Strict transitional import exemption turns on actual loading date, valid letter of credit, and proven compliance with import conditions.

A strict transitional import exception for Open General Licence clearance of cassia required proof that sea cargo had actually commenced transit within the permitted period; the relevant shipment date was the date the goods were loaded on board, not the bill of lading date. The exception also depended on a confirmed order and an operative irrevocable letter of credit, both of which had to be satisfactorily established. Under customs valuation rules, unrebutted under-valuation could support confiscation. Redemption fine may be retained where not excessive, while penalty can be moderated on the overall facts.

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Issues: (i) Whether the imported cassia qualified for clearance under Open General Licence under the transitional exception in the public notice, including the question whether the relevant date of shipment was the bill of lading date or the date on which the goods were actually loaded on board and commenced transit, and whether the imports were covered by a confirmed order against an irrevocable letter of credit; (ii) Whether the confiscation for under-valuation under the Customs Act was sustainable; and (iii) Whether the redemption fine and penalty required interference.

Issue (i): Whether the imported cassia qualified for clearance under Open General Licence under the transitional exception in the public notice, including the question whether the relevant date of shipment was the bill of lading date or the date on which the goods were actually loaded on board and commenced transit, and whether the imports were covered by a confirmed order against an irrevocable letter of credit.

Analysis: The transitional permission was an exception to a newly imposed import restriction and therefore had to be construed strictly. For sea cargo, the relevant shipment date was the date when the goods were actually placed on board and transit commenced, not merely the date shown on the bill of lading evidencing receipt by the carrier's agent. On the record, the goods were loaded on board only on 7-12-1993, beyond the permissible period. The letter of credit was also not shown to be operative in the required form for the later shipment date, and the confirmed-order requirement was not satisfactorily established.

Conclusion: The goods were not entitled to Open General Licence clearance and were correctly held liable to confiscation under the import restriction regime.

Issue (ii): Whether the confiscation for under-valuation under the Customs Act was sustainable.

Analysis: The appellants did not dispute the revised assessable value and accepted the loading of value for assessment purposes. In the circumstances, the finding of under-valuation stood unrebutted and attracted the statutory consequence of confiscation.

Conclusion: The confiscation under the valuation provision was sustained.

Issue (iii): Whether the redemption fine and penalty required interference.

Analysis: The redemption fine was found not excessive on the facts. However, having regard to the overall circumstances, the penalty was considered capable of reduction.

Conclusion: The redemption fine was maintained and the penalty was reduced to Rs. 1,00,000.

Final Conclusion: The appeals failed on the principal confiscation issues, with only the penalty being moderated, and the order was otherwise upheld.

Ratio Decidendi: For a time-bound import exemption tied to shipment, the relevant date for sea carriage is the actual commencement of transit by loading on board, and not the mere date endorsed on the bill of lading; an unproven or lapsed letter of credit cannot satisfy a strict transitional import exception.

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