Import licence cancellation is prospective only, and customs cannot confiscate goods that conform to the licence description.

A subsequent cancellation of an import licence does not retrospectively invalidate imports already made when the licence was valid on the date of import. Goods imported earlier remained covered by the licence description, so Customs could not treat the import as unauthorised merely because the licence was later cancelled. Confiscation was also unsustainable where the authorities sought proof that the goods were constituent raw materials of the finished product, despite the licence permitting import of the described goods. The confiscation and penalty were set aside, with consequential relief.

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Issues: (i) whether cancellation of the import licence operated only prospectively and did not invalidate imports made before the cancellation order; (ii) whether confiscation of the imported goods for want of correlation with the end-product as raw material was legally sustainable.

Issue (i): whether cancellation of the import licence operated only prospectively and did not invalidate imports made before the cancellation order.

Analysis: The cancellation of the licence was made on 31 August 1979, whereas the goods had been imported in 1968. A subsequent cancellation cannot render an earlier import unauthorized when no valid cancellation existed on the date of import. The earlier cancellation orders had also been set aside and the later order was therefore not effective retrospectively.

Conclusion: The cancellation order operated only prospectively, and the imports made earlier were not invalidated on that ground.

Issue (ii): whether confiscation of the imported goods for want of correlation with the end-product as raw material was legally sustainable.

Analysis: The goods were covered by the description in the licence and the licensing authority had applied its mind while issuing the licence. Customs authorities could not go behind the licence to insist on proof that the goods were constituent raw materials of the finished product, when the licence itself permitted the import of the described goods. On that footing, confiscation could not be sustained.

Conclusion: Confiscation on the ground of absence of correlation with the end-product was not in accordance with law.

Final Conclusion: The appeal succeeded and the confiscation and penalty were set aside, with consequential relief to follow.

Ratio Decidendi: A subsequent cancellation of an import licence does not retrospectively invalidate imports already made, and Customs cannot deny the import merely by going behind the licence where the goods imported conform to its description.

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