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TMI Blog1986 (11) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... to 10, were filed by the importers concerned against the respective order-in-original passed by the Collector of Customs, Calcutta. 3. The facts of the cases, in brief, are as follows:- (i) Appeal No.C-152/84-Cal. (a) M/s Mansingka Brothers, respondent No.1, entered into a contract No. Oil/002/0/83 dated 15-3-1983 with M/s Kuok (Singapore) Pvt. Ltd., Singapore for importing 1500 M/Tons of Stearin Fatty Acid. The goods were to be shipped in part consignments. The first consignment of 200.17 M/Tons of the goods arrived at Calcutta Port on 13-9-1983 per SS John Everett . The respondent filed Bill of Entry on 13-9-1983 for clearance of the goods under OGL - Appendix 10 - Item No. 1, list 8, Part III of I.T.C. Policy 1983-84. On 24-9-1983 the Assistant Collector of Customs issued a show cause notice alleging that the importation of the goods was not authorised under Open General Licence vide Appendix 10 of the Import Policy. It was also stated in the show cause notice that Stearin Fatty Acid was covered by the term Palm Fatty Acid appearing at Sr.No. 50 of Appendix 4 of the Import Policy 1983-84 as Palm Patty Acid is a generic term and stearing fatty acid is derived from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought clearance of the goods under OGL vide Sr. No.1 of Appendix 10, list 8, Part III of Import Policy 1983- 84. Bill of Entry for clearing the goods was filed on 9-11-1983. The Collector of Customs, Calcutta, vide his order dated 17-11-1983, allowed the clearance of the goods on caution. No show cause notice was issued to the respondents before passing this order and no opportunity was given to explain their case. Copy of the order of caution was also not endorsed to the respondents. Extract from the Collector s order dated 17-11-1983 in File No. S/33-78/83-A (Gr. I), as filed with the appeal memorandum, reads as follows :- In so far as the technical aspect is concerned I have discussed with the Deputy Collector Chemist as well as with the concerned Deputy Collector. My tentative view is as follows :- From palm oil by fractionation, two products are obtained. The first one is palmolein and the other one is palm stearin. From palm stearin by further processing, two products are obtained, one is fatty acid and another is glycerin. Here we are concerned with the fatty acid which is obtained from palm stearin. Here we find that fatty acid can be obtained from palm stearin whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o give a clarification. Dy. C.C. s opinion has also been seen by me. He also said that both the items should be taken as the same. In order to find out whether palm fatty acid and palm stearin acid are same or not, it would have been better to find out from the market whether they are known as different entities in the market parlance. But there is no Indian market of these goods and the importations are very rare and therefore there is no question of finding out whether In the market parlance they are known as same or not. In any case, if any commodity as palm stearin or palm fatty acid was known as a different entity in the market, then the technical literature would have described this as such. In fact, 1 find from the technical literature mentioned above that the crude fatty acid described therein does not distinguish between the fatty acid derived from palm oil directly or from attraction of palm stearin. Obviously, there is no such other product known either in the trade or in the technical literature as palm fatty acid, otherwise it would have been distinguished even in the technical literature also. In fact, the palm stearin fatty acid is written by deriving the nomencla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector of Customs filed this appeal. (ii) In the remaining 9 appeals, vide appeals at serial Nos. 2 to 10, the appellants imported stearin fatty acid against contracts entered into with foreign suppliers before 11-11-1983. On arrival of the goods, the appellants sought clearance of the same under O.G.L. vide Appendix-10(1) of the Import Policy for 1983-84 on the ground that the goods did not figure in any of the Appendices 3 to 9 and 15 of the Import Policy. The Custom House, Calcutta took a different view that the goods were covered by expression palm fatty acid appearing at serial No.50 of Appendix 4 of the Import Policy for that year and hence the import of the same was banned prior to 11-11-1983 and canalised through State Trading Corporation of India from 11-11-1983. The appellants filed Writ Petitions in Calcutta High Court and obtained interim orders, but the same were later-on vacated/ withdrawn. The appellants then submitted before the adjudication proceedings under the Customs Act before the Collector of Customs, Calcutta. The Collector of Customs did not accept the contentions of the appellants and held the import of the goods as unauthorised, being covered by Serial N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any proceedings in which a Collector of Customs as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of such decision or order, and may by order direct such Collector to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order. The Adjudicating Officer has been defined in Section 2(1) of the Customs Act. According to this definition, the Adjudicating authority does not include Collector (Appeals) . In view of this definition, the Collector who passed the order dated 17-11-1983 was an Adjudicating authority. Accordingly, in terms of provision of Section 129-D(1) of the Customs Act, the Central Board of Excise Customs could review the said order passed by the Collector. Section 129-D(4) of the Act provides that when an application is made by the Collector in pursuance of an order under sub-section (1) of Section 129-D, it shall be heard by the Appellate Tribunal as if such application were an appeal made against the decision or order of the Adjudicating Authority and the provisions of the Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsonal hearing. The Collector did not also disclose any evidence to the respondents before passing the order. The respondents were not allowed to state their case. The Collector decided the case subjectively and not objectively. The order passed by the collector was, therefore, not an order under Section 122 of the Customs Act. As the order was not under Section 122 of the Act and the Collector did not pass the said order as an adjudicating authority, the Board could not review the order under Section 129-D(1) of the Act. According to this section, the Board can call for and examine the records of any proceedings which the Collector of Customs had passed as an adjudicating. The appeal filed by the Department should be dismissed on this ground alone. Shri Nankani has relied upon the judgment of the Hon ble Supreme Court in the case of Shankerlal Aggarwal and others v. Shanker Lal Poddar and others reported in AIR-1965-SC-507 at page 511, para 13. Shri Nankani has also stated that the order of caution was not an appealable order. It was an executive order. In support of his argument, he cited the decision of this Tribunal in the case of T.G. Merchant and Company v. Collector of Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e term Palm fatty acid and hence import of palm stearin fatty acid was permissible under O.G.L prior to 11-11-1983. Shri Nankani stated that the judgement of Delhi High Court was binding on the Tribunal. In support of his contention, he cited the judgments reported in (i) 1986-(7)-ECR-233 = 1986(24) ELT 635 (Tri.) (M/s. Maltexii Masters Limited, Patiala v. Collector of Central Excise, Chandigarh), (ii) 1984 (17) E.L.T. 331 (Atma Steels Pvt. Ltd. and others v. Collector of Central Excise, Chandigarh and others), and (iii) 1978-ELT-J-552 (Mercantile Express Company Limited v. Assistant Collector of Customs Others). He also argued that the Additional Collector of Customs, Bombay in his adjudication order dated 17-10-1984 held in a similar case that palm stearin fatty acid was different from Palm Fatty Acid and was not covered by serial No. 50 of Appendix 4 of the Import Policy, 1983-84. The Central Board of Excise Customs did not review the said order of the Additional Collector, Department accepted the decision. 7. In reply to the arguments of Shri Nankani, Shri Ghosh stated that the facts of the case in 1984 (16) ELT 269 were distinguishable from those of the present case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise, Chandigarh (1984 (17) E.L.T. 331). 