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TMI Blog2017 (12) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant time manufacturers of colour televisions and other electrical items. At the relevant time, the petitioners were importing Video Tape Deck Mechanism (VTDM) and Colour Picture Tubes (CPTs) as electronic items against the additional licences issued pursuant to Import and Export policy 8891 (for short `the said policy'). Under the said policy, export houses/trading houses were eligible for additional licences for the period for which the export house/trading house certificates are valid. It was provided that items permissible will be those allowed under the policy on the date of issue of licences. At the relevant time, VDTMs and CPTs were listed as Open General Licence (for short "OGL) items. VDTMs were at Serial no.821(79) and CPTs were at Serial no.821(5) of Appendix6, List8 Part1 forming a part of the said policy. There is no dispute about the fact that both the items were listed as OGL items at the relevant time. Between the period from 2nd August 1988 to 10th March 1989, the petitioners purchased additional licences which were of the dates prior to 21st March 1989. The licences were endorsed under clause 215 of the said policy. 3. According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal"). By order dated 10th November 1997, the Appellate Tribunal disposed of the appeal on the ground that this Court was seized of the matter. By carrying out amendment, the Order in Original dated 30th April 1992 was permitted to be challenged and accordingly, additional grounds were added and prayer (aa) was added for incorporating a challenge to the order Dated 30th April 1992. Only other substantive relief claimed in this petition is prayer (a) enjoining the respondents to allow clearance of the goods imported by the petitioners against the additional licences the copies of which have been annexed as Exhibits A and B to the petition. 4. There is a reply dated 6th January 2003 filed by Shri Bachan Singh, Assistant Commissioner of Customs, Group VB, Mumbai. In the reply, reliance was placed on the said public notice by which the category of goods subject matter of the Writ Petition was transferred from the list of OGL items to the list of restricted items. It was contended that the imports in question were made by the petitioners after the date of the said public notice and therefore, they were not entitled to import the goods under the additional licences. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied to the licences issued prior to date of public notices. He submitted that the import licences are governed by the policy prevailing when the licences are issued and the same are not governed by the subsequent changes in the policy. He submitted that the policy on the date of licences will apply to the imports and not the policy on the date of import. He would, therefore, submit that the action of not clearing the goods is illegal and the Orders in Original are illegal. 8 The learned counsel for the respondents opposed the petition. He invited our attention to the decision of the Apex Court in the case of the Collector of Custom (Bombay) vs. Elephanta Oil and Industries 2003 (152) ELT 257 (S.C.). He also relied upon a decision of the Apex Court in the case of Union of India vs. Godrej Soaps Pvt Ltd 1986(26) ELT 465 (SC). He also pointed out the law laid down in the case of Darshan Oils Pvt Ltd vs. Union of India 1995(75)ELT 32 (SC). 9 We have given careful consideration to the submissions. Firstly, we must make a reference to the said policy. Clause 61 of the said policy deals with Open General Licence (OGL). Clause 61 reads thus: "Open General Licence 61. 1) Appendix 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licences will be calculated at 10% of the NFE earnings on the total eligible exports made in the proceeding licensing year. This percentage shall be 12% in cases where an Export Trading House is able to achieve a minimum growth of 10% in terms of NFE realisation in the previous year, over and above the year preceding the same. The NFE earnings for this purpose, would have the same meaning as defined in the Note below Para 212 (2)(a) above. (2) The Additional Licences will be valid for the import of the following items upto the full value of the licence : (i) Items appearing in Part 1 of List 8, Appendix 6 of this Policy; and (ii) Import of capital goods listed in Appendix 1 Part B of this Policy. (3)... (4)... (5)... (6)... (7)... (8) Export Houses/Trading Houses will be eligible for Additional Licences for the period(s) for which the Export House/Training House Certificates are valid. However, the items permissible will be those as allowed under the Policy on the date of issue of the licence (s). It may not, therefore, be necessary for an applicant Export House/Trading House to hold a valid Export House/Trading House Certificate at the time of submission of the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tains number of items allowed for