Import licence requirement for re-export goods upheld; confiscation sustained, but penalty relief granted on mitigating circumstances.

Import licence requirements are not waived merely because goods are brought in for processing and re-export; absent any legal basis for exemption, confiscation under the Customs Act was upheld. However, the intention to use the goods solely for embroidery and export of the finished products was treated as a mitigating circumstance for fiscal consequences, so the penalty was set aside and the redemption fine was reduced. The confiscation remained intact, but relief was granted only on the quantum of penalty and fine.

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Issues: (i) Whether import of goods intended to be processed and re-exported dispensed with the requirement of an import licence and the resulting confiscation under clause (d) of Section 111 of the Customs Act, 1962 could be sustained; (ii) Whether the penalty and redemption fine required interference in view of the purpose of import and the surrounding circumstances.

Issue (i): Whether import of goods intended to be processed and re-exported dispensed with the requirement of an import licence and the resulting confiscation under clause (d) of Section 111 of the Customs Act, 1962 could be sustained.

Analysis: The goods were imported without producing the licence required for clearance. The asserted intention to embroider the fabrics and re-export the resultant products did not, by itself, exempt the import from the statutory licensing requirement. No legal provision was shown to support the claim that goods meant for re-export were outside the scope of import control.

Conclusion: The confiscation was sustained and the challenge on this issue failed.

Issue (ii): Whether the penalty and redemption fine required interference in view of the purpose of import and the surrounding circumstances.

Analysis: The material produced indicated that the import was made solely for processing and export of the finished goods. That circumstance warranted leniency in the quantum of fiscal consequences, even though it did not affect the legality of confiscation.

Conclusion: The penalty was set aside and the redemption fine was reduced.

Final Conclusion: The appeal succeeded only to the extent of relief from penalty and reduction of redemption fine, while confiscation of the goods remained intact.

Ratio Decidendi: An import licence requirement is not dispensed with merely because imported goods are intended for processing and re-export, though such intention may justify leniency in the quantum of penalty or fine.

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