8. Shri S.D. Nankani, learned Advocate for the appellants No. 2, 3, 4, 8 and 9 stated that he would first argue for appellant No. 2 in Appeal No. C-24/85-Cal. and then adopt those arguments in the other four appeals as the salient facts and issues were common, except slight variations in dates etc. At the beginning of his arguments, he referred to the Collector s observations in para 12.1 of the adjudication order in appeal No. C-24/85-Cal. to the effect that the importers should have sought clarifications from the concerned authorities before entering into any contract with the foreign suppliers and said that because of those observations he would like to submit the following documents as additional evidence :- (i) Copy of letter No. 1 (P) I EP/CLA 752 dated 3.7.85 from the Government of India, Directorate General, Technical Development (I EP Cell), New Delhi to M/s. Ashok Industries, Bombay; (ii) Copy of letter No.1 (2)/I EP/CLA/492/85/2145 dated 15-11-85 from the Government of India, Directorate General of Technical Development (I EP Cell), New Delhi to M/s. B. Vijay Kumar Co., Bombay; (iii) Copy of All India Im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t an OGL item...... . The appellants entered into a contract for import of 3500 M/Tons Industrial Stearin Fatty Acid . In the remarks column of the contract it was stated by the foreign suppliers we guarantee that goods will be other than Palm Fatty Acid. Palm oil is obtained from palm fruit by extraction process. After palm oil is obtained, the oil never remains to be palm fruit. From palm oil, two products are obtained by fractionation, one is the liquid fraction called palmolein and the other is solid or semi-solid fraction known as palm stearin. After this fractionation, palm stearin becomes a completely different product separate from palm oil. It ceases to be palm oil. Palm Stearin Fatty Acid is obtained from Palm Stearin by hydrolysis process. Therefore, the source of palm stearin fatty acid is palm stearin and not palm oil or palm fruit. Palm Fatty Acid is derived from palm oil directly. This fatty acid is mentioned at Serial No. 50 of the Appendix-4 of Import-Export Policy 1983-84. In Godrej Soaps Ltd. and others, the Government of India (Full Bench) in their order-in-review No.208-B of 1980, dated 26-9-1980 reported in 1981 ELT 72 (GOI), have held that palmolein and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the following products :- (1) Palm Fatty Acid Distillate (PFAD), (2) Split Palm Stearin Fatty Acid (SPSFA), (3) Edible Palm Oils, (4) Coconut oil for edible purposes. Sub-para (iii) (iv) above show that the State Trading Corporation has treated Palm Stearin Fatty Acid as a separate commodity. (v) In a telegram addressed to ASCOSOAP CALCUTTA with post copy to Shri P.R. Bharech, Chief Executive, Asiatic Soap Company, Calcutta (Copy of the telegram submitted at page 223 of the Paper Book filed by the appellants). The State Trading Corporation of India, New Delhi quoted the sale price of split Palm Stearin Fatty Acid (Bulk) at ₹ 9,584/- per M/Ton Ex. Jetty and ₹ 9,809/- per M/Ton Ex. Tank. (vi) Indian Soap Toiletries Makers Association, Bombay in their Circular No. ISTMA/106/12/84, dated 9-3-1984 to All Members of the Association circulated the release prices of S.T.C. in respect of :- (a) Split Palm Streain Fatty Acid - Ex. Jetty ₹ 9,584/- per M/Ton - Ex. Tank ₹ 9,809/- per M/Ton. (b) Palm Fatty Acid Distillate - Ex. Jetty ₹ 9,078/- per M/Ton - Ex. Tank ₹ 9,291/- per M/Ton. Along with the above circular the Assoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, it was under OGL during 1983-84 policy under 10(1) . (x) Again, in letter No. 1 (2)/I EP/CLA/492/85/2145 dated 15-11-1985 to M/s. B.Vijay Kumar Co., the Government of India, Directorate General of Technical Development (I EP CELL) stated that Palm Stearin Fatty Acid is not the same as Palm Fatty Acid, therefore, it was under O.G.L vide Appendix 10(1) of the I.T.C. 1978-79 . (xi) Paragraph 242(3) at page 73 of the Import-Export Policy 1983-84 (Volume I) provides that an actual user may seek clarification from the Directorate General of Technical Development on the scope of any item in Appendices 1, 2, 3, 4, 5, 8, 9, 10,15 and 30. Procedure to be followed in case of conflicting clarifications has also been laid down therein. The importers M/s. B. Vijay Kumar and M/s. Ashok Industries sought for clarification in respect of Palm Stearin Fatty Acid and there was no conflicting clarifications. As per provisions of the Import Policy Book for the year 1983-84, the Directorate General of Technical Development are competent authority, to give such clarification. In this case, D.G.T.D. has given necessary clarification which shows that Palm Stearin Fatty Acid is not the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he former is not covered by the term Palm Fatty Acid appearing at Sr. No.50 of appendix 4 and he allowed the goods to be cleared under OGL. No appeal has been filed by the Department against this order-in-original. (xvi) In the case of Kaptan s Enterprises and another v. Union of India [AIR-1986- Delhi-221) the Hon ble Delhi High Court has held that the import of Stearin Fatty Acid under O.G.L. was permissible prior to 11-11-1983. The first and last sentences of paragraph 13 of the judgment have very categorically said so. The appellants case is squarely covered by this judgment. (vie) In paragraph 12.5 of the order-in-original the Collector has held that there is no product chemically known as Palm Fatty Acid and that none of the literature available on the subject draw any distinction between Palm Stearin Fatty Acid and Palm Fatty Acid. This finding of the Collector is not correct. If there was no product known as Palm Fatty Acid, then the term Palm Fatty Acid could not find place at Serial No. 50 of Appendix 4 of the Import Export Policy for 1983-84. Collector has also not mentioned which particular literature was consulted by him. He has observed that Palm Fatty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 to 9 and 15 of Import-Export Policy 1983-84. Condition (1) of the I.T.C. order was thus fulfilled. The Imported goods did not fall under any of the items in Parts I and II of the Schedule to I.T.C. order 1/83. The goods were covered by serial 16 of Part III of the said schedule. Condition No. (26) of the I.T.C. order 1 /83 was also satisfied as the goods were shipped on or before 31-3-1984. The goods were imported for stock and sale. The appellants case is, therefore, fully and squarely covered by Delhi High Courts Judgment reported in AIR-1966-Delhi-221. Import of Industrial stearin fatty acid under O.G.L. was valid. 14. Regarding the 4th proposition, the learned advocate argued that according to Black s Law Dictionary 5th Edition, page 967, the definition of Obiter is by the way; in passing; incidentally; collaterally. The decision in Kaptan s Enterprises case is not by way of obiter. Three questions, as in paragraph 10 of the judgment were formulated on the basis of the petitioners contentions in the Writ Petition and the stand taken by the Department. In paragraph 10 and subsequent paragraphs the High Court examined the points raised in the Writ Petition. In paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the following decisions in support of his contention : (i) 1984 ECR 886 (Bombay) (Gujarat State Export Corporation Ltd. and another v. Union of India and another) (ii) 1984 (18) ELT 533-(CEGAT) (Shiama Engine Valves Ltd. v. Collector of Customs, Bombay). (iii) Order No. 596-A of 1981, dated 21-9-81 passed by the Central Board of Excise Customs in appeal No. APP/72/81 of M/s. Kamani Oil Industries. 17. Arguing on the proposition (VII), Shri Nankani stated that there was no deliberate or contumacious violation of law on the part of the appellants. There was a practice. They were guided by the order-in-original passed by Shri T.S. Swaminathan, the then Collector of Customs, Calcutta. So, no penalty should have been imposed on the appellants. In support of this contention, he cited the judgments of the Hon ble Supreme Court in the cases of (i) Hindustan Steel Limited v. State of Orissa (AIR-1970-SC-253) and (ii) Cement Marketing Co. of India Ltd. v. Asstt. Commissioner of Sales Tax (AIR-1980-SC-346). Further, relying on the Andhra Pradesh High Court s judgment in Gyanoba Jaswant Jadav v. Collector of Central Excise, Hyderabad (AIR-1974-AP-76), he stated that the pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with condition (26) of ITC order 1 /83 by opening letter of credit by 29-2-1984, but the bank failed to do its duty. For this fault of the bank, the appellants should not be penalised or punished. Regarding redemption fine and penalty, the learned Advocate adopted the same arguments as in appeal No. C-24/85-C. 20. While arguing for the appellants in appeal No.C-90/85-Cal and C-91/85-Cal, Shri Nankani has stated that the issues involved in these two appeals are the same as in Appeal No.C-24/85-Cal and the salient facts are also similar, except that the appellants did not open any letter of credit in these two cases. Contracts in both the cases were entered into before 11-11-1983 and the shipments were made in June, 1984. Barring letter of credit, other requirements as per condition (26) of the I.T.C. Order 1/83 were satisfied. In appeal No.C-91/85-Cal., the original stipulated period of shipment was November, 1983 to February, 1984. Shipment upto 31-3-1984 was permissible without letter of credit as per condition (26) of I.T.C. Order 1/83. The period of shipment was extended upto 30-6-1984. in pursuance with the requests of foreign suppliers as there was Dock Workers strike at C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aptan s Enterprises