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Issues: Misuse of license, applicability of Section 111(d) of the Customs Act, interpretation of license terms, authority of L.A. Holders, validity of import, legal basis for confiscation.
In this case, the appeal was filed against an Order-in-Appeal confirming the Order-in-Original passed by the Deputy Collector of Customs, Mumbai, regarding the misuse of an Emergency Spares License for importing ball bearings. The license allowed import of various items with a value limit of Rs. 1,00,000, but the appellant imported ball bearings worth Rs. 87,144 only. The Customs Authorities objected, stating that importing only one specific item did not align with the purpose of emergency spares. The Collector upheld the decision, citing a violation of policy spirit. The appellant argued that the license had no quantity or value restrictions per item, relying on a Bombay High Court precedent. The Customs Authorities contended that the import was against policy provisions requiring immediate replacement parts and that the L.A. Holders lacked specific instructions from the license holder for the import. The Tribunal found that the license did not impose quantity restrictions per item, and the Customs Authorities had to abide by the license conditions. Despite moral or equitable justifications, the authorities' actions were legally unsound. The Tribunal set aside the lower authority's decision, allowing the appeal and ordering consequential reliefs. The objection regarding the L.A. Holders' authority to import without explicit instructions was dismissed as it was not raised earlier in the proceedings. The validity of the import under the license was upheld, and the confiscation order under Section 111(d) of the Customs Act was overturned based on the license terms and absence of restrictions. The judgment emphasized adherence to license terms and the absence of specific restrictions in the license, leading to the decision in favor of the appellant.
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