Import licence terms control raw material imports, while technical endorsement lapses may justify reduction of redemption fine.

Customs authorities must confine import permissions to the express terms of the import licence; a raw material cannot be treated as covered merely because the end-product appears in the industrial registration certificate or import policy if it is not endorsed in the licence itself. The stated principle is that the licence controls the scope of permissible imports, so unendorsed coverage will not be read into it. At the same time, where the omission is technical and the end-product was reflected in the registration record, leniency may be justified in fixing redemption fine. The confiscation remained intact, but the fine could be reduced to reflect the technical nature of the lapse.

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Issues: (i) Whether styrene monomer could be imported as raw material when the end-product pigment binder was not endorsed in the import licence, though it was mentioned in the industrial registration certificate and covered by the import policy. (ii) Whether the confiscation order should be interfered with on merits and, if not, whether the redemption fine deserved reduction for a technical lapse.

Issue (i): Whether styrene monomer could be imported as raw material when the end-product pigment binder was not endorsed in the import licence, though it was mentioned in the industrial registration certificate and covered by the import policy.

Analysis: The policy permitted import of goods required for manufacture of the final product specified in the industrial licence or registration certificate, but only within the bounds of the licence actually issued. Even though the registration certificate reflected the manufacturing activity and the omission appeared to be on the part of the licensing authority, the customs authorities could not go beyond the contents of the import licence or read into it what was not endorsed therein.

Conclusion: The import of monomer was not covered by the import licence as issued, so the confiscation was upheld.

Issue (ii): Whether the confiscation order should be interfered with on merits and, if not, whether the redemption fine deserved reduction for a technical lapse.

Analysis: The omission to endorse pigment binder in the licence was treated as a technical infringement in the circumstances, because the activity had been reflected in the registration certificate and could have been corrected at the licensing stage. That warranted leniency in the quantum of redemption fine.

Conclusion: The confiscation was maintained, but the redemption fines were substantially reduced with consequential relief.

Final Conclusion: The appeal succeeded only to the extent of reduction of redemption fine, while the confiscation order on the import violation remained undisturbed.

Ratio Decidendi: Customs authorities must confine themselves to the express terms of the import licence and cannot allow import of raw materials for an unendorsed end-product, though leniency may be granted in the quantum of penalty or fine where the violation is merely technical.

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