v. Union of India (AIR 1986-Delhi-221). Public Notice can not also have retrospective effect. This proposition has been clearly laid down by the Supreme Court in 1978-ELT-(J-375) (Cannanore Spinning and Weaving Mills Ltd. v. Collector of Central Excise, Cochin) and AIR-1971-SC-704 (Ms. Bharat Barrel and Drum Mfg. Co. Ltd. v. Collector of Customs, Bombay and another) and by this Tribunal in 1984-ECR-301 = 1984 (16) ELT 497 (Tri.) (M/s. Patel Impex Pvt. Ltd. v. Collector of Customs, Ahmedabad). Normally an ITC Order is amended by another ITC order and then Public Notice is issued on the basis of amending ITC Order. ITC Order No. 33/83 and PN No. 48/83 both dated 14-11-1983 and I.T.C. Order No. 29/83 and P.N. No. 40/83 both dated 21-9-1983 are instances in this regard. In the present case, no amending I.T.C. order was issued in respect of Palm Stearin atty Acid. Further, the Public Notice 47/83 canalised the items. Those were not banned. In a similar situation (AIR 1966-SC-478), Supreme Court held that NIL policy was not a ban. Public Notice 47/83, dated 11-11-1983 did not make any difference so far as the imports under OGL 1/83 (I.T.C. Order No. 1/83) were conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-SC-1271) did not decide any merit. Reference to that judgment is not relevant to the present case. 22. Shri Bhaskar Gupta, learned Advocate, who argued for M/s. Kusum Products Limited in appeal No.C-129/85-Cal submitted written arguments in the Court, with a copy to the learned advocate for the respondent No.2. In the written submissions, the main contentions, besides mentioning certain errors and inconsistencies in the adjudication order of the Collector, are that prior to 11-11-1983 the impugned goods, viz. Stearin Fatty Acid were permissible under O.G.L vide I.T.C. Order No.1/1983, dated 15-4-1983, and that ITC Public Notice No. 47/83, dated 11-11-1983 had no effect as it did not have statutory backing. In support of these contentions, reliance has been placed on the following judgments:- (i) AIR-1962-SC-1893 (East India Commercial Company Ltd. v. Collector of Customs, Calcutta) (ii) 1981-ELT-235. (Lokash Chemical Works v. Collector of Customs, Bombay) (iii) AIR-1966-SC-478. (Jt. Chief Controller of Imports and Exports v. Amin Chand Mutha). Further, amendment of Import Policy cannot have retrospective effect so as to affect the appellants who had, on the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .C. (PN)/83, dated 11-11-1983. (i) Palm Oil is classified under Central Excise Tariff as vegetable non-essential oil attracting duty under Tariff Item 12 whereas Palm Stearin is classified under Central Excise Tariff Item 68. 22.2. It has also been stated that entries in the Schedules and Appendices in the Import-Export Policy are to be strictly construed and there cannot be any intendent nor can anything be added to the entry and only the language of the entry should be considered. It has further been stated that the entries appearing in Import Trade Control Policy are to be construed in their popular and commercial sense. This principle has been unequivocally accepted by the Supreme Court and various High Courts and the same are binding on the Customs as well as Import Control Authorities. The written submissions also say that technically Palm Fatty Acid and Palm Stearin Fatty Acid are different from each other. Palm Fatty Acid is obtained from the Palm Oil by direct processing whereas Palm Stearin Fatty Acid is obtained from Palm Stearin. It has been urged that Palm Fatty Acid and Palm Stearin Fatty Acid, being two distinct and separate commodities, Palm Stearin Fatty Acid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Collector s order was not correct. Paragraph 13.1 of the Collector s order was also not correct as a letter of credit was opened by the appellants in respect of the impugned goods on 5-5-1983 which was subsequently amended on 23-9-1983 to substitute Stearin Fatty Acid. In the Collector s order, it is mentioned that the contract was dated 2-11-1983 whereas the correct date of entering into contract by the appellants was 15-9-1983. 22.5. He also argued that the appellants satisfied all the conditions prescribed in the O.G.L.1/83. The appellants were actual users, contract was entered into on 15-9-1983, letter of credit was opened on 5-5-1983 as amended on 23-9-1983 and the goods were shipped on 24-6-1984, thus fulfilling all the conditions laid down in the I.T.C. order 1/83. As a result, the goods were eligible for importation under the said ITC Order, prior to 11-11-1983 as well as from11-11-1983. 22.6. As regards imposition of fine and penalty, the learned Advocate stated that the bona fide of the appellants was beyond any doubt. No mala fide was also alleged by the Collector. Confiscation of the goods and imposition of redemption fine and penalty were not in the judicio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice. Test report was not asked for, nor did they ask for cross examination of the Chemist who tested the samples. The effect of not challenging the test reports is that the authorities were justified in proceeding to act on the basis of the said test reports. Madras High Court s decision in the case of Ramlinga Choodambikai Mills Ltd. v. Government of India and Others (AIR 1975 Madras 217) =1984 (15) ELT 407 is relied upon in this connection. Similarly, Poram Brochure relice upon by Collector was also not challenged to show that the inference drawn from the Brochure is not correct. 23.3. Since 1957, the Supreme Court laid down certain canons in regard to the law or approach in construing Import and Export Policy of Government. According to these, the Import and Export Policy cannot be static. It is bound to be flexible. The needs of the country, the position of foreign exchange resources, the need to protect national industries, preservation of Natural resources and all other relevant considerations have to be examined by the Central Government from time to time and the rules in regard to import and export suitably adjusted. It is, therefore, idle to suggest that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be imported under Open General Licence, subject to certain conditions as stated therein. Condition (1) of this I.T.C. Order is that the items to be imported are not covered by Appendices 3, 4, 5, 6, 7, 8, 9 and 15 of the Import and Export Policy 1983-84 (Volume-I). Condition (27) says that nothing contained in this licence shall affect the application to any goods, of any other prohibition or regulation, affecting the import thereof, in force at the time when such goods are permitted. Part-III of the Schedule to I.T.C. Order 1/83 relates to items allowed for import by actual users, and others for stock and sale. Item 16 of this Part III is a residuary item. It reads All other items permitted under Open General Licence in terms of the import policy in force, other than those covered by parts I and II of the Schedule. This is also a condition of this I.T.C. Order. I.T.C. Policy has been bodily engrafted in the said O.G.L. Order. Note (I) below Part III of the Schedule of the I.T.C. Order says that the entries in Parts I, II and III of the said schedule allow only those items and their specifications, sizes, types, varieties, compositions, categories etc.; as are covered under O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the I.T.C. Policy. 23.6. By Public Notice No.47/83 dated 11-11-1983, Palm Acid Oil, Palm Fatty Acid, Palm Kernel Oil, Palm Stearin, Palmitic Acid and soap stock were deleted from Appendix-4, A new paragraph 10 was added to Appendix 9 of the Import Policy 1983-84, with heading Fatty Acids and Acid Oils . It was stated in that paragraph that import of the following items would be made by the State Trading Corporation of India Limited only under Open General Licence:- (i) Lauric Acid. (ii) Oleic Acid. (iii) Stearic Acid. (iv) Palmitic Acid. (v) Palm Fatty Acid. (vi) Palm Acid Oil. (vii) Palm Kernel Oil. (viii) Palm Stearin. (ix) Other Fatty Acids, pure or mixed, including acid oil, all types. (x) Soap Stocks. Palm Fatty Acid appearing at Item (V) of para 10 of amended Appendix-9 includes palm oil fatty acid and palm stearin fatty acid. All palm based products were in Appendix-4 earlier according to the scheme of the Import Policy. Other Fatty Acids appearing at Item (IX) of paragraph 10 of Appendix would mean all other Fatty Acids not covered by the group (i) to (viii). After issue of this Public Notice, only those goods could be importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and law. In the case of Liberty Oil Mills and Others v. Union of India and Others (AIR-1984-SC-1271), past decisions of the Supreme Court, Government of India and the Central Board of Excise and Customs were cited, but the Supreme Court did not consider them to be applicable as the facts were distinguishable. 23.8. A judgement is authority on what it decides, but not what is discussed. In the case of Kaptan s Enterprises (AIR-1986-Delhi-221), Delhi High Court discussed points No.