REP licence flexibility and bona fide disclosure may justify relief from redemption fine and personal penalty in ship-breaking imports.

Import policy on REP licences and clubbing of flexibility value was applied strictly, with clubbing appearing expressly provided only for non-OGL capital goods. The article notes that importers who had sought clarification, disclosed proposed ship-for-breaking imports, and obtained transfer-based licences without objection were later supported by a policy amendment and circulars recognising such imports through valid REP licences. The amendment was not treated as retrospective, but it informed adjudication within the same 1988-91 regime. On that basis, bona fide conduct and the later policy position were said to make heavy redemption fine and personal penalty unwarranted, although confiscability was not fully displaced.

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Issues: Whether the appellants were entitled to club the flexibility value available under multiple REP and additional licences for import of a ship for breaking, and whether the confiscation, redemption fine and personal penalty were justified.

Analysis: The import policy provisions relating to flexibility and clubbing were read strictly, and clubbing was prima facie treated as specifically provided only in the provision dealing with non-OGL capital goods. At the same time, the appellants had approached the licensing authority in advance, disclosed the proposed import of a ship for breaking, and obtained licences on transfer basis without any categorical objection. The later policy amendment and the subsequent circulars showed that the Government had permitted such imports by utilising the flexibility available under valid REP licences. Although the amendment was not treated as retrospective, the licences and the policy related to the same 1988-91 regime, and no mala fides could be attributed to the appellants.

Conclusion: The appellants were not denied the benefit of the amended policy for the purpose of adjudication, and the heavy redemption fine and personal penalty were not warranted. The confiscation issue was not fully displaced, but the monetary penalties were set aside.

Final Conclusion: The appeal succeeded in part, with the redemption fine and personal penalty remitted in light of the later policy position and the appellants' bona fide conduct.

Ratio Decidendi: Where a later policy amendment and administrative clarification permit the disputed import under the same licensing regime, and the importer acted bona fide after seeking prior clarification, heavy redemption fine and personal penalty are not justified even if confiscability is technically attracted.

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