Import licence coverage and show cause notice limits shape confiscation, with remand ordered after unauthorized reclassification.

An import licence dispute concerned whether populated printed circuit boards were covered by the licence and whether customs could disregard endorsements made by the licensing authority and DGTD. The majority treated the specific list attached to the licence and the relevant import-policy endorsement as covering the goods, and held that the adjudicating authority had gone beyond the show cause notice by reclassifying the goods as capital goods on a basis not pleaded by the department. The confiscation order was therefore set aside and the matter remanded for de novo adjudication. A dissenting view considered the extended validity endorsement limited to capital goods and supported confiscation and redemption fine.

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Issues: Whether the import licence covered the populated printed circuit boards, whether the customs authority could go behind the endorsement made by the licensing authority and DGTD, and whether the confiscation order required to be set aside and the matter remanded for fresh adjudication.

Analysis: The goods were specifically shown in the list attached to the licence, and the endorsement was made under the relevant import policy. The majority held that the later extension of validity for capital goods did not erase the earlier specific endorsement, but the adjudicating authority had not properly considered the scope of the licence, the DGTD recommendation, the departmental practice in similar cases, or the effect of the show cause notice. The order was found unsustainable because the authority travelled beyond the allegations in the notice and treated the goods as capital goods on a basis not put forward by the department.

Conclusion: The impugned confiscation order was set aside and the matter was remanded to the adjudicating authority for de novo consideration, in favour of the assessee.

Dissenting Opinion: One member held that the extended validity endorsement was confined to capital goods, that the licence did not cover the goods during the extended period, and that the confiscation order and redemption fine should be sustained.

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