Import licence requirement for changed import policy upheld, while bona fide conduct justified reduction of redemption fine.

Import of tantalum sheets was treated as requiring a valid licence where the goods were shifted out of the Open General Licence category before arrival and the letter of credit was opened only after the policy change. On that basis, clearance could not proceed under Open General Licence and confiscability was upheld for absence of a valid import licence. However, the importer's bona fide conduct, actual-user status, and prior steps toward import justified a lenient view on penalty, so the redemption fine was reduced.

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Issues: Whether the imported tantalum sheets, brought in after the goods were shifted out of the Open General Licence list and made subject to import licence, were liable to confiscation for want of a valid licence, and whether the redemption fine imposed required reduction.

Analysis: The goods had originally been permissible under Open General Licence, but before the goods arrived the policy was changed and a licence became necessary. The importer opened the letter of credit only after the change, so clearance could not be made under Open General Licence. The import was therefore not covered by a valid licence and confiscability was upheld. At the same time, the importer was the actual user, had acted bona fide, and had taken steps for import well before the policy change, which justified a lenient view on penalty.

Conclusion: The finding of confiscability was sustained, but the redemption fine was reduced from Rs. 25,000 to Rs. 15,000.

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