1995 (4) TMI 63 - SC - Customs

Whether Cement including Clinker would cover white cement? Held that - The entry in question makes a clear reference to the connected policy of the Government in the Ministry of Industry in connection with the items canalised at Serial No. 8 of Appendix 5 Part B. This connected policy of the Government is reflected in the Imported Cement Control Order of 1978, the Cement Control Order, 1967 and the Press Note which do not cover within their ambit white cement. The appeals are allowed. The impugned judgment of the High Court is set aside.

Summary

Issues:
- Interpretation of Import and Export Policy for April 1984-March 1985 regarding the import of white cement under Open General Licence.
- Application of Imported Cement Control Order of 1978 and Cement Control Order of 1967 in determining the canalisation of white cement.
- Examination of the properties and commercial distinctions between white cement and ordinary portland cement.

Issue 1: Interpretation of Import Policy
The appellants imported white cement seeking clearance under Open General Licence but were denied clearance as white cement was considered a canalised item under Appendix 5 Part B Serial No. 8 of the Import and Export Policy for April 1984-March 1985. The High Court upheld this decision, stating that white cement could not be imported under Open General Licence as per the policy.

Issue 2: Application of Cement Control Orders
The Supreme Court analyzed the Imported Cement Control Order of 1978, which excludes white cement from its definition, indicating that white cement was not canalised for import by the State Trading Corporation of India. The Court found that the Cement Control Order of 1967, aimed at equitable distribution of cement, did not directly impact the interpretation of Appendix 5 Part B Serial No. 8. The Court also considered a Press Note from 1982, which did not mention white cement in the context of imports by the State Trading Corporation.

Issue 3: Properties and Distinctions of White Cement
The Court examined the properties and distinctions between white cement and ordinary portland cement, noting that white cement is considered a separate commercial commodity due to its different composition and uses. Referring to a Calcutta High Court decision, the Court agreed that white cement is not canalised under Serial No. 8 of Appendix 5 Part B, as it is distinct from ordinary portland cement in terms of chemical composition, pricing, and commercial treatment.

In conclusion, the Supreme Court allowed the appeals, setting aside the High Court's judgment. The appellants were directed to pay all customs duties related to the import of white cement within six weeks with interest. The penalty imposed was revoked, and the respondents were permitted to enforce the bank guarantee for any unpaid duty. No costs were awarded considering the circumstances.