Invalid port restriction on Open General Licence imports cannot support confiscation or penalties

Import restrictions confining pre-mutilated synthetic rags under Open General Licence to specified ICD ports were treated as beyond the authority of the import control framework and without jurisdiction. The restriction was regarded as arbitrary and discriminatory, and the same reasoning applied to Open General Licence imports generally. As the port limitation lacked valid legal basis, confiscation based on breach of that restriction could not stand, and associated penalties were also unsustainable. The appeals therefore succeeded in favour of the importers.

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Issues: Whether the import restriction confining pre-mutilated synthetic rags imported under Open General Licence to Bombay and Delhi ICD ports was valid, and whether the resulting confiscation and penalties could be sustained.

Analysis: The restriction in the Public Notice and ITC Order had already been held by the Calcutta High Court to be beyond the authority of the Import and Export (Control) Act, 1947 and without jurisdiction. The same view had been taken by other High Courts, which treated the port restriction as arbitrary and discriminatory. The reasoning applied to imports under Open General Licence as well, and there was no valid basis to confine such imports to the specified ports only.

Conclusion: The restriction was invalid and the confiscation and penalties were not sustainable, so the appeals succeeded in favour of the importers.

Ratio Decidendi: A port restriction imposed without jurisdiction and contrary to the governing import control framework cannot sustain confiscation or penalty for imports otherwise permissible under Open General Licence.

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