Good luck to you --

... if, in the end, it is not a controlled substance, and it is not on the Customs list as a prohibited import, you SHOULD be OK - eventually.!! Then u try for compensation.!!!

But I can only say,...u have to stick it out. keep on fighting.
Sounds like a bad farce... but I know they happen for real everyday. Such is the hysteria, innocents are made into criminals.
( Disclaimer: I know nothing of your matter other than  your post)

The Fed Police are pretty useless when it comes to Law. That is clear from many many failures of procedural adherence to Australian law. They seem to think they are ..??? above it??

I don't know who they rely on for advice, but it's obviously someone who tells them what they want to hear.
Public Prosecutors, of the Federal or State variety, are likely to make foolish political decisions.
It even gets on the News!!

If you are being unreasonably treated vis a vis reporting to police,  you should apply to be able to return to your home, and arrange to report at your closest Police station, instead of the current one. This should not be impossible, if the current order has the effect of essential homelessness.  If your 'home' is interstate , not so bad, - or OS?, ie not an oz citizen,  you're facing a much longer process.

Of course, if you are domiciled with Family , in Mel, your argument is harder to justify.
If you are required to report daily, then you would seem to  have significant matters to answer.

However, its always a point that justice delayed is justice denied.

I can only offer you advice...  because no one can help you but yourself.

so I will quote an OZ band
' ..better get a lawyer son,... better get a reeeeal good one..'

That is some serious problem which is carried out by you. Convincing the feds is one of the toughest jobs around. Patience is the key here.

Are you Nigerian?