Valid import licence without item-wise limits bars confiscation based on the perceived spirit of the import policy.

A valid and unchallenged emergency spares licence, with no item-wise value or quantity restriction, protected the import from confiscation under Section 111(d) of the Customs Act. Customs authorities could not deny clearance merely because the importer had used the licence value for one specified item or because the import was said to offend the spirit of the policy. The policy provision relied on by the revenue did not require item-wise allocation of demand in the manner asserted, and in the absence of any reservation in the licence, the authorities were bound by its terms. A belated objection that the appellants were only L.A. holders was not entertained.

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Issues: Whether goods imported under a valid emergency spares licence could be confiscated under Section 111(d) of the Customs Act on the ground that the importer utilised the licence value for one specified item and allegedly acted contrary to the spirit of the import policy.

Analysis: The licence was found to be valid and unchallenged, and it did not impose any value or quantity restriction item-wise. The policy provision relied upon by the revenue did not require allocation of demand item-wise in the manner suggested. In the absence of any reservation in the licence, the customs authorities were bound to act according to the licence conditions. The objection that the appellants were only L.A. holders was not entertained because it had not been raised at the earlier stage.

Conclusion: Confiscation under Section 111(d) was not legally sustainable, and the import could not be denied merely on the basis of the authorities' view of the spirit of the policy.

Final Conclusion: The appeal succeeded and the orders of the lower authorities were set aside, with consequential relief granted.

Ratio Decidendi: Where an import licence is valid and unqualified on quantity or value for individual items, customs authorities cannot refuse clearance or confiscate the goods by invoking only the perceived spirit of the policy.

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