Bona fide import under licensing clarification defeats confiscation and redemption fine where later administrative view changed

Imported nutmegs and mace were treated as consumer goods requiring a licence, but the record showed a contemporaneous clarification from the licensing machinery that they were freely importable under the relevant policy. Because the importers acted in good faith on that clarification and the prevailing trade understanding, a later administrative view treating the goods as restricted did not justify confiscation or a heavy redemption fine. The confiscatory consequence had to be assessed against the bona fide conduct of the importers and the surrounding administrative confusion. The confiscation and redemption fine were therefore set aside, with consequential relief.

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Issues: Whether confiscation of the imported nutmegs and mace and the redemption fine imposed thereon were sustainable when the import was made bona fide on the basis of the clarification issued by the licensing authority and the trade understanding then prevailing.

Analysis: The imported goods were treated as consumer goods requiring a licence, but the record showed that the regional licensing authority had clarified that they were freely importable under the relevant import policy and that the central licensing authority had recommended release of the consignments as a special case because the importers had acted in good faith on that clarification. The mere fact that the later administrative view treated the goods as restricted could not by itself justify confiscation and a heavy redemption fine where the import had been made under a bona fide understanding induced by the competent licensing machinery. In such circumstances, the confiscatory consequence and the fine had to be tested against the importer's bona fide conduct and the surrounding administrative confusion.

Conclusion: The confiscation and redemption fine were not sustainable and were set aside; the appeal succeeded with consequential relief.

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