(i) and (ii) of paragraph 10, but the High Court did not decide the points. There is not concrete and conclusive findings on the points in the judgement. Further, in paragraph 11, the Court came to a finding that the Writ Petition was premature. The High Court also proceeded on the basis of assumption as indicated in paragraph 11 of that judgement. That judgement is not binding for the following reasons:- (a) There was no test report before the High Court; (b) Court has not considered the Dictionary meaning; (c) Court has not considered Customs Tariff Entry and B.T.N. Entry; (d) Court did not consider the nature of O.G.L. 1/83, particularly with reference to different conditions and res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearance as contended by Shri Ghosh. The crucial date was 15-4-1983; what happened after 15-4-1983 was immaterial. Prohibition etc. referred to in paragraph 42 of Appendix-10 means other prohibitions, such as under Section 11 of the Customs Act, 1962, Section 13 of the Foreign Exchange Regulation Act, 1973 and Section 10 of the Drugs and Cosmetic Act, etc. 24. Shri Nankani submitted a written note in reply to the arguments of Shri Ghosh, with a copy to the opposite side. The written note contained the following points argued by Shri Ghosh and Shri Nankani s reply thereto:- 24.1. Point No. 1:- That the description given at Sl.No.50 of Appendix-4, viz. Palm Fatty Acid is generic and covers Palm Stearin Fatty Acid and therefore, the import of Palm Stearin Fatty Acid is not permissible under Open General Licence by virtue of para 240(e) of Import-Export Policy for 1983-84, prior to 11-11-1983. REPLY:- (a) Palm Oil, Palm Stearin and Palmolein are three different things. The respondent has admitted that each of these three different things give rise to respective fatty acid. (b) The fact that palm oil fatty acid, palm stearin fatty acid and palm olein fatty acid are thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spital equipment. (h) In any event, the meaning of the term fatty acid as given in the aforesaid Dictionary does not even suggest that the palm (oil) fatty acid is the same as palm stearin fatty acid. Even the respondent is not saying that palm fatty acid is the same as palm stearin fatty acid. The only reasoning of the respondent is that the source of palm stearin fatty acid is palm. This reasoning is fallacious and untenable for the reasons stated earlier. (i) The respondent has, in para 12.5 on page 13 of his impugned order, admitted that None of the literatures available on the subject draw any distinction between palm stearin fatty acid as different from palm fatty acid . In the premises, trade parlance ought to be considered in the instant case. (j) Neither the schedule to the Customs Tariff Act nor much less the B.T.N. (which otherwise has only persuasive effect in interpreting CTA itself) can be used to interpret the entries in the Appendices of the Import Policy. In this connection, judgment reported in 1983 E.L.T. 1154 (Allied Enterprises v. Collector of Customs) may be referred to. For the same reasons Head Note to the Schedule to the Imports (Control) Order, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods in question are covered by the description Palm Fatty Acid. (v) Opinion of the Chemical Examiner is irrelevant for the purposes of construing the description in the import policy particularly when Palm Stearin Fatty Acid and Palm Fatty Acid are commercially different and known as two different items by the people in trade and consumers. This fact is recognised by the STC as well as Government of India in exemption notification. (f) The reliance by the respondent on the judgment of the Hon ble Madras High Court reported in AIR-1975-Mad-217 is totally irrelevant 24.3. Point No. 3 :- That there are three intrinsic instances in the ITC Order No. 1/83 dated 15-4-1983 to show that the same is not static and is subject to the import policy and therefore, the amendments brought about by way of ITC Public Notice No. 47/83 dated 11-11-1983 would not entitle the appellants to import palm stearin fatty acid under Open General Licence even after 11-11-1983, Reply :- (a) The contention of the respondent is unsustainable and unjustifiable in law for the following reasons:- (i) It has been held by the Hon ble Delhi High Court in Kapfan s case (AIR-1986-Delhi-221) that if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licy in force as on 15-4-1983 since the ITC Order 1/83 being an Open General Licence is governed by the Policy as on the date of its issue, i.e. 15-4-1983. On this point the judgment of Calcutta High Court in the case of Mangla Brothers v. Collector of Customs reported in AIR-1985-Cal.-122 (paras 14 15 of the judgment) is relied upon. (vi) If the intention of the policy makers would be to subject the ITC Order 1/83 to every amendment of the import policy then the language used against the Serial No.16 of Part III would perhaps read as .....in terms of import policy in force as amended from time to time.... or any other like expression. In the absence of such an expression, only the well settled legal proposition that a licence is governed by the policy as on the date of its issue and not affected by subsequent amendment is substainable. : (c) Para 42 of Appendix-10 of AM 83-84 Policy Book (page 153-thereof) does not apply in the instant case as the same is not contained in ITC Order 1/83 under which the appellants are claiming the right to import stearin fatty acid. Since the import policy has no statutory force as held by the Supreme Court in the case of East India Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Liberty Oil Mills v. Union of India, reported in AIR-1984-SC-1271 is totally out of context. The issue in that case was whether abeyance notice issued by the Import Control Authorities was sustainable in law. The Hon ble Supreme Court did not express any views on the merits of the case. This is evident from reading of para 27 of the judgment at page 1290 of AIR. (i). There is no dispute as to how an Import Policy is to be interpreted. The appellants contention is that by virtue of permission under ITC Order 1/83 a right is given to them for importing items under Open General Licence upto 31st March, 1984 or as actual users upto 30th June, 1984 and the same cannot be taken away by a Public Notice. Hence the judgment reported in AIR-1957-SC-478, AIR-1961-SC-1514 and AIR-1980-SC-1149 cited by the respondent are not relevant to the issue in question. 24.4. Point No. 4:- That since several submissions which were now canvassed on behalf of the respondent before this Tribunal were not argued before the Hon ble Delhi High Court in the case of Kaptan s Enterprises (AIR-1986-Delhi-221), the same does not have any binding effect: REPLY : (a) The new arguments or submissions ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29-D(1) of the Customs Act, the Central Board of Excise Customs may call for and examine the records of any proceedings in which a Collector of Customs, as an adjudicating authority, has passed any decision or order under the Customs Act, for the purpose of satisfying itself as to the legality or propriety of any such decision or order. According to the definition in Section 2(1) of the Customs Act, Adjudicating authority means any authority competent to pass any order or decision under this Act; but does not include the Board, Collector (Appeals) or Appellate Tribunal. In this case, the order dated 17-11-1983 was passed by the Collector of Customs and not by the Collector (Appeals). Now, the question is whether the Collector of Customs passed the order in his capacity as an executive authority or as an adjudicating authority. The Collector of Customs exercises the power of quasi-judicial authority and in that capacity he has to act judicially. In the present case the Collector of Customs made investigations to determine whether the imported Stearin Fatty Acid fell within the term Palm Fatty Acid appearing against Sl. No.50 ofAppendtx 4 of the Import Policy for 1983-84, exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arily negatives the order being judicial. On the other hand, in M/s. East Jamuria Company Pvt. Limited, Calcutta v. Collector of Customs, Calcutta (1978-T.L.R-1693) it was held by Calcutta High Court that the orders permitting clearance of goods were judicial or quasi-judicial orders. 