1988 (3) TMI 190 - HC - Customs

Summary

Issues Involved:
1. Validity of the "show cause notice" dated December 23, 1981.
2. Validity of the "adjudication order" dated January 19/20, 1982.
3. Validity of the "appellate order" dated March 22, 1982.
4. Interpretation of Import Policy amendments and their retrospective or prospective application.

Detailed Analysis:

1. Validity of the "show cause notice" dated December 23, 1981:
The petitioners challenged the "show cause notice" issued by the Assistant Collector of Customs, asserting that it was issued without jurisdiction. The notice alleged that the import of "portable generators" was in contravention of the Import (Control) Order, 1955, as amended, read with Section 3 of the Imports & Exports Control Act, 1947. The petitioners contended that during the period from July 27, 1981, to July 29, 1981, there was no restriction on the import of "portable generators" under their additional licenses, as "portable generators" were not included in Appendix 26 until July 29, 1981. The court found that the inclusion of "portable generators" in Appendix 26 could not have retrospective effect and therefore, the import during the said period was lawful.

2. Validity of the "adjudication order" dated January 19/20, 1982:
The adjudication order passed by the Collector of Customs was based on the premise that the import of "portable generators" was restricted. However, the court observed that the amendment to include "portable generators" in Appendix 26 was made on July 29, 1981, and could not apply retrospectively to imports made between July 27, 1981, and July 29, 1981. The court cited the appellate authority's decision, which supported the petitioners' contention that the amendment could not have retrospective effect. Consequently, the adjudication order was found to be without jurisdiction and liable to be quashed.

3. Validity of the "appellate order" dated March 22, 1982:
The appellate order upheld the adjudication order without adequately addressing the petitioners' arguments and relevant legal precedents. The court criticized the appellate authority for not providing detailed reasons and for failing to consider the Supreme Court's observations on the retrospective application of policy amendments. The court also referred to a similar case decided by the Central Board of Excise and Customs, which supported the petitioners' stance. As a result, the appellate order was also quashed.

4. Interpretation of Import Policy amendments and their retrospective or prospective application:
The core issue was whether the amendment to include "portable generators" in Appendix 26 could be applied retrospectively. The court referred to Paragraph 186(5) of the Import Policy, which allowed the import of items in Appendices 5 and 7, excluding those in Appendix 26. The court noted that the amendment to include "portable generators" in Appendix 26 was made on July 29, 1981, and could not affect imports made prior to that date. The court also cited the Supreme Court's judgment in Oswal Woollen Mills Ltd. v. Union of India, which held that amendments clarifying policy provisions do not have retrospective effect unless explicitly stated. The court concluded that the amendment was prospective and the petitioners' import of "portable generators" during the relevant period was lawful.

Conclusion:
The court quashed the "show cause notice," the "adjudication order," and the "appellate order," holding that the import of "portable generators" by the petitioners was lawful during the period from July 27, 1981, to July 29, 1981. The court issued a writ of certiorari and mandamus, discharging the petitioners from the bank guarantee and personal bond, and directed the respondents to issue a detention certificate within a fortnight. The Rule was made absolute with no order for costs.