Full Judgment Text
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PETITIONER:
COLLECTOR OF CUSTOMS. CALCUTTA
Vs.
RESPONDENT:
M. SHASHIKANT AND CO.
DATE OF JUDGMENT08/01/1992
BENCH:
KULDIP SINGH (J)
BENCH:
KULDIP SINGH (J)
RANGNATHAN, S.
KASLIWAL, N.M. (J)
CITATION:
1992 AIR 696 1992 SCR (1) 7
1992 SCC Supl. (2) 306 JT 1992 (1) 129
1992 SCALE (1)1
ACT:
Import-Export Policy 1978-79. Export House-Grant of
additional Import Licence to import goods permitted under
the Import policy or those permitted at the time of import-
Import of canalised item, Palm acid oil-Order confiscating
the goods-Validity of-Held import was unauthorised because
the goods imported were banned under the import policy.
HEADNOTE:
The respondent-company applied for the grant of Export
House Certificate under the Import Policy 1978-79 which was
denied on the ground that it had not diversified its
exports. The writ petition filed by the respondent in the
Bombay High Court was allowed against which the Union of
India filed a Special Leave petition in this Court. By its
order dated April 18, 1985 (Union of India v Rajniknat
Bros.) this Court dismissed the petition and directed the
Union of India to issue the necessary Export House
Certificate to the respondent. The said order stated that
"save and except items which are specifically banned under
the prevalent import policy at the time of import; the
respondent shall be entitled to import all other items
whether canalised or otherwise in accordance with the
relevant rules."
By its judgment dated 5th March, 1986 in Raj Prakash
Chemicals v. Union of India. [1986] 1 S.C.R. 448 this Court
clarified its order dated 18th April, 1985 stating that only
such items could be imported under the additional licence as
were permitted under the Import Policy at the time of
import. However, those additional licence holders who had
opened and established irrevocable letters of Credit before
18th October, 1985 should be permitted to clear the imported
goods notwithstanding the clarification of courts, order
dated 18th April, 1985. This judgment was approved by this
Court in its subsequent decisions.
Pursuant to this court’s directions dated 18th April,
1985 the respondent was granted Additional Licence for the
import of Palm acid oil-a canalised item under the Import
Policy 1985-88. On 5th May 1986 it entered into a contract
with a Singapore firm and imported 4000 M.T. of Palm acid
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oil, The Collector of Customs confiscated the goods on the
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ground that import was unauthorised because it was a
canalised item but gave the respondent an option to get the
goods released on payment of a fine of Rs. 58,00,000
The respondent preferred an appeal before the Customs
Excise and Gold (Control) Appellate Tribunal which allowed
the appeal and set aside the Collector’s order on the
grounds that : (i) the Additional Licence Holders were
permitted to import canalised items; (ii) the import by
respondent was bona fide; and (iii) the respondent’s case
was covered by a judgment of this court in B. Vijay Kumar v.
Collector of Customs, Civil Appeal Nos. 4445 & 4446 of 1988
decided on December 16, 1988.
Against the judgment of the Tribunal, Union of India
filed an appeal before this Court.
Allowing th appeal, this Court,
HELD : 1. This court in its order dated April 18, 1985
categorically stated that "save and except items which are
specifically banned under the prevalent import policy at the
time of import, the respondents shall be entitled to import
all other items whether canalised or otherwise in accordance
with the relevant rules." There is no ambiguity in the
order which makes it clear that the additional licence
holders would not be entitled to import the items which are
specifically banned under the import policy 1985-88. No
other interpretation is possible. The item imported by the
respondent was a banned item under the import policy 1985-
88. The import was, thus, on the face of it unauthorised.
[11D-E,12-B]
2. In the face of clear and unambiguous judgments of
this Court it was not open for the departmental authorities
to entertain a contrary opinion. The Departmental officers
were not justified in taking the view that the order
permitted the import of canalised items. Therefore, the
Tribunal fell into grave error in accepting the plea of bona
fide raised by the respondent and setting aside the order of
the Collector. Accordingly the judgment of the Tribunal is
set aside and the order of the Collector of Customs is
restored. [14-B 11E, 14-A, G]
Union of India v. M/s Godrej Soaps Ltd., [1986] 3
S.C.R. 771; Raj Prakash Chemicals v. Union of India, [1986]
1 S.C.R. 448; Indo-Afgan Chambers of Commerce & Anr. v.
Union of India & Ors. etc., [1986] 3 S.C.R. 88; relied on.