28. As regards the second ground of Shri Nankani that an order of caution is not an appealable order, our considered view is that all orders of caution are not non-appealable. Whether an order of caution is appealable or not will depend upon whether the order is an adjudication order; in other words, whether the order has been passed as an adjudicating-authority. It depends on the facts and circumstances of each case. In the case of T.G. Merchant, the Additional Collector of Customs himself stated that his order was an executive order and hence it was not appealable. We, on the other hand, considering the facts and circumstances of the present case, have held that the order dated 17-11-1983 of the Collector of Customs was an adjudication order. As a result, the decision reported in 1984 (16) E.L.T. 269 is not applicable in the facts and circumstances of the present case. 29. In the light of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Public Notice No.47/83 dated 11-11-1983. Shri Ghosh, appearing for the Deptt. has argued on the-same line and has said that the fatty acid extracted either directly or indirectly from palm oil is palm fatty acid. He has referred to the definition in the Chambers Dictionary of Science and Technology and has pleaded that the goods imported by the appellants No.2 to 10 fell within the said definition. He has also referred to B.T.N. Heading 15.10 and Customs Tariff Heading No. 15.08/13 both of which covered, inter alia, fatty acid . He has further argued that the test reports of the samples drawn from the consignments of the imported goods are important to determine the nomenclature for the Import Trade Control classification. He has contended that the test reports were not challenged by the appellants by filing an application for re-testing and as a result, the authorities were justified in proceeding to act on the basis of the said test reports as held by Madras High Court in the case of Ramalinga Choodannbalwi Mills Ltd. v. Government of India and Others (AIR 1975 Madras-217). He has also pleaded that the appellants did not challenge the inference drawn by the Collector from Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not a fact that the appellants did not challenge the test reports. We find from paragraph 10(h) of the Order-in-original passed by the Collector in-the case covered by Appeal No.C-24/85-Cal; that the appellants challenged the correctness of the test reports. In this connection, we would like to re-produce the said paragraph, which is as follows : (h) It is stated that there is no literature with the Customs Authorities to distinguish between fetty acids derived from palm oil and fatty acids derived from stearin. Despite this it is stated in the report of the chemical examiner that the samples under reference is palm fatty acid derived from palm oil. The above conclusion is neither logical nor reasonable nor it is based on the very report of the chemical examiner. 34. The Collector s findings are in paragraphs 12.1 to 12.6 and 19 of Order-in-original in the case covered by Appeal No.C-24/85-Cal and in paragraphs 13.1 to 13.6 and 14 of Orders-in-original in the cases covered by Appeals at serials No.(3) to (10). In his findings, the Collector has not discussed the test reports and he has not commented on the appellants objection on the test reports. He has not even re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1975 Mad-217 is totally irrelevant in the present cases. 35. The text of the Chemical Examiner s Note dated 28-6-1984 is as follows:- The sample under reference has a pronounced odour of palm oil and responds to colour test for palm oil indicating it to be a product of palm oil origin. In the standard literature available here the physics chemical constants for the mixed acids derived from palm oil/palm stearin have not been mentioned for their categorical characterisation. However, the observed iodine value of the sample under reference falls within the range for palm oil as mentioned in the Poram Brochure, and in other literature. The titre value of the sample under reference also falls within the range mentioned for palm oil. From the analytical findings on the sample under reference, I am therefore of the opinion that the sample under reference is palm fatty acids derived from palm oil. 36. The note of the Chemical Examiner is vague. It does not give the details of analytical results found on test of the samples. It does not mention the exact colour of the samples and the extent of iodine value and titre value found in the samples. The note says that in the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Technology. This definition does not help us in resolving the issue in dispute as it does not say whether palm stearin fatty acid is included in the term Palm fatty acid or whether both are one and the same thing. It is not disputed that the imported item is fatty acid, but the appellants have contended that palm stearin fatty acid imported by them is different from the Palm fatty acid appearing at serial No. 50 of Appendix 4. There are several judgments of Supreme Court in which it has been laid down that for determining the meaning of an article resort is to be had to its common meaning, i.e. meaning attached to it by the people in the trade and commerce and not to the-scientific or technical meaning thereof. In AIR-1967-SC-1454 (The Commissioner of Sales-Tax, Madhya Pradesh, Indore v. Jessant Singh Charan Singh it was held by the Hon ble Supreme Court trial It is how well settled that while Interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense . In AIR-1981-SC-107 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e subject, generally treat and understand them in the usual course Technical and-Scientific tests offer guidance only within the limits. Once the articles are in circulation and come to be described and known in common parlance, we then see no difficulty for statutory classification under a particular entry . Following the judgments of Hon ble Supreme Court in M/s. Indo International Industries v. Commissioner of Sales Tax, Uttar Pradesh, M/s. Rathi Khandsari Udyog etc. v. State of U.P. and Dunlop India Ltd. v. Union of India and Others, Bombay High Court in the case of Union of India and Others v. The Century Spg. and Manufacturing Co. Ltd. reported in 1985 (21) E.LT. 668 (Bombay) has also expressed the similar view. 39. In the adjudication orders, the Collector has stated that None of the literatures available on the subject draws any distinction between palm stearin fatty acid as different from palm fatty acid . In the first sentence of the penultimate paragraph of his order dated 17-11-1983, which is the subject matter of appeal No.C-152/84-Cal the Collector observed: In order to find out whether palm fatty acid and palm stearin fatty acid are same or not, it would have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Import Policy. The above clarifications were given by the Directorate General of Technical Development on reference made by the aforesaid two firms. These are clarifications given by the competent authority as prescribed by the Government and the Department has not produced any evidence before us to disprove the authenticity of the same. The Directorate General of Technical Development has very categorically stated that stearin fatty acid was under O.G.L as per Import Policy for 1983-84, Appendix 10(1). Jt. Chief Controller of Import and Exports, Office of the Chief Controller of Imports and Exports, Ministry of Commerce, New Delhi in his letter dated 21-11-1984, as mentioned in sub-para (xii) of para 11 of this order, has mentioned that import of palm stearin fatty acid was canalised vide Public Notice No.47/ITC(PN)/83 dated 11-11-1983 and that the request for extension of time for shipment of the same under OGL could not be acceded to. The words extension of time for shipment under OGL are very significant. Had not the palm stearin fatty acid been under OGL prior to 11-11-1983, the question of extension of time could not arise. We find from sub-paras (iii) and (iv) of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toms, Bombay have treated palm stearin fatty acid and Palm fatty acid as two separate and distinct commodities. We also find from the adjudication order of the Collector of Customs, Calcutta, cited earlier, that Cochin Custom House was allowing import of palm stearin fatty acid under OGL. It is stated in paragraph 12(b) of Delhi High Court s judgment (AIR 1986 Del. 221) that A communication dated 23-7-1983 from the Collector of Customs, Cochin to the Collector of Customs, Calcutta, explaining that regular import of Industrial Stearin Fatty Acid was being allowed to be Imported through Cochin Port.... The letter explains that this was done only after a detailed examination and laboratory tests conducted in consultation with the chemical examiner. All these clearly show that these two commodities are treated as distinct and separate items, not only by the concerned Govt. authorities, but also by those who are in the trade and commerce dealing in these commodities. State Trading Corporation is the largest trading organisation of Government. As against so many evidence and authorities produced/cited by the appellants in support of their contentions, the Department has not prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e High Court of Delhi in the case of Kaptan s Enterprises and Another v. Union of India, reported in AIR 1986 Delhi 221. The issue involved in Kaptan s case is exactly similar to that in the cases before us. There also the same commodity, the same OGL 1/83 and the same Public Notice 47/83 were involved. Exactly similar questions as before us, were decided by the Hon ble High Court in the said case. After examining the matter in details the Hon ble High Court, In para 13 of the judgment, held inter alia as follows :- We are of the opinion that petitioner s contention that the import of stearin fatty acid under OGL was permissible prior to 11-11-1983 has to be accepted For the above reasons, we are of the opinion that stearin fatty acid could have been imported by the petitioner under OGL.1/83 as it stood before the public notice dated 11-11-1983. The learned, advocates for the appellants have argued that their cases are within the four walls of this judgment and it is binding on this Tribunal. In support of their contention that this Tribunal is bound by the said judgment of Delhi High Court, they have relied upon a number of decisions, which we should discuss here. