Import-policy clarification by licensing authority prevails over Customs' contrary view on doubtful classification and canalisation.

Under the import-policy framework, Customs could not disregard a clarification issued by the licensing authority on a doubtful classification and canalisation question. The communication had been received before adjudication and, despite being open, retained binding effect because the policy treated the Chief Controller's interpretation as final in cases of doubt. The Collector's order allowing clearance was therefore unsustainable and was set aside. The appeal succeeded, the adjudication in favour of the importer was annulled, and no remand was made because the goods had already been released and no penalty was warranted.

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Issues: Whether the Customs authority could ignore the clarification issued by the Chief Controller of Imports and Exports on the classification and canalisation of the imported goods, and whether the order allowing clearance was bad in law.

Analysis: The clarification from the licensing authority had been received before adjudication and was an open communication referring to the relevant import-control circular. The governing import-policy framework treated the Chief Controller's interpretation as final in case of doubt, and the Customs authority was not entitled to substitute its own view on the policy question after seeking that clarification. The open character of the communication did not dilute its binding effect for purposes of import-control interpretation.

Conclusion: The order of the Collector was held to be unsustainable and was set aside; the department succeeded on the issue.

Final Conclusion: The appeal was allowed, the adjudication order in favour of the importer was annulled, and the matter was not remanded because the goods had already been released and no penalty was warranted.

Ratio Decidendi: Where the import-policy framework makes the licensing authority's interpretation final, Customs authorities cannot disregard a clarification issued by that authority on a doubtful import-control question.

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