1986 (1) TMI 276 - HC - Customs

Summary

Issues Involved:
1. Legality of the order dated July 12, 1984, debarring the petitioners from importing goods.
2. Validity of the show cause notices issued to the petitioners.
3. Applicability of the Import Policy and amendments to the petitioners' import licenses.
4. Alleged contravention of sub-clauses (f) and (g) of Clause 8 of the Imports (Control) Order, 1955.
5. Proportionality of the punishment imposed on the petitioners.
6. Legality of the debarment order against the directors without serving show cause notices.

Detailed Analysis:

1. Legality of the Order Dated July 12, 1984:
The petitioners challenged the order dated July 12, 1984, passed by the Deputy Chief Controller of Imports and Exports, which debarred them from importing goods and receiving import licenses. The petitioners argued that the order was based on an incorrect interpretation of the Import Policy and that the import of beef tallow was permissible under the licenses issued prior to the amendment on June 5, 1981. The court found that the impugned order was unsustainable as it ignored the consistent view of the Government of India and the Central Board of Excise and Customs, which held that the licenses issued prior to June 5, 1981, were valid for importing beef tallow.

2. Validity of the Show Cause Notices:
The petitioners were served with several show cause notices alleging that their R.E.P. licenses were not valid for the import of beef tallow. The court noted that eleven show cause notices were issued, and the impugned order dated July 12, 1984, disposed of two of these notices. The remaining nine notices were still pending. The court directed that these notices should be disposed of in light of the judgment within six weeks.

3. Applicability of the Import Policy and Amendments:
The petitioners contended that the import policy prevailing at the time of issuance of the licenses should govern their imports. The court agreed, stating that the public notice dated June 5, 1981, did not specifically prohibit the import of beef tallow under licenses granted before that date. The court referenced decisions by the Central Board of Excise and Customs and the Government of India, which supported this interpretation.

4. Alleged Contravention of Sub-Clauses (f) and (g) of Clause 8:
The impugned order cited violations of sub-clauses (f) and (g) of Clause 8 of the Imports (Control) Order, 1955. The court found that the petitioners did not contravene these provisions, as the import of beef tallow was permissible under the licenses issued before June 5, 1981. The court also noted that the impugned order was vague and unsatisfactory, and it incorrectly relied on condition 24 of Appendix 10 and paragraph 222(3) of the Import Policy.

5. Proportionality of the Punishment:
The petitioners argued that the punishment imposed was disproportionate to the alleged violation. The court did not find it necessary to address this issue in detail, as it had already determined that the petitioners were not guilty of any violation. However, the court emphasized that the authorities should exercise their quasi-judicial powers with care and in accordance with the law.

6. Legality of the Debarment Order Against the Directors:
The court found that the debarment order against the directors was issued without serving them with show cause notices, which was a clear error. The court highlighted the importance of following due process and ensuring that all parties are given an opportunity to respond to allegations against them.

Conclusion:
The petition partially succeeded. The court quashed the order dated July 12, 1984, and the related show cause notice. It also set aside the orders rejecting the petitioners' applications based on the debarment order. The respondents were directed to dispose of the remaining show cause notices and applications in accordance with the judgment and without considering the debarment order. The court emphasized the need for authorities to exercise their powers with care and in accordance with the law.