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B. Vijay Kumar v. Collector of Customs., Civil Appeals
Nos. 4445 & 4446 of 1988 decided on 16.12.1988, held no
longer good law.
3. The respondent entered into contract with the
foreign exporter on May 5, 1986 much after OCTOBER 18, 1985
and as such is also not entitled to relief under the
judgment dated 5th march, 1986. [12-F]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil appeal No. 5148
(NM) of 1990.
From the Order dated 26.3.1990 of the Customs, Excise
and Gold (Control), Appellate Tribunal, New Delhi in Appeal
No. 3773/87 CA. Order NO. 773/90-A.
A. Subba Rao and P. Parmeshwaran for the Appellant.
Anil B. Divan C.S. Lodha, Sumeet Kachwaha, R.P.
Wadhwani and Abbas Naqvi for the Respondent.
The Judgment of the Court was delivered by
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KULDIP SINGH, J. The respondent, Shashikant & Company,
had applied for the grant of Export House Certificate under
the Import Policy 1978-79. The Certificate was denied on
the ground that the respondent had not diversified its
exports, Against the said order the writ petition filed by
the respondent was allowed by the Bombay High Court and the
respondent was held entitled to the Export House
Certificate. Special leave petition filed by the Union of
India against the said order was heard along with a bunch of
similar petitions under the title Union of India v.
Rajnikant Brothers. The petitions were dismissed on April
18, 1985 by an order in the following terms :
"We have heard counsel for the parties and have
gone through the judgement of the High Courts
of Bombay and Delhi. We are unable to find, in
the facts and circumstances of the case, any
requirement of diversification of exports as a
condition for the grant of Export House
Certificates in the Import Policy for the year
1978-79. While confirming the High Court’s
Judgment quashing the order impugned in the Writ
Petition in the High Court we direct the
appellants to issue the necessary Export House
Certificates for the year 1978-79. The Export
House Certificates shall be granted within 3
months from this date. Save
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and except items which are specifically banned
under the prevalent import policy at the time of
import, the respondents shall be entitled to
import all other items whether canalised or
otherwise in accordance with the relevant rules.
The appeals are disposed of accordingly with no
order as to costs.
Pursuant to the above quoted directions of this Court
the respondent was granted additional licence dated
September 4, 1985 for the import of Palm acid oil which was
a canalised item under the Import Policy 1985-88. The
respondent entered into a contract dated May 5, 1986 with a
Singapore firm for supply of 4000 M.T. of Palm acid oil.
The invoice in respect of the said contract was dated
september 1, 1986 and the respondent filed the Bill of Entry
on September 11, 1986.
The Collector Customs Calcutta by his order dated,
October 31, 1986, confiscated the goods on the ground that
the import of Palm Acid Oil-a canalised item-was
unauthorised. The respondent was, however, given the option
to get the goods released on payment of a fine of Rs.
58,00,000/- in lieu of confiscation.
The appeal filed by the respondent before the Customs,
Excise & Gold (Control) Appellate Tribunal (hereinafter
called ‘the Tribunal’) was allowed and the order of
Collector confiscating the goods was set aside. The
Tribunal directed the refund of the redemption fee to the
respondent.
The tribunal decided in favour of the respondent
broadly on three grounds, It came to the conclusion that
till September 12,1986, when this Court delivered judgment
in Union of India v. M/s Godrej Soaps Ltd. [1986] 3 SCR 771,
the customs authorities were interpreting the order of this
Court dated April 18, 1985 (Rajnikant Case) to mean that the
additional licence holders were permitted to import even the
canalised items. Secondly the import by the respondent was
bona fide because of the following factors :
(a) On April 3, 1986 in a meeting attended by Mr.
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Swaminathan, Member, Central Board of Excise and
Customs, Mr R.M. Singh, Principal collector of
Customs and the representatives of the Federation
of India Export Organisation, it was decided that
the import of items, which were under Open General
Licence during 1978-79 and were categorised as
canalised under the Import Policy 1985-88, would be
allowed to the additional licence holders.
(b) The Government of India in its letter dated
April 23, 1986 stated
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that the Chief Controller Imports/exports, in
consultation with the Additional Solicitor General,
has permitted the additional licence holders to
import canalised items against their licences.
