Voidable import licence remains effective until cancelled; completed imports under a valid licence cannot be treated as unauthorized later.

A REP licence transferred for value to a bona fide transferee without notice remained effective for imports completed before any later suspension or cancellation. A licence said to have been obtained by misrepresentation is voidable, not void ab initio, and continues to operate until lawfully avoided or cancelled. On that basis, goods imported while the licence was valid at the time of contract, shipment, arrival and filing of the bill of entry could not be treated as unauthorized merely because the licence was later cancelled. Confiscation and redemption fine were therefore not sustainable, and the completed import was treated as lawful.

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Issues: Whether goods imported under a REP licence transferred for value to a bona fide transferee could be confiscated merely because the licence was later suspended or cancelled on the ground that it had been obtained by misrepresentation.

Analysis: The licence was valid when transferred, when the contract was made, when the letter of credit was opened, when the goods were shipped, when they arrived, and when the bill of entry was filed. The appellant was a bona fide transferee for value without notice. A licence said to have been obtained by fraud is not void ab initio; it is only voidable and remains effective until avoided or cancelled in accordance with law. The adjudicating authority could not substitute an external legal opinion for its own decision, and no contrary binding authority was shown to depart from the settled rule that an import completed before suspension or cancellation of the licence is not rendered unauthorized by the later event.

Conclusion: Confiscation was not sustainable, because the imports were made under a valid licence and the later suspension or cancellation did not invalidate the completed import.

Final Conclusion: The importation was held to be lawful at the time it was made, and the confiscation order with redemption fine was set aside.

Ratio Decidendi: A licence obtained by fraud remains operative until it is lawfully avoided, and imports completed before its suspension or cancellation cannot be treated as unauthorized solely by reason of the later cancellation.

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