1992 (10) TMI 86 - HC - Customs

Issues Involved:
1. Validity of the demand for import duty despite the Special Imprest Licence.
2. Entitlement to duty exemption under Notification No. 210 of 1982.
3. Interpretation of the Import Export Policy and relevant notifications.
4. Distinction between the roles of licensing authorities and customs authorities.
5. Application of legal precedents and principles of statutory interpretation.

Issue-wise Detailed Analysis:

1. Validity of the demand for import duty despite the Special Imprest Licence:
The petitioners challenged the respondents' action of endorsing the Bill of Entry, which demanded import duty on goods imported under a Special Imprest Licence issued under the Duty Exemption Scheme. The petitioners argued that they were entitled to duty-free imports as they had fulfilled their export obligations by supplying goods to State Aided Projects, which were treated as "deemed exports."

2. Entitlement to duty exemption under Notification No. 210 of 1982:
The petitioners relied on Notification No. 210 of 1982, which exempted raw materials and components required for manufacturing goods supplied to IDA or IBRD-aided projects from customs duty. They argued that their imports made on 12-03-1987 should be exempted from customs duty as they were made under the Special Imprest Licence after fulfilling their export obligations.

3. Interpretation of the Import Export Policy and relevant notifications:
The court examined the Import Export Policy AM 1982-83 and AM 1985-88, which provided for import replenishment for registered exporters. The court noted that the policy treated supplies to IBRD/IDA aided projects as "deemed exports," eligible for duty exemption. The petitioners' exports between November 1985 and March 1986 were deemed exports, and the Special Imprest Licence issued on September 20, 1985, entitled them to duty-free imports.

4. Distinction between the roles of licensing authorities and customs authorities:
The petitioners argued that the customs authorities could not interpret the licensing policy, as this was the domain of the licensing authorities. They cited the decision in Lokesh Chemical Works v. M.S. Mehta, which emphasized the separation of duties between licensing and customs authorities. The court agreed that the customs authorities should not override the licensing authorities' decisions.

5. Application of legal precedents and principles of statutory interpretation:
The court referred to several legal precedents, including Hansraj Gordhandas v. H.H. Dave, Commissioner of Income Tax v. J.K. Hosiery Factory, and Union of India v. Kanunga Industries. These cases established that in case of doubt, the benefit of statutory provisions should go to the assessee. The court found that the amending Notification No. 235 of 1987 clarified the position and should be applied to the petitioners' case.

Conclusion:
The court concluded that the petitioners were entitled to duty-free imports under the Special Imprest Licence issued under the Duty Exemption Scheme. The impugned endorsement on the Bill of Entry was cancelled, and the respondents were directed to issue a detention certificate for the period from the filing of the Bill of Entry to the clearance of the goods. The Bombay Port Trust was directed to honor the detention certificate. The rule was made absolute, and the petitioners' claims were upheld without any order as to costs.

← Previous Next →