(c) The Collector in his letter dated May 14, 1986
observed that clearance of canalised items against
the additional licences was being unconditionally
allowed.
The Tribunal, therefore, found that the respondent,
having acted on the representation of the Departmental
authorities, was justified in importing the canalised item.
Thirdly the Tribunal relied on the judgment of this Court in
B. Vijay Kumar v. Collector of Customs, Civil Appeals Nos.
4445 & 4446 of 1988 decided on December 16, 1988 and granted
relief to the respondent in similar terms.
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that the Chief Controller Imports/exports, in consultation
with the Additional Solicitor, has permitted the additional
licence holders to import canalised items against their
licences.
(c) The Collector in his letter dated May 14, 1986
observed that clearance of canalised items against the
additional licences was being unconditionally allowed.
The Tribunal, therefore, found that the respondent,
having acted on the representation of the Departmental
authorities, was justified in importing the canalised item.
Thirdly the Tribunal relied on the judgment of this Court in
B. Vijay Kumar v. Collector of Customs, Civil a Appeals Nos.
4445 & 4446 of 1988 decided on December 16, 1988 and granted
relief to the respondent in similar terms.
This appeal before us if by the Union of India through
Collector Customs Calcutta against the judgment of the
Tribunal.
We have heard Mr. A. Subba Rao, learned counsel for the
appellant and Mr. Anil Divan, Senior Advocate on behalf of
the respondent. This Court in its order dated April 18,
1985 (Rajnikant case) categorically stated that "save and
except items which are specifically banned under the
prevalent import policy at the time of import, the
respondents shall be entitled to import all other items
whether canalised or otherwise in accordance with the
relevant rules." There is no ambiguity in the order which
makes it clear that the additional licence holders would not
be entitled to import the items which are specifically
banned under the import policy 1985-88. No other
interpretation is possible. Some of the Departmental
officers were not justified in taking the view that the
order permitted the import of canalised items. In any case
this Court in Raj Prakash Chemicals v. Union of India,
[1986] 1 SCR 448 decided on March 5, 1986 authoritatively
interpreted the order dated April 18, 1985 (Rajnikant case)
as under :
"the Additional Licences to be issued to diamond
exporters entitled them to items import permissible
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to Export House under such Licence under
the Import Policy 1978-79 excluding those
items which fell within Appendices 3 and
4 of the Import Policy 1978-79 and also
excluding items which fell in Appendix 3 and
Appendix 2 Part A of the Import Policy
1984- 85. Upon what we have said earlier,
that is the meaning which we think must also be
given to the terms of the order dated April 18,
1985 of this Court. Where the Import Policy
prevailing at the time of import
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is the Import Policy 1985-88, the items excluded
are those enumerated in the corresponding Appendix
3 and Appendix 2 Part A of that Import Policy.
That conclusion follows irresistibly on the
analysis attempted by us and in the context in
which the order was made."
This Court thus clarified that only such items could be
imported under the additional licence as were permitted
under the import policy 1978-79 and also at the time of
import, which in the present case was the import policy
1985-88. Admittedly, the item imported by the respondent
was a banned item under the import policy 1985-88. The
import was, thus, on the face of it unauthorised. This
Court in Raj Prakash’s case, however, granted relief in the
following terms, to those importers who had opened
irrevocable Letters of Credit before october 18, 1985 :
"We think appropriate that those diamond exporters
who were granted additional Licences under the
Import Policy 1978-79 and had opened and
established irrevocable letters of Credit before
October 18, 1985 should be permitted,
notwithstanding the construction we have placed on
the order dated April 18, 1985 of this Court, to
clear the goods imported, or to be imported, by
them pursuant to such irrevocable Letters of
Credit. In other words, all imports effected
perusant to such Letters of Credit should be
deemed to have been legally and properly made, and
should entail no adverse consequences whatsoever
.........At the same time we make it clear that
diamond exporters who pursuant to the issue of
Additional Licences under the Import Policy 1978-
79 have opened and established irrevocable Letters
of Credit on or after October 18, 1985 will not be
entitled to the benefit of this order.
The respondent in this case entered into contract with
the foreign exporter on May 5, 1986 much after October 18,
1985 and as such is not entitled to relief under the above
judgment.
