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TMI Blog1987 (8) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... above stated appeals. 3. The applicants are Registered Exporters. M/s. East India Hotels Ltd., M/s. Sam Fashion Wear Pvt. Ltd. and M/s. Indo Burma Trading Corporation executed Letters of Authority in favour of the applicants to import goods covered by their respective additional licences. Accordingly, the applicants imported 24 consignments of Tam Bearings from Singapore, and sought clearance of 8 consignments against additional licences No. P/W/0378987 dated 18-10-1980 issued in the name of M/s. East India Hotels Ltd. They sought clearance of another ten consignments against the additional licence No. P/W/0379308 dated 23-10-1980 issued in the name of Sam Fashion Wear Pvt. Ltd. and the clearance of the remaining 6 consignments were sought against additional licence No. P/W/0379317, dated 27-10-1980 in the name of M/s. Indo Burma Trading Corporation. 4. On 25th November, 1980, the applicants opened a confirmed irrevocable Letter of Credit No. 80668 in favour of M/s. Interspan Pte Ltd. for an aggregate sum of U.S. $ 378300. One of the additional conditions attached to the said Letter of Credit read: This credit is valid at present only for U.S. Dollars 75,660. Further negotiati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector of Customs, AIR 1985, Calcutta 122. It was further contended before the Bench that the decision of the Supreme Court AIR 1971 S.C. 704 and the Bombay High Court judgment reported in 1981 E.L.T. 235 are binding on the Tribunal. 9. On behalf of the Department, it was contended that the Letter of Credit opened was not for the entire amount but was valid only for U.S. (dollars) 75,660/-. It was further urged that the subsequent amendment dated 9-5-1981 and 13-5-1981 were in the nature of fresh commitments. It was also contended that the credit of U.S. $ 75.660/- had been utilised prior to 1-4-1981 and as such, the Letter of Credit dated 25-11-1980 cannot be considered as an irrevocable for the sum of U.S. $ 3,78,300/-. It was further contended that the goods imported, namely, ball bearings appeared in Appendix 3 of A.M. 82 and in the absence of opening of an irrevocable Letter of Credit before 1-4-1981 the import of banned items during the Policy Year 1982 was unauthorised. For the Department reliance was placed on a judgment of the Punjab and Haryana High Court in the case of Oswal Woollen Mills Ltd. 1984 (18) E.L.T. 694 and also on the order of the Central Board of Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Shri Gagrat submitted that dates of shipment mentioned in the LC contemplates part shipments and therefore there was need for additional condition No. 6 and L/C itself was to be operated in stages. Shri Gagrat submitted that no other L/C had been opened subsequent to 25th November, 1980 and the Bank on the basis of the L/C dated 25th November, 1980 had made payments. In the said circumstances, the interpretation of L/C by the Bench in the appeals was not correct. Therefore, a question of law does arise as to the correct meaning and legal effect of the L/C and that question is required to be referred to the High Court. Shri Gagrat submitted that construction of document is a question of law as has been held by the Supreme Court in the case of Shree Meenakshi Mills Ltd. v. Commissioner of Income Tax, Madras 31 I.T.R. page 828. 13. Shri Gagrat then contended that the Bench had not properly understood the scope and ambit of para 222(1) of the A.M. 1982 Policy. The requirement of firm commitment in that paragraph was intended to exclude nominal and sham commitments and therefore while interpreting para 222 the Tribunal cannot construe the legality or validity of the Letter of Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitutes a question of law. The following are considered by the Supreme Court as questions of law : (1) When the point for determination is a pure question of law such as construction of a statute or document of title, the decision of the Tribunal is open to reference to the Court under Section 66(1), (2) When the point of determination is a mixed question of law and fact, while the finding of the Tribunal on the facts found is final, its decision as to the legality of those finding is a question of law, (3) A finding on a question of fact is open to attack under Section 66(1) as erroneous in law when there is no evidence to support it or if it is perverse. 17. The Letter of Credit in this case is the direct formulation of right of the applicant. Having regard to the facts and circumstances of the case, the validity of the import depends upon the construction of this document. And therefore, we agree with the contention of Shri Gagrat that a question of law does arise as to the correct meaning and effect of the L/C dated 25-11-1980. 18. As regards question No. 2, the Bench which decided the appeals had held that the licences are not valid firstly because that there had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional licence held by the applicants continue to be valid for the import of the said goods after 1-4-1981. (5) Whether the confiscation of the said goods imported by the applicant was justified. 20. During the hearing, Shri Gagrat conceded that question No. 5 is not a question of law arising out of the order and further conceded that the other questions are overlapping and has left the matter to the Bench for formulating the questions that would appropriately arise from the order. 21. In our opinion, the questions of law that appropriately arise from the common order in the appeals are : (1) Whether on the facts and in the circumstances of the case the L/C dated 25-11-1980 is a confirmed irrevocable Letter of Credit for U.S $ 3,78.300/- issued by the Corporation Bank in favour of M/s. Interspan Pte. Ltd., Singapore. (2) Whether on the facts and in the circumstances of the case there was firm commitment prior to 1-4-1981 by opening an irrevocable Letter of Credit to cover the goods ordered to be confiscated. (3) Whether on the facts and in the circumstances of the case the additional licences of which the applicants are the Letter of Authority holders are valid to cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in order. 