailing at the time of import. Canalised items ordinarily required import through the designated public agency, and the order of 18 April 1985 could not be construed as authorising direct import of a canalised item where the prevailing policy contained no such permission. Palm kernel fatty acid was specifically listed as a canalised item under the Import Policy 1985-88 and there was no provision allowing its import by an export house holding an additional licence.

Conclusion: The import of palm kernel fatty acid under the additional licence was not permissible and the claim failed.

Issue (ii): whether the respondents could support importability on the basis that they were actual users industrial and that the goods fell within the open general licence category.

Analysis: The open general licence argument could not succeed because the goods were specifically covered by a prohibition applicable to fatty acid and acid oil, and the policy treated such items as importable only by the State Trading Corporation on the basis of foreign exchange released by the Government. Further, the actual importation had been made by another entity and not by the respondents themselves, so the factual premise for claiming actual user status was absent.

Conclusion: The respondents were not entitled to rely on the open general licence or actual user argument.

Final Conclusion: The High Court's order permitting clearance of the goods was unsustainable, and the appellant succeeded in challenging the import clearance.

Ratio Decidendi: An additional licence issued pursuant to the earlier order authorises only such goods as are importable under both the earlier and the prevailing import policy, and a specifically canalised item cannot be imported directly unless the policy expressly permits it.

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