Disjunctive reading of Import-Export Policy permits related imports by manufacturer-exporters under a valid REP licence.

Para 204(1) of the Import-Export Policy, 1985/1988 was construed to permit a manufacturer-exporter holding a valid REP licence to import raw materials, components, consumables, spares and packing materials related either to the products exported by him or to the products manufactured by him. The expression was treated as disjunctive, not conjunctive. On that reading, imports of umbrella cloth panels by a manufacturer of umbrellas satisfied the policy nexus requirement because the goods were related to the relevant manufactured products. The confiscation and penalty under the Customs Act, 1962 were therefore not sustainable.

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Issues: Whether, under para 204(1) of the Import-Export Policy, 1985/1988, a manufacturer-exporter holding a valid REP licence could import raw materials, components, consumables, spares and packing materials related to the select products exported or manufactured by him; and whether the confiscation and penalty under the Customs Act, 1962 were sustainable.

Analysis: The governing expression in para 204(1) was construed in line with the earlier Tribunal rulings as disjunctive rather than conjunctive. On that construction, a manufacturer-exporter is entitled to import items related to the select products either exported by him or manufactured by him. Since the appellant was manufacturing umbrellas and the imported goods were umbrella cloth panels, the imports satisfied the policy requirement of relationship with the relevant products.

Conclusion: The confiscation and penalty were not sustainable and the appeal was allowed.

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