1990 (6) TMI 169 - AT - Customs

Summary

Issues Involved:
1. Legality of import of industrial coconut oil under OGL.
2. Determination of quantum of redemption fine.
3. Bona fide belief of the appellants regarding the legality of the import.
4. Applicability of previous judgments and clarifications.
5. Alternative relief by way of reduction in redemption fine.

Issue-wise Detailed Analysis:

1. Legality of Import of Industrial Coconut Oil under OGL:
The appellants imported two consignments of Refined Industrial Coconut Oil under the Export House Additional Licences, claiming that only edible coconut oil was canalised in the 1980-81 Policy period. They relied on a letter from the Chief Marketing Manager of the State Trading Corporation of India dated 30-10-1980, which stated that industrial coconut oil was not under their purview. However, the Collector of Customs & Central Excise, Ahmedabad, confiscated the goods and imposed a redemption fine, which was upheld by the Delhi High Court and the Supreme Court, declaring the import as unlawful.

2. Determination of Quantum of Redemption Fine:
The Supreme Court remanded the case to the Tribunal to determine the quantum of redemption fine in light of the decisions in M/s. D. Navinchandra & Co. and B. Vijay Kumar. The Supreme Court emphasized that the bona fide conduct of the importer is relevant for determining the quantum of redemption fine. The Tribunal was directed to consider the facts and circumstances relevant to the bona fide conduct of the importer and to decide the appeal within three months.

3. Bona Fide Belief of the Appellants Regarding the Legality of the Import:
The appellants argued that their import was based on a bona fide belief, influenced by:
- The letter from the State Trading Corporation dated 30-10-1980.
- Previous clearances of industrial coconut oil under OGL at different ports.
- The Government of India's order in Revision Petition dated 31-3-1982.
- The clarification from DGTD dated 12-7-1985.
The Tribunal, however, found that the appellants, being well-versed in import and export policies, should have sought clarification from the Chief Controller of Imports & Exports (CCI&E). The Tribunal concluded that the appellants' reliance on the letter from the State Trading Corporation and other factors did not establish bona fide belief, as they deliberately avoided seeking authoritative clarification from CCI&E.

4. Applicability of Previous Judgments and Clarifications:
The appellants cited previous judgments and clarifications to support their bona fide belief. However, the Tribunal noted that the subsequent policy changes in 1981-82 and 1982-83 clearly indicated that both edible and non-edible varieties of coconut oil were canalised. The Tribunal also distinguished the present case from the case of B. Vijay Kumar, where the import was based on a binding clarification from CCI&E.

5. Alternative Relief by Way of Reduction in Redemption Fine:
The appellants sought alternative relief by way of reduction in the quantum of redemption fine. The Tribunal noted that the appellants did not produce any material to show the sale price on high sea sale, the expenditure on other charges, or the margin of profit. The Tribunal concluded that since the appellants had already paid the redemption fine and cleared the goods, they had made their margin of profit. Therefore, the quantum of redemption fine did not call for any modification.

Conclusion:
The Tribunal dismissed both appeals, upholding the confiscation and the quantum of redemption fine. The Tribunal found that the appellants did not establish a bona fide belief regarding the legality of the import and did not provide sufficient material to justify a reduction in the redemption fine.