Open General Licence registration before shipment required; confiscation sustained, but redemption fine reduced for technical breach.

For imports under Open General Licence, the contract had to be registered with NEFED before shipment, as the Import and Export Policy read with the Handbook treated shipment date as the relevant criterion; registration only before arrival at an Indian port was insufficient, so late registration breached the policy and justified confiscation. The breach was treated as technical because the contracts were registered before the goods reached port and the requirement served mainly statistical control, so the redemption fine was reduced while confiscation was maintained.

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Issues: (i) Whether contracts for import under Open General Licence were required to be registered with NEFED before shipment of the goods or whether registration before the goods reached Indian port was sufficient; (ii) whether the redemption fine imposed on confiscation was excessive and liable to be reduced.

Issue (i): Whether contracts for import under Open General Licence were required to be registered with NEFED before shipment of the goods or whether registration before the goods reached Indian port was sufficient.

Analysis: Paragraph 33 of Appendix 6 of the Import and Export Policy had to be read with paragraph 208 of the Handbook of Import and Export Procedure, 1984-85. The handbook governed the validity of the licence and treated the date of shipment as the relevant criterion. The Open General Licence was part of the policy framework, and the statutory definition of import did not displace the policy and handbook provisions. On that construction, registration of the contract had to precede actual shipment.

Conclusion: Registration after shipment was a breach of the policy, and the goods were liable to confiscation.

Issue (ii): Whether the redemption fine imposed on confiscation was excessive and liable to be reduced.

Analysis: The breach was technical in nature, since the contracts had been registered before the goods reached the Indian port and the requirement was intended mainly for statistical control. In those circumstances, the redemption fine required rational reduction.

Conclusion: The redemption fine was reduced in both matters.

Final Conclusion: The confiscation was sustained, but the monetary penalty was reduced, so the appeals succeeded only to the limited extent of modification of the redemption fine.

Ratio Decidendi: For imports under Open General Licence governed by the policy and handbook, the contract must be registered before shipment, and where the breach is merely technical, the redemption fine may be reduced while sustaining confiscation.

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