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1992 (5) TMI 23 - SC - CustomsWhether the export of the subject goods is barred expressly or by necessary implication by the provisions of the Customs Act or any other law in force? Held that - The interpretation of the O.G.L. that has commended itself to us (viz. that the import of the goods is permitted only for use in India) was also the one which the CCIE had formed and this opinion he had formulated in his two letters dated 10-10-1988 and 27-1-1989. As we have already pointed out the CCIE s opinion on the Import and Export Control Order is final and binding. In view of this when the CCIE came to know that the appellant was seeking to export the goods he could have intervened and issued directions under clause 10C either permitting the export of the goods to the U.S.S.R. or directing them to be sold to needy hospitals or other parties in India. He could have effectively stopped the export of the goods. This shows that the export of the goods is not free or unrestricted as made out by the learned counsel for the appellant. We uphold the order of the Tribunal and dismiss the appeal
Issues Involved:
1. Legality of re-exporting imported goods under Open General Licence (O.G.L.). 2. Interpretation of "home consumption" in the context of imported goods. 3. Applicability of Customs Act provisions to the re-export of imported goods. 4. Interpretation of Import and Export Policy, 1988-91, regarding life-saving equipment. 5. Validity of the penalty and confiscation under Sections 113(d) and 114 of the Customs Act. Detailed Analysis: 1. Legality of Re-exporting Imported Goods under Open General Licence (O.G.L.): The appellant, a recognized trading house, imported haemodialysers from West Germany and re-exported them to Russia. The Customs authorities detained the goods, arguing that re-export of goods imported under O.G.L. was not permissible without specific approval from the Import-Export Control authorities. The appellant argued that the goods were not included in Schedule I or III of the Exports Control Order, thus their export was not prohibited. The court held that although there was no express prohibition, the re-export of items listed in List 2 of Appendix 6 (life-saving equipment) was implicitly prohibited by the language and scheme of the O.G.L. The court emphasized that the goods were intended for use in India, not for export. 2. Interpretation of "Home Consumption" in the Context of Imported Goods: The appellant imported the goods under a bill of entry for home consumption and argued that this did not preclude their export. The Revenue contended that clearance for home consumption implied that the goods should be used or sold within India and not be exported. The court disagreed with the Revenue, stating that the term "home consumption" is used in contrast to "warehousing" and does not necessarily mean that the goods cannot be exported. The court pointed out that the Customs Act does not provide a form of Bill of Entry for re-export and that warehousing is an option, not a compulsion. 3. Applicability of Customs Act Provisions to the Re-export of Imported Goods: The Revenue argued that the goods were cleared for home consumption, and thus, could not be exported. The court examined Sections 51, 54, 69, and 74 of the Customs Act and concluded that these provisions do not prohibit the export of imported goods. The court noted that Section 74, which provides for drawback on re-exported goods, would be redundant if re-export were not allowed. 4. Interpretation of Import and Export Policy, 1988-91, Regarding Life-saving Equipment: The appellant argued that Appendix 6 of the Import-Export Policy did not explicitly restrict the export of life-saving equipment. The court, however, found that the policy implicitly restricted the re-export of such equipment. The court emphasized that the goods were allowed under O.G.L. to facilitate their availability in India, not for profit-making through export. 5. Validity of the Penalty and Confiscation under Sections 113(d) and 114 of the Customs Act: The court upheld the penalty and confiscation, stating that the goods were "prohibited" within the meaning of Section 2(33) of the Customs Act. The court found that the appellant had contravened the conditions of the O.G.L. and the Customs notification, rendering the goods liable for confiscation under Section 113(d) and the appellant liable for a penalty under Section 114. Additional Considerations: - The court noted that the exemption from customs duty for life-saving equipment was intended to benefit the country, not for re-export. - The court dismissed the relevance of foreign exchange loss arguments, focusing on the permissibility of export under the Customs Act. - The court acknowledged that the appellant had obtained an RBI no-objection certificate for export on humanitarian grounds but found it irrelevant to the legal issue of re-export under the Import regulations. - The court clarified that the Export Control Order's clause 15(g) and Import Control Order's clause 11(1)(d) did not support the appellant's case for re-export. Conclusion: The Supreme Court upheld the Tribunal's order, confirming the confiscation of the goods and the penalty imposed on the appellant. The court emphasized that the import of life-saving equipment under O.G.L. was intended for use in India and not for re-export. The appeal was dismissed, and the parties were directed to bear their own costs.
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