OGL import conditions and contract registration requirements upheld, while an excessive redemption fine was reduced for proportionality.

General OGL conditions in Appendix 6 were treated as applicable to imports during the relevant policy period, and compliance with paragraph 7(1) of the licence did not displace the separate pre-import contract-registration requirement in paragraph 31. Non-compliance with that requirement therefore justified confiscation. On penalty, the redemption fine was found excessive because the goods were imported for research and development, the importers were actual users, and no profit motive or revenue loss was shown; a fine equal to 100% of CIF value was held disproportionate and reduced to Rs. 1,500.

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Issues: (i) Whether the general conditions in Appendix 6, including the requirement of contract registration under paragraph 31, applied to the import made under the specific OGL licence; (ii) whether the redemption fine of Rs. 5,600 was excessive and required reduction.

Issue (i): Whether the general conditions in Appendix 6, including the requirement of contract registration under paragraph 31, applied to the import made under the specific OGL licence.

Analysis: The general conditions in Appendix 6 were held to govern imports under OGL during the relevant policy period and were not confined only to a specific OGL licence. Compliance with paragraph 7(1) of the licence was treated as a post-import condition and did not amount to compliance with the separate pre-import requirement of paragraph 31. The importers therefore could not avoid the contract-registration obligation on the basis of the specific licence conditions.

Conclusion: The requirement in paragraph 31 applied, and confiscation for non-compliance was sustained.

Issue (ii): Whether the redemption fine of Rs. 5,600 was excessive and required reduction.

Analysis: The imported goods were for research and development purposes, the importers were actual users, and no profit motive or revenue loss was shown. In that background, a redemption fine quantified at 100% of the CIF value was considered disproportionate.

Conclusion: The redemption fine was reduced to Rs. 1,500.

Final Conclusion: The order of confiscation was maintained, but the monetary burden was substantially reduced by lowering the redemption fine, resulting in only partial relief to the importers.

Ratio Decidendi: General OGL conditions applicable to imports under the policy period remain enforceable notwithstanding compliance with separate specific licence conditions, and redemption fine must be proportionate to the nature of the contravention and surrounding circumstances.

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