Pre-ban Letter of Credit protection kept imported moulds eligible for OGL clearance and defeated customs confiscation.

A pre-ban irrevocable Letter of Credit for imported moulds was treated as protected under the relevant import policy because it was opened before moulds were deleted from the Open General Licence and the later extension did not create a fresh commitment. Shipment within the extended credit period and the 90-day window in the public notice kept the imports within the protected category. The clarification from the import policy authorities supported this treatment, and the REP licence provisions invoked by the customs authority were held inapplicable. Confiscation and penalty under the Customs Act were therefore set aside.

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Issues: Whether the imported moulds were covered by the Open General Licence in view of the pre-existing Letter of Credit and the relevant public notices, and whether confiscation and penalty under the Customs Act were sustainable.

Analysis: The Letter of Credit had been opened before the deletion of moulds from the Open General Licence. Its subsequent extension did not create a fresh commitment when the shipment was still made within the period permitted by the extended Letter of Credit and within the 90-day window contemplated by the later public notice. The clarification issued by the import policy authorities supported treatment of such pre-ban commitments as protected. The provisions invoked by the adjudicating authority relating to REP licences had no application to the facts of the case.

Conclusion: The imported moulds were held to be covered by the Open General Licence, and the confiscation and penalty were set aside.

Ratio Decidendi: An extension or revalidation of a pre-ban irrevocable Letter of Credit does not amount to a fresh commitment where shipment is made within the period protected by the relevant import policy notice, and the goods remain eligible for OGL clearance.

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