24. While arguing the points on behalf of the applicants, the learned advocate was asked to explain how the interpretation of the letter of credit dated 25-11-1980 can be treated as a point of law requiring reference to and clarification from the High Court. The learned advocate stated that the interpretation of a document was a mixed question of law and fact which could be referred to the High Court for clarification. The advocate relied on the Supreme Court s decision in the case of Minakshi Mills Ltd. 31 ITR 828 to urge this proposition. The advocate was next asked as to whether Section 130 of the C.A. envisages any points of law or interpretation of a document not covered under the C.A. but under other laws to be referred to the High Court. The learned advocate s answer was in the affirmative, though he could not cite any authority in support. Basing his argument on the phraseology of Section 130 of the C.A., he mentioned that any question of law arising out of the Tribunal s order can be referred to the High Court. In his view, the points as listed in the application fully justified such a reference in terms of Section 130 of the C.A. 25. Similarly, the secon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities in terms of the provisions of law which have no relationship with the Customs Department. Applying the above-mentioned criterion, it has to be examined whether point No. 1 requires a reference to the High Court as submitted by the applicants. The learned advocate was at pains to explain that in passing the order No. 505-519/86 WRB, dated 2-5-1986, the Tribunal misinterpreted the letter of credit dated 25-11-1980, The advocate was therefore asked as to whether the Tribunal had committed an error in the order and therefore a rectification application in terms of Section 129B (2) would not be apt instead. The advocate stated that it was not so as it involved a question of interpretation of the L/C. While arguing the point, the advocate accepted the fact that the annexure to the L/C dated 25-11-1980 issued by the Corporation Bank was a part of the arrangement arrived at on the same day, namely, 25-11-1980 and was issued on that day only, though the advocate described this annexure as an arrangement between the two banks and not between the Corporation Bank and their client M/s. Rupak Exports. In other words, the applicants seek the remedy of the C.A., interpret this L/C. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d lead to a plethora of applications which is not the intention of the enactment. In this behalf, I rely on the case of Trustees Corporation (India) Ltd. v. CIT, 4 I.T.C. 378. 28. Similarly, it is seen that the Import Policy for 1981-82 has been issued by the Ministry of Commerce. The policy is an annual document issued by the Department of Commerce in the Ministry of Foreign Trade by virtue of the powers vested in that Ministry under the Imports and the Exports (Control) Act, 1947. The policy is administered by the Chief Controller of Imports and Exports and his subordinate staff. The Chief Controller of Imports and Exports works under the supervision and control of the Ministry of Foreign Trade. It would be therefore incongruous to believe that the provisions of such a document can be interpreted through a reference under the C.A. The Imports and Exports (Control) Act is a self contained Act and there are no provisions in that Act which would permit such an interpretation as urged by the learned advocate. Besides the Customs Department is under the control of the Ministry of Finance and the Customs Department administers the Customs Act. Under the Allocation of Business Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Raj Prakash Chemicals clarifies Point (2) in the application. When this is taken into account, we have the Supreme Court s ruling of the point in question and therefore no further clarification need be sought from the Hon Bombay High Court on the point in question. In fact, the Supreme Court s judgments in the case of Raj Prakash Chemicals Ltd. and the identical cases of Indo Afghan Chamber of Commerce, AIR 1986 S.C. 1567 and M/s. Godrej Soaps Private Ltd. 1986 (26) E.L.T. 465 have been passed in the year .1986 and they have taken into account the Supreme Court s decisions in similar matters in the past and considered all the relevant facts. They lay down the law in terms of Article 141 of the Constitution. These judgments have been quoted a number of times before this Bench. Brother Hegde s order does not take them into consideration. But since these judgments lay down the. law of the land they hold the field; and as per these pronouncements there is not an iota of doubt that the imports of Rupak Exports are subject to the requirements of the import policy for the year 1981-82 as per Para 222 of the policy. In this view the imports were hit by entry at Serial No. 557 of App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of credit is not a document filed under the Customs law, nor is interpretation of Import Policy a matter for reference to the Hon ble High Court in terms of Section 130 of the Customs Act. That section, according to learned Member (T), is applicable only in respect of documents required to be filed under the Customs Act, 1962 or to cover interpretation of points of law arising out of the Customs Act alone. Apart from the aforesaid, view, the learned Member (T) has also held that the questions relating to interpretation of Import Policy are settled by the Hon ble Supreme Court by a number of judgments such as in the case of Raj Prakash Chemicals [1987 (30) E.L.T. 45], Godrej Soaps Pvt. Ltd. [1986 (26) E.L.T. 465] and Indo Afghan Chamber of Commerce (AIR 1986 S.C. 1567) and, therefore, it has been held by the learned Member (T) that the law being settled, there is no need for a reference to the Hon ble High Court. 35. Learned advocate for the applicant Shri J.R. .Gagrat has stated that all the 4 questions are clearly questions of law inasmuch as they involve interpretation of a document, whether the letter of credit opened by the applicant is a firm commitment or not and secondly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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