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay [1984 (18) ELT358] this Tribunal held that in the matter of interpretation of all India Statute, the Tribunal is bound by the decision of the High Court under those jurisdiction the office of the Tribunal is situated. In the absence of a decision of such a High Court, the Tribunal is required to follow the decision of any other High Court. If, however, there are conflicting decisions, the Tribunal is at liberty to follow any one of the decisions . On the issue before us, there is no judgment of any other High Court contrary to that of Delhi High Court which is reported in AIR 1986 Del. 221. According to the ratio of the above decision of the Tribunal, we are required to follow the judgment of Delhi High Court. In their judgment reported in 1985 (21) E.L.T. 410 (Delhi) in the case of J.K. Synthetics Ltd . v. Collector of Central Excise, Delhi, the Hon ble High Court of Delhi held that it would not be appropriate for any authorities under the Excise Act to take a different view from that of a High Court even if such decision has been appealed against. The judicial propriety would require the authority under the Excise Act to follow the judgment of High Court until it is reversed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt proceeded on the basis of assumption as indicated in para 11 of the judgment. He has also contended that the judgment is not binding for other reasons, which we have indicated at (a) to (e) in para 23.8 of this order. We have gone through the judgment of Delhi High Court carefully. We find that in para 10 of the judgment the Hon ble High Court has stated that Three questions arise for consideration in the Writ Petition in the light of the stand taken by the respondent in their replies and at the time of the arguments . This shows that the three questions as in para 10 of the judgment were formulated on the basis of the petitioner s contentions in the writ petition as well as the stand taken by the respondent. We also find from para 6 of the judgment that the contention of the petitioners in that case was that the goods imported by them, viz. stearin fatty acid, were permissible to be imported under OGL 1/83. From para 14 of the judgment we find that the petitioners made two points, namely, (i) Public Notice dated 11-11-1983 being an administrative circular or instruction, has no statutory force and cannot override or obliterate the right of import available to traders under OG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the issues and recording its findings although the Writ Petition may be premature. 45. Amongst the other reasons which Shri Ghosh has advocated in support of his claim that Delhi High Court s judgment is not binding, some are that there was no test report before the High Court and that the dictionary meaning of fatty acid and the Customs Tariff Entry and B.T.N. Entry have not been considered by the High Court. In view of our discussions in paragraphs 32 to 39, the reasons adduced by Shri Ghosh do not impress us at all. The next reason given by Shri Ghosh is that the Court did not consider the nature of OGL 1/83, particularly with reference to different conditions and residuary Item 16 of Part III of the Schedule to OGL 1/83 and Note (I) below Part III. The contention of Shri Ghosh is not correct. We find from the judgment that the High Court thoroughly discussed these matters in paragraphs 2, 3, 4, 5 and 8 of the judgment. In this connection, the last sub-para of para 4 in which the entry 16 of Part III of the Schedule has been discussed, is quoted below: The Schedule consists of three Parts I, II and 111 and all that we need no there is that under (Entry 16 of Part III), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 947. This statutory right could not be taken away by a non-statutory Public Notice as held in other cases by the Supreme Court, High Courts and the Customs, Excise and Gold (Control) Appellate Tribunal in their judgments/decisions reported in AIR-1966-SC-478, AIR-1986-Del-221, 1981 E.L.T. 235 (Bombay) and 1986 E.L.T. 385 (Tribunal). It was further held by the Hon ble Supreme Court In Ambika Prasad Mishra v. State of U.P. and Others (AIR 1980 SC 1762) that a decision does not lose its authority merely because it was badly argued, inadequately considered and fallaciously reasoned. Further, the main issue in Oswal Wollen Mills case was whether an order passed by Customs authorities could be reviewed by Import Control authorities, which is not the issue in the present case nor in the case of Kaptan s Enterprises. Moreover, the judgment of Punjab Haryana High Court in Oswal case has been stayed by the Supreme Court. In the circumstances, the said judgment does not affect the Delhi High Court s judgment in Kaptan s Enterprises case. Shri Ghosh s contention that Delhi High Court s judgment is not binding in view of Tribunal s findings in Atma Steels Case, 1984 (17) E.L.T. 331, is also n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... palm fatty acid and other fatty acids was canalized through the State Trading Corporation of India Limited and as such, the Appellants No. 2 to 10 were not entitled to import palm stearin fatty acid under O.G.L from 11-11-1983. In support of his argument Shri Ghosh has relied upon the judgment of Punjab and Haryana High Court in the case of Oswal Woollen Mills Limited and Another v. Union of India and Others [1984 (18) E.L.T. 694]. He has stated that palm stearin fatty acid being covered by the term Palm fatty acid , the same was covered by Item No.(v) of paragraph-10 of amended Appendix-9 of the Import Policy, 1983-84. According to the interpretation of Shri Ghosh the words all other items permitted under Open General Licence in terms of the Import Policy in force appearing against Item 16 of Part III of the Schedule to I.T.C. Order 1/83 mean Import Policy in force from time to time at the time of importation and clearance of the goods. His contention is that the entire Import Policy was engrafted in I.T.C. Order No. 1/83 dated 15-4-1983 and the Import Policy as amended by the Public Notice is deemed to have been incorporated in the I.T.C. Order No.1/83 from 11-11-1983. Steari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce has its foundation in Section 3 of the Act and in Clauses 6, 7, 8, 8A, 10B and 10C of Order and in the conditions of the licence itself. The particular condition which Mr. Dalal relied on is the condition mentioned on the face of the licence to the effect that the licence is without prejudice to the application of any other prohibition or regulation affecting the importation of goods may be in force at the time of their arrival. The prohibition or regulation referred to in this condition must necessarily mean prohibition or regulation imposed by law or having force of law. It cannot mean something done by mere change in policy or by public notice, which may or may not be published or brought to the notice of a person affected adversely. An Officer may issue such a Public Notice and keep it in his own pocket and it will still be effective as a public notice or an amendment or change in the policy but it cannot have the force of law. However, a right was acquired, and it is beyond dispute that once the licence is granted the person acquires a right, which cannot be taken away by mere executive action but such action must necessarily nave its foundation either in the said Act or Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rights conferred under the licence cannot be divested. (vi) In the case of Union of India and Others v. Anglo Afghan Agencies (AIR 1968-SC-718), the Supreme Court held as follows:- We are unable to accede to the contention that executive necessity releases the Government from honouring its solemn promises relying on which citizens have acted to their detriment. Under the Constitutional setup no person may be deprived of his right or liberty except in due course of and by authority of law. If a member of the Executive seeks to deprive the citizen of his right or liberty otherwise than in exercise of power derived from the law common or statute, the Court will be competent to and indeed would be bound to protect the rights of the aggrieved citizen. (vii). In the case of M/s. Moti Lat Padampat Sugar Mills Co.Ltd. v. State of U.P. and Others (AIR-1979-SC-621) Supreme Court discussed about the doctrine of promissory estoppel and held, inter alia, as follows: The true principle of promissory estoppel, therefore, seems to be that where one party has by his words or conduct made to the .other a clear and unequivocal promise which is intended to create legal relationship to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determine which way equity lies. It