The order dated April 18, 1985 (Rajnikant case) and
also the judgment dated March 3, 1986 in Raj Prakash’s case
were considered by this Court in Indo-Afghan Chambers of
Commerce & Anr. v. Union of India & Ors. etc. [1986] 3 SCR
88. Pathak, J. (as he then was) speaking for the Court
summed up the legal position as under :
"only such items could be imported by diamond
exporters under
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the Additional granted to them as could have been
imported under the Import Policy 1978-79, the
period during which the diamond exporters had
applied for Export House Certificates and had been
wrongfully refused, and were also importable under
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the Import Policy prevailing at the time of
import, which in the present case is the Import
Policy 1985-88. These were the items which had
not been "specifically banned" under the prevalent
Import Policy. The items had to pass through two
tests. They should have been importable under the
Import Policy 1978-79. They should also have been
importable under the Import Policy 1985-88 in
terms of the order dated April 18,
1985..........In our opinion the respondents
diamond exporters are not entitled to import dry
fruits under the Import Policy 1985-88 under the
Additional Licences possessed by them. They are
also not entitled to the benefit extended by the
judgment of this Court dated March 5, 1986 to
those diamond exporters who had imported items
under irrevocable Letters of Credit opened and
established before October 18, 1985. It appears
from the record before us that the respondents
diamond exporters opened and established the
irrevocable Letters of Credit after that date."
In Union of India v. M/S Godrej Soaps Pvt. Ltd. [1986]
3 SCR 771 decided on September 12, 1986 this Court finally
considered the judgments in Raj Prakash and Afghan Chambers
cases and approved the ratio therein in the following words:
"In respect of Palm Kernel Fatty Acid which is a
canalised item listed as item 9(v) in Appendix V
Part B of the Import Policy 1985-88, there is no
provision in that policy which permits the import
of such item by an Export House holding an
Additional licence. Therefore, the claim of the
diamond exporters, or, as in this case a purchaser
from the diamond exporter, must fail because it is
not open to import by the diamond exporter, under
any provision of the Import Policy 1985-
88......In this case no injustice would be done
by this order. The goods were purchased by the
present petitioners only on 27th June, 1986 after
they were aware of the judgment of this Court in
Raj Prakash’s case (supra) as well as Indo-Afghan
Chambers of Commerce’s case (supra). No question
of any restitution of rights arises."
There was no ambiguity in the order dated April 18,
1985 (Rajnikant’s case). Assuming it needed clarification,
the same was done by this Court on
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March 5, 1986 in Raj Prakash’s case. The respondent entered
into contract for the import of the item on May 5, 1986 much
after the judgment in Raj Prakash case. We are of the view
that the Tribunal fell into grave error in accepting the
plea of bona fide raised by the respondent and setting aside
the order of Collector. The opinions expressed by the
officers in interdepartmental communications is of no
consequence. In the face of clear and unambiguous judgments
of this Court it was not open for the department authorities
to entertain a contrary opinion
It is no doubt correct that the facts in B Vijay
Kumar’s case relied upon by the Tribunal are somewhat
similar to the facts in this case. This Court decided Vijay
Kumar’s case on the special facts and circumstances of the
said case. This Court while deciding Vijay Kumar’s case
observed as under :
"We do not consider it necessary to deal with
these submissions in detail as we are of the
opinion that in view of the special facts and
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circumstances of the case specially having regard
to the findings of the Tribunal that the
appellants imported the canalised items of goods
bonafide under the additional import licence
granted to them in pursuance of the express
conditions contained in the orders of this Court,
which finding has not been challenged before us
rather the Additional Solicitor General has fairly
conceded the correctness of the findings of the
Tribunal relating to the bonafide of the
appellants in importing the disputed goods, we are
of the view that the Collector and the Tribunal
both were not justified in confiscating the goods
or in imposing redemption fine..........We would
like to emphasise that since we have decided the
matter in view of the special facts and
circumstances available in these cases this order
will not be treated as a precedent."
Even otherwise, in view of the judgments of this Court
discussed above, we hold that B Vijay Kumar’s case does not
lay-down correct law.
We, therefore, allow the appeal with costs, set aside
the judgment of the tribunal and restore the order of the
Collector Customs Calcutta confiscating the goods and giving
an option to the respondent to get the goods released on
payment of fine of Rs. 58,00,000 (fifty eight lacs). We
quantify the costs as Rs. 11,000
T.N.A. Appeal Allowed.
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