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TMI Blog1986 (10) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... ods pending chemical test and submission of documents. The Proper Officer of Kandla Customs assessed the said goods provisionally. He also allowed clearance of the goods under OGL in terms of para 179(5) of the Import Policy A.M. 1981. 3. The Collector of Customs and Central Excise, Ahmedabad, in exercise of his powers under Section 130 of the Customs Act (as it then stood), issued a review show cause notice, dated 4-2-1981 alleging that palm stearin is a type of palm oil, further the importers was not an Export House as per para 169 of the Import Policy, further, the licences expired on 23-9-1980 and therefore not valid for import. Again that crude palm stearin has to be considered as a type of palmolin and that palmolin was a canalised item in the Import Policy A.M. 81 and therefore could not be imported against additional licences to which the licences produced belonged. It was further alleged that the importation of crude stearin is unauthorised because of the Public Notice No. 48-ITC(PN) 80, dated 9-12-1980 by which in Appendix 3 relating to banned items palm stearin/ palm kernel oil was added under Item 368 and in Appendix 9 relating to canalised item the entry palm oil (al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... policy did permit the import by the Export House and that similar imports were released at Kandla as well as Bombay and taking penal action against the firm would amount to discrimination and subjecting it to unequal treatment. They have requested that the show cause notice either be cancelled or withdrawn. 5. The Collector of Customs and Central Excise, Ahmedabad, " after affording a personal hearing to the importers and after considering their contentions recorded his findings as follows :- (i) The licence period had expired on 23-9-1980. The Bill of Lading was dated 25-9-1980. The goods arrived at Kandla on 6-10-1980. The grace period cannot be claimed as a matter of right and therefore the importation was on a totally invalid licence, (ii) Palm Stearin is one of the palm oils. Accordingly palm stearin falls under Appendix 3 with effect from 15-4-80 and therefore is a banned item and as such the import of palm stearin by a private party is prohibited, (iii) That the importer can in no way be considered as an Export House on the strength of a letter of authority. Therefore, the importer cannot be considered as an agent or licence-holder. 6. Ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise and Customs in several cases. The Collector also failed to notice that physical and chemical characteristics of palmolin and palm stearin are different. Palmolin and palm stearin are not considered as palm oil. They are derivatives of palm oil in as much as they are fractioned products. (4) The Collector also committed an error in holding that Public Notice No. 48, dated 9th December, 1980 would govern the import. This Public Notice, dated 9th December 1980 has no retrospective effect. It had come into force even much after the arrival of the goods and also after the Bill of Entry were entered. (5) The Collector s interpretation of Supreme Court judgment in Bharat Barrel Drum Manufacturing Co. Pvt. Ltd. s case is totally incorrect. The Supreme Court in the said case has held that the Public Notice would not operate retrospectively or affect the imports permissible under licence issued prior to the issue of the Public Notice. 8. Shri Jaikar relied on the decision of the Supreme Court reported in A.I.R. 1971 S.C. page 704 (Bharat Barrel Drum Manufacturing Co. Pvt. Ltd. v Collector of Customs, Bombay) and also on the unreported decision of the Bombay High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Export House during the relevant policy. (3) Palmolin and palm stearin are two fractions of palm oil and therefore the Collector was justified in holding that at the relevant time the time in question was canalised, (4) Admittedly, the palmolin was specifically included in the canalised item and palm stearin being another fraction of palm oil is deemed to have been included under Item 5 (iv) of the Policy. (5) Palmolin and palm stearin are not chemically different. Palm stearin is a processed palm oil, (6) The licence was an additional licence and it was not transferable. Issuing a letter of authority amounts to transfer of licence and therefore the import by the transferee was not valid, (7) If an item of the policy is capable of two interpretations and if the interpretation put by the Customs authority is a possible interpretation, the same should prevail having regard to the decisions of the Supreme Court reported in 1963 Supreme Court page 1319 and 1973 Supreme Court page 194. (8) The expression used in Item 5(iv) of Appendix 9 was including Palmolin and therefore the meaning of palmolin gets expanded so as to include all other fractions of palm oil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in their favour. On 8th September, 1980 this letter of authority was given under para 382 of Handbook. By reason of this letter of authority they became entitled to place orders, open Letter of Credit and to perform all other functions for the utilisation of licence. It was also contended that this letter of authority was produced during the personal hearing. The Collector, in his order, had observed that : Such a letter of authority had not been produced either alongwith the letter, dated 14-3-1981 or even during the course of personal hearing. This observation of the Collector does not appear to be correct. If there was no such letter of authority the Collector need not have discussed the applicability of para 382. But the Collector did discuss the implication of para 382 and recorded a finding that the importers cannot be considered as an agent for licence holder. Even assuming that what has been observed by the Collector was correct, the Collector could have given an opportunity to the appellants to produce the letter of authority before actually deciding the issue against them. The appellants have produced a photo copy of the letter of authority in their favour. According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23-9-1980. Paragraph 