would not be enough for the Government just to say that public Interest requires that the Government should not be compelled to carry out the promise or that the public interest would suffer if the Government were required to honour it. .If the Government wants to resist the liability, it will have to disclose to the Court what are the subsequent events on account of which the Government claims to be exempt from the liability and it would be for the Court to decide whether those events are such as to render it inequitable to enforce the liability against the Government. Mere claim of change of policy would not be sufficient to exonerate the Government from the liability, the Government would have to show what precisely is the changed policy and also its reason and justification so that the Court can judge for itself which way the public interest lies and what the equity of the case demands. (viii) In the judgment reported in 1978 E.L.T. (J 375) (Connanore Spinning and Weaving Mills Ltd. v. The Collector of Customs and Central Excise, Cochin and Others) it was held by the Supreme Court that the rule-making authority has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the country but also on monetary policy, the development of agriculture and industries and even on the political policies of the country involving questions of friendship, neutrality or hostility with the other countries. In Union of India and Others v. M/s C. Daynam Co. and Others (AIR 1980 S.C. 1149 the Supreme Court, in paragraph 20 of the judgment observed: We are not inclined to stand in the way of the full operation of a policy decision by the Central Government in regard to export of silver. In the said case, M/s C. Damani Co. had entered into an agreement with State Trading Corporation for the purpose of exporting silver to foreign buyer and had made all arrangements to perform the contract. In the meanwhile the Export (Control) Fifteenth Amendment Order, 1979 came into force which imposed a complete ban on export of silver including pre-ban contracts. The agreement between the dealer and the State Trading Corporation contained an indemnity clause according to which in case the contract with foreign buyer could not be performed the dealer undertook to indemnify the State Trading Corporation. It was held that even though the contract to export silver relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 (supra). We are bound by the decisions of Supreme Court and High Courts. We cannot held a different view. This Tribunal already held a similar view in HES Limited as mentioned in para 48(v)(supra). In the case of Anglo Afghan Agencies mentioned in paragraph 49(vi), the Supreme Court has also held that a member of the executive cannot deprive the citizen of his right otherwise than in exercise of powers derived from common or statutory law. The learned Shri Ghosh has not disputed the general proposition that a Public Notice per se does not nullify the statutory law. He has stated that the position depends on the nature of licence or statutory order. According to him, the whole import policy for 1983-84 was embodies in the I.T.C. Order No.1/83, dated 15-4-1983 and the said I.T.C. Order stands amended by subsequent amendment of Import Policy by Public Notice. In support of his contention Shri Ghosh has relied upon the Punjab and Haryana High Court s decision in Oswal Woollen Mills case reported in 1984 (18) E.L.T. 694. In paragraph 45(supra) we have already distinguished the said case from the present case before us. At the cost of repetition we would again like to say that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatute is incorporated by reference into a second statute the repeal of the first statute by a third statute does not affect the second. This was the rule applied by the judicial committee of the Privy Council in Secretary of State for India v. Hindustan Cooperative Insurance Society Limited, 58 Ind. App 259: (AIR 1931 P.C. 149). The Judicial Committee pointed out in that case that the provisions of Land Acquisition Act, 1894 having been incorporated in the Calcutta I improvement Trust Act, 1911 and become an integral part of it, the subsequent amendment of the Land Acquisition Act,1894, by the additional of sub-section (2) in Section 26 had no effect on the Calcutta Improvement Trust Act, 1911 and could not be read into it. There are similar other decisions of the Supreme Court on this point. We would like to mention two of them here. In the case of Ram Sarup v. Munshi (AIR-1963-SC-553 at page 558) Supreme Court held that when an earlier Act or certain of its provisions are incorporated by reference into a later Act, the provisions so incorporated become part and parcel of the latter Act as if they had been bodily transposed into it. In Bolani Ores Ltd. v. State of Oressa ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 14-11-1983. Similarly, by I.T.C. Order No.29/83 dated 21-9-1983 issued under the said Section of the Act, Entry No. 14 of Part III of the Schedule to O.G.L Order No.1/83 dated 15-4-1983 was amended and the said amendment was published in the Public Notice No.40/83 dated 21-9-1983, vide Serial No.3 thereof. No such amending I.T.C. Order was issued in respect of stearin fatty acid. 51. In support of his argument that the words in terms of the import policy in force mean the import policy in force on 15-4-1983, Shri Nankani has relied on the judgment of Calcutta High Court in the case of Mangla Brothers v. Collector of Customs and Others, reported in AIR-1985-Cal 22, which was decided on 4-7-1984. In that judgment it was held that the licence issued during a policy period is governed by that policy as amended upto the date of issue of the licence and amendments made after the date of issue do not have any application to the licence. In this connection, paragraphs 14 and 15 of the judgments are reproduced below:- 14. The next contention which requires consideration is whether the import of the item in question is permissible having regard to the fact that under the Current ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the licences. The Board is also in agreement with the contention of the appellants that the Additional Collector was wrong in referring to the general condition subject to which import licences are issued applying prohibitions or regulations imposed under other enactments to the imports under the licence. In the facts of the case, as the restriction sought to be imposed is not under other enactments, but under the very imports(Control) Order under which the licences were issued, the Additional Collector s interpretation was wrong. The Board also finds that in the Government s Order No.28-2-1980 cited by the appellants relating to an importation to which provisions of para 210 of the Import Policy for 1978-79 applied, a view has been taken by the Government that the restriction was not applicable to the licences issued earlier and the provisions of that paragraph generally correspond to the provisions in para 222(3) of the Policy for 1980-81 relied upon by the Additional Collector. 52. In paragraphs 48(i) to (vi), 49, 50, 50.1 and 51 (supra) we have dealt with the various decisions relied upon by the learned advocates for the appellants and the respondent in support of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the Supreme Court reported in AIR-1980-SC-1149 (M/s C. Damani Co. v. Union of India and Others) Shri Ghosh has made a plea that if the contract is frustrated due to change of law, then each party is discharged of its liability under the Contract and there is no question of damage. Therefore, in our opinion, the plea of the promissory estoppel as made by Shri Badsha and Shri Ghosh is not on a strong footing. We, however, have already upheld the appellants right to import on a different ground. 