Customs cannot club separately lawful imports to treat OGL components as prohibited complete television sets.

Imported components cleared under OGL could not be clubbed with separately licensed consignments to treat the combined imports as complete colour television sets in SKD condition, because the OGL goods were independently permissible and did not themselves have the essential character of a finished set. The goods were also not proved to be disposal goods or prohibited second-hand goods, as the finding rested on inference rather than evidence. Confiscation, redemption fine and penalty could not stand where the notice did not set out the grounds relied upon and the customs authority sought to raise new cases outside the notice.

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Issues: (i) Whether imported components cleared under OGL could be clubbed with goods imported against specific licences so as to treat the entire import as complete colour television sets in SKD condition and therefore as restricted goods; (ii) Whether the goods imported at Kandla Port were disposal goods or second-hand goods so as to be prohibited for import; (iii) Whether confiscation, fine and penalty were sustainable when the ground relied upon was not put to the importer in the notice and the imported OGL goods, by themselves, did not have the essential character of complete television sets.

Issue (i): Whether imported components cleared under OGL could be clubbed with goods imported against specific licences so as to treat the entire import as complete colour television sets in SKD condition and therefore as restricted goods?

Analysis: The policy permitted import of certain components under OGL by actual users and other components against licences. The goods cleared at Kandla Port were OGL items and, by themselves, did not constitute complete television sets. The goods imported under specific licences could not be used to deny clearance of the separately eligible OGL items merely because, when assembled together, the full range of components would make 90 television sets. The collector could not introduce a restriction into the policy by clubbing lawful imports made under different permissions. The items at Kandla also lacked the essential character of complete or finished television sets.

Conclusion: The clubbing of the OGL consignments with the licensed consignments was impermissible, and the OGL goods could not be treated as restricted SKD television sets.

Issue (ii): Whether the goods imported at Kandla Port were disposal goods or second-hand goods so as to be prohibited for import?

Analysis: The finding that the goods were disposal goods rested on inference rather than evidence. No material showed that the supplier had acquired used television sets for disposal as such, or that the imports were second-hand goods within the prohibited category. The mere concealment or alteration of markings did not establish that the goods had the character attributed to them by the department.

Conclusion: The goods were not proved to be disposal goods or prohibited second-hand goods.

Issue (iii): Whether confiscation, fine and penalty were sustainable when the ground relied upon was not put to the importer in the notice and the imported OGL goods, by themselves, did not have the essential character of complete television sets?

Analysis: Section 124 of the Customs Act, 1962 requires the grounds for confiscation to be set out in the notice, reflecting natural justice. A new case that the OGL goods were not required for manufacturing activity, or that condition 22 of the import policy was violated, could not be raised for the first time in appeal. Since the OGL goods did not, by themselves, amount to complete television sets and there was no valid basis to sustain confiscation under Section 111(d) of the Customs Act, 1962, the consequential penalty and fine also could not stand.

Conclusion: Confiscation, redemption fine and penalty were unsustainable and had to be set aside.

Final Conclusion: The importer's lawful entitlement to clear the OGL components could not be defeated by aggregating them with separately licensed consignments, and the confiscation order founded on that aggregation failed.

Ratio Decidendi: Where goods imported under OGL are independently permissible and do not themselves have the essential character of a prohibited complete article, the customs authority cannot club them with separately licensed imports to impose a restriction not found in the import policy; confiscation must also rest on grounds specifically stated in the notice.

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