205(2) of Handbook of Import Export Procedures 1980-81 reads : Where the date of expiry of an import licence falls before the last date of a month, the licence will automatically be valid to cover shipment made upto the end of that month. By reason of this paragraph the validity period of this licence gets extended upto the end of September, 1980. Para 205 (1) reads : The validity of an import licence is decided with reference to the date of actual shipment/despatch of the goods from the supplying country and not the date of arrival of the goods at an Indian Port . Thus it is clear that the date of arrival of the goods has no relevance in determining the validity of the licence. The validity depends upon the date of actual shipment. The three Bills of Lading are dated 23rd September, 25th September and 27th September, 1980 respectively. All these are before 30-9-1980, within the extended validity period of the licence. In the said circumstances, the appellants are not even required to rely on the grace period of sixty days provided under paragraph 207(1) of the Hand Book. The Collector, in our opinion, had committed an error in assuming that the validi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prohibited except as per Appendix 9 of the Import Policy." 13. As has been seen earlier, the import has been allowed by the Assistant Collector. The Collector had sought to review the Assistant Collector s order in exercise of his power conferred under Section 130 as it then stood. The Collector had issued a review show cause notice. In the said show cause notice, the allegation made was further the Chief Controller of Imports and Exports, New Delhi vide their Public Notice No. 48-ITC (PN) 81, dated 9-12-1980 added palm stearin/palm kernel oil in Appendix 3 and palm oil (all types including palmolin but excluding palm stearin, palm kernel oil)/palm seeds in Appendix 9". It was further stated that this amendment deemed to have been made in the import policy for A.M. 1980-81 published on 15-4-1980. But while recording his finding, the Collector had considered the import as falling under Serial No. 669 of Appendix 3 and therefore the import was impermissible. In the case of review show cause notice, the Collector cannot traverse beyond the show cause notice. He will have to confine himself to the allegations contained in the review show cause notice. This is because the party wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. In the absence of such evidences, the Collector, in our opinion, was not justified in taking a view that palm stearin is a type of palm oil. 15. The question whether palm stearin is a type of palm oil came up for consideration in several decisions of the Central Board of Excise Customs. The Board consistently held that palm stearin is different from palm oil. 16. The Collector had observed that palmolin and palm stearin are types of palm oil. In Godrej Soaps Ltd. and Others reported in 1981 E.L.T. 72 (G.O.I.) the Government of India (3 Members Bench) considered the question as to whether palmolin is the same as palm oil. Before the Government of India, Shri S.S. Ray, Senior Advocate contended that palmolin is nothing but processed palm oil. Shri Ray further submitted that Notification No. 150/64-C.E. exempt palm oil falling under Item 12 of Central Excise Tariff. He emphasised that the palm oil covered by the said Notification is deemed as processed Palm Oil inasmuch as unprocessed palm oil, or, in other words, crude palm oil is exempted under another Notification No. 33/63-C.E., dated 1-3-1963. It was also urged before the Government of India that as palmolin is derived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the mind of non-comprehending the ratio of the decision. No doubt, that the Government of India was concerned with the liability of excise duty on palmolin but the basic question was whether palmolin was the same as palm oil. The Government held that fractionation is a manufacturing process which is undertaken by the aid of power as a result of which a manufactured product distinct from palm oil as known to the market comes into being. The product so obtained was different from palm oil both technically as well as on the point of view of name and character in trade parlance. The Government categorically rejected the contention of Shri Ray that palmolin is nothing but processed palm oil. The ratio of the decision of the Government of India as well as the Board in the various cases referred to earlier, applies to the facts of the present appeal in all fours. Shri Pal, appearing for the Collector had submitted that the orders of the Board and the order of the Government of India are not binding on the Tribunal. They may not be binding on the Tribunal but they certainly have persuasive value. We agree with the ratio of those decisions. 18. The next aspect that remains for considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n namely whether the Public Notice 48 of 80, dated 9-12-1980 is retrospective and that it takes effect from 15-4-1980 the date on which the policy A.M. 81 was issued. It is settled now that Public Notice is non-statutory. All non-statutory orders and notices will have operation prospectively and not retrospectively. A vested right cannot be divested by non-statutory orders or notices even if they are worded as having retrospective effect. It is only by legislative process that vested right can be divested with retrospective effect. 20. The above apart, even the wording of the Public Notice No. 48 of 80, dated 9-12-1980 is not such as to come into operation on the date of issue of the Policy A.M. 81 as has been held by the Collector. In the case of Notifications or orders, which are intended to have retrospective effect, the expression normally used is that the Notification or order shall be and shall always be deemed to have been made on such and such a date. Such an expression is not found in the Public Notice No. 48 of 1980. The Collector s interpretation of the Supreme Court judgment in case of M/s. Bharat Barrel Drum Manufacturing Co. is inapt. The Supreme Court has categor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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