54. Shri Ghosh has tried to distinguish the case of East India Commercial Co.Ltd. on the ground that the Notifications in the said case did not contain any reference to I.T.C. Policy nor the policy was embodied therein. On the same ground, he has also tried to distinguish the case of HES Ltd. v. Collector of Customs, Bombay in the case of East India Commercial Co. the Supreme Court held that a Public Notice was not a statutory order. This case was cited by the learned advocates for the appellants as an authority in support of their argument that the Public Notice 47/83 had no statutory force. The fact that the Notifications No.23/ITC/43 and No.2/ITC/48 in that case did not contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid down therein. In the judgments reported in AIR 1967 S.C.1454, AIR 1972 S.C.2551, AIR 1976 S.C. 221, AIR 1977 S.C. 597, AIR-1981-SC-1079, AIR-1985-SC-679 and 1985 (21) E.L.T. 668 (Bombay), the Supreme Court and Bombay High Court laid down the ratio that in interpreting the items in the fiscal statutes resort should be had not to the scientific or technical meaning of such terms, but to the trade parlance. These judgments have been, cited by the appellants for this ratio in support of their contention that the question whether palm stearin satty acid is a separate commodity distinct from palm fatty acid should be decided on the basis of trade parlance. In AIR-1966-SC-478, AIR-1968-SC-718, AIR-1986-Delhi-221, 1986 (25) E.L.T. 385 (Tribunal), 1981 E.L.T. 235 (Bombay), a ratio has been laid down that a non-statutory Public Notice cannot over-ride a statutory order. The appellants relied upon this ratio to sustain their contention that the Public Notice 47/83, being non-statutory, could not over-ride I.T.C. Order No.1/83. In AIR-1979-SC-621, 1978 E.L.T. (J 375) (SC) AIR-1971-3C-704, and 1984-ECR-30 i (Tribunal), the ratio laid down was that a Public Notice could not have retrospe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 983-84, could be imported under Open General Licence in terms of I.T.C.. Order No.1/83 Condition No.1 of the I.T.C. Order also lays down that items to be imported are not covered by Appendices No.3, 4, 5, 6, 7, 8, 9 and 15 of the Import and Export Policy 1983-84 (Volume-1) . The department has heavily relied upon paragraph 240(e) in Chapter-22 of the Import Policy 1983-84 in support of the contention that palm fatty acid was generic description and as such, in view of the provisions of this paragraph stearin fatty acid could be covered by the description palm fatty acid. We have already dealt with this point in this order earlier and as such, further discussion is not considered necessary here. 56. Condition No.26 of the I.T.C. Order is very important so far as the present cases are concerned. According to this condition, the goods could be shipped to India on or before 31 3.1984. In case of actual user (Industrial) the goods could be shipped on or before 30-6-1984 against firm order for which irrevocable letter of credit was opened and established on or before 29-2-1984 without any grace period. During the hearing before us, the learned advocates for the appellants and the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised. Accordingly, the question of imposition of penalty and fine in lieu of confiscation does not arise. In this appeal, the prayer of the Department is to impose penalty and fine in lieu of confiscation. In the result, the appeal filed by the Collector in this case is dismissed. 59. In Appeal No.C-24/85-Cal. (M/s Jayant Oil Mills v. Collector of Customs, Calcutta), appellants imported palm stearin fatty acid for stock and sale. Contract was entered into with M/s Effingham Enterprises Ltd., Hongkong on 2-11-1983. The goods were shipped in three consignments on 25-3-1984, 27-3-1984 and 31-3-1984. The learned Advocates Shri Nankani and Shri Ghosh have confirmed during the hearing before us that according to condition (26) of the I.T.C. Order No.1/83 dated 15-4-1983 it was not necessary to open letter of credit in this case as the goods were shipped on or before 31st March, 1984. Paragraph 185(5) at page 54 of the Import and Export Policy for 1983-84 (Volume-1) also provided that import of O.G.L. items by Export Houses should be subject to the condition, inter alia, that the shipment of the goods should take place within the validity of the O.G.L., i.e. 31st March, 1984. In Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led. The argument of Shri Nankani that the condition of opening letter of credit by 29-2-1984 is deemed to have been complied with, does not impress us as the condition 26 of the I.T.C. Order was mandatory and the same cannot be waived. Importation of the goods under OGL in these two cases, was, therefore, unauthorised. 61. In Appeals No.C-83/85-Cal (M/s Overseas Processors Pvt. Ltd.), No.C-84/85-Cal (M/s Oswal Soaps Allied Industries (P) Ltd) and No.C-85/85-Cal. (M/s Shahji International Pvt. Ltd.) the appellants are actual users. They entered into contracts with M/s Indo European Food Ltd., U.K. on 25-10-1983, 26-10-1983 and 15-10-1983 respectively for import of palm stearin fatty acid for manufacturing soap. The goods of M/s Overseas Processors were shipped during the period from 26-6-1984 to 30-6-1984, The goods of M/s Oswal Soaps Allied Industries were shipped on 26-6-1984, while the goods imported by M/s Shahji International were shipped on 9-6-1984 and 28-6-1984. In these three appeals, the contracts were entered before 11-11-1983 and the shipments were also effected before 30.6,1984, but the appellants could not open letter of credit by 29-2-1984 as their bank refused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The Collector has not followed any uniformity In the quantum of redemption fine and penalty. He has not given any reason for such variation. In support of their arguments, learned Advocates have cited the following judgments regarding penalty and redemption fine, viz. AIR-1970 S.C. 253, AIR-1980-S.C. 346, 1986 (9) E.C.C.374 (Cal.), 1984 E.C.R.886 (Bombay), 1984 (18) E.LT 533 (CEGAT), and Order No. 596-A/1981 dated 21-9-1981 passed by Central Board of Excise and Customs in the case of M/s Kamani Oil Industries. 65. The learned Advocate for the respondent has stated that in imposing redemption fine the Collector has adopted formula of market price minus duty minus C.I.F. value. He has also stated that the Collector has taken a lenient view by keeping fine and penalty on the lower side and not imposing maximum fine and penalty permissible under the Customs Act. 66. The appellants have relied upon a few judgments in support of their contention against imposition of fine and penalty. It is necessary to examine their applicability in the facts and circumstances of the present cases. In the case of Shama Engine Valves Ltd., Bombay v. Collector of Customs,. Bombay, reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aware that in case of shipment of the goods after 31-3-1984 opening of letter of credit on or before 29-2-1984 against a firm contract was a mandatory requirement under condition (26) of the I.T.C. Order 1/83 and non-fulfilment of this condition would render the importation unauthorised and the goods liable for confiscation under Section 111 (d) of the Customs Act and would also make them liable to penalty under Section 112 of that Act. Knowing this position, the appellants should have tried to procure their requirements of Stearin Fatty Acid from the State Trading Corporation, but instead, they chose to import the goods directly in contravention of the provisions of the Imports Exports (Control) Act. The unauthorised importation by these seven appellants was, therefore deliberate. The plea of past practice is also misconceived. No materials have been placed before us to show that clearance of stearin fatty acid under OGL was allowed in the past even though the conditions of OGL were not fulfilled. If there was any instance of past clearance where the condition of OGL was not fulfilled, but still clearance was allowed, then only the appellants herein could take the plea of past p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the actual assessable value and the duty actually paid. We have, therefore, applied 15% ad valorem to the C.I.F. value to ascertain the approximate amount of duty and the amount comes to ₹ 3,64,210.27. Total C.I.F. value and customs duty taken together, therefore, come to ₹ 27,92,945.00 approximately. From the copies of the State Trading Corporation s telegram to Asiatic Soap Co., Calcutta submitted in the paper book tiled before us, we find that the S.T.C. quoted the ex-jetty sale price of palm stearin fatty acid at ₹ 9584/- per Metric Ton. Calculating at this price, we find that the market price of 499.240 M/Tons comes to ₹ 47,84.716.00 (approximately). If the C.I.F. value and duty are deducted from this amount, the margin of profit comes to ₹ 19,91,770.00 (approximately). Therefore, even after paying the redemption fine of ₹ 4,45,000/- and penalty of ₹ 3,73,000/-, the appellants are left with a net gain of ₹ 11,73,770.00 (approximately). This is a broad calculation based on the declared C.I.F. value as, in the absence of bill of entry, we could not get the actual assessable value and duty paid. Actual amounts of duty paid will diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Badsha stated that duty was assessed at 100% ad valorem. The total of C.I.F. value and duty, therefore, come to ₹ 1,90,40,893.00 (approximately). This leaves a margin of profit of ₹ 46,68,350.00 (approximately). If redemption fine of ₹ 20 lakhs and penalty of ₹ 3,20,000/- are deducted from this amount, the net gain would come to ₹ 23,48,350/-(approximately). 72. In Appeal No.C-90/85-Cal, the weight of the goods imported was 199.985 Metric Tonnes. The market price at the rate of ₹ 9,584/- per M/Ton on this quantity comes to ₹ 19,16,656.00 (approximately). The declared C.I.F. value of the goods is ₹ 14,22,015.00. From the photo copy of the bill of entry submitted before us, we find that ₹ 2,15,435.29 was actually paid as customs duty. Therefore, total of C.I.F. value and duty comes to ₹ 16,37,450.29. The margin of profit, therefore, comes to ₹ 2,79,206.00 (approximately). In this case, the Collector has imposed redemption fine of ₹ 1,40,000/- and penalty of ₹ 14,000/- and if the amount of redemption fine and penalty are deducted from the margin of profit, appellants are still left with a profit of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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