import under OGL by various categories of importers. The export houses/trading houses are entitled to additional licenses for the import of items appearing in Part 1 of the List 8 of the Appendix 6 of the said policy. Additional licence can be granted only to export houses/trading houses and by virtue of grant of additional licence, the holder thereof is entitled to import OGL items specified in Part 1 of the List 8 of the Appendix 6 of the said policy. The Appendix 6 contains the items which can be imported by holders of OGL. Thus, if some item goes out of Appendix 6, the holder of additional licence cannot import the said item. The other question will be whether the said public notice will affect the existing additional licences which were valid on the date of notice. We have dealt with this question in the subsequent part of this Judgment. 14. We may also make a reference at this stage to the subsequent policy (for the years 199093). Clauses 223 and 224 are relevant for our consideration. Clause 1 of paragraph 223 lays down that additional licences issued to export houses/trading houses prior to 1st April 1990 on the basis of the exports m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvanced by learned Counsel for the appellants: (1) The import policy of which year would be applicable to the facts of the present case - the period during which the licences were issued or the time when import actually took place. (2) Whether "coconut oil" appearing in para 5 of Appendix 9 of the Import Policy of 1980-81 was confined to the edible variety or covered the individual (sic-industrial) variety. (3) Whether in the face of the decision of the Board and Central Government as the statutory appellate and revisional authorities, it was open to the Collector functioning in lower tier to take a contrary view of the matter in exercise of quasi-judicial jurisdiction; and (4) Whether the order of the Collector was vitiated for breach of rules of natural justice, and collateral considerations in the making of the orders. It is not in dispute that the relevant import policy to be referred to is of the year 1980-81 as all the licences were issued during that period. The Collector found and the High Court has not recorded a different finding that when the licence was first revalidated on 18-1-1982, such revalidation was subject to paragraph 215 of the Import Policy of 1981-82. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the licence was issued and the said notice had no retrospective operation. In paragraph 5 and 6, the Apex Court observed thus: "5. Interrupting the narrative, it is necessary to point out at this stage two important matters: (1) that the difference in the conditions of the two licences was apparently not noticed by the Collector of Customs and by the Board and (2) that the condition that the goods should be of "prime quality" was not a condition of either licence. Under the first licence the sheets were to be of 18 gauge quality; under the second licence there was no such condition relating to thickness of the sheets. There was again no evidence that any part of the consignment was not fit for use in the manufacture of drums and barrels. By importing sheets of 11, 12 and 13 gauge or of gauges varying between 18 and 24 no breach of the conditions of the second licence was committed. The condition that the sheets imported must be of "prime quality" was imposed for the first time by the Iron and Steel Controller's Public Notice No.I/I-S/62, dated December 6, 1962 and could not obviously apply to the sheets imported under the two licences which were issued earlier. But the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tices cannot govern the applications which were made and rejected prior to coming into operation of the new policy. 18. Reliance was also placed on the decision of the learned Single Judge of this Court in the case of Jayant Vegoils And Chemical (P) Limited vs. Union of India 1987 (30) E.L.T. 134 (Bom.). In this case, import licences were issued on the basis of the policy for the period of April 1980 to March 1981. Show cause notices were issued to the petitioner in respect of the eight licences granted during the subsistence of the said policy of 198081. Licences were in respect of beef tallow. In the show cause notice, it was alleged that the licences were not valid for the import of beef tallow. A public notice was issued on 5th June 1981 as a result of which beef tallow could not be imported thereafter under OGL, but only through a canalising agency. The contention of the Revenue was that after 5th June 1981, on the basis of the licence granted earlier, import of beef tallow was not permissible. The learned Single Judge observed in paragraph 6 as under: "The gravemen of the charge is that after June 5, 1981 the petitioners were not entitled to import beef tallow as the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uent to June 5, 1981. As mentioned hereinabove, it is not in dispute that the public notice dated June 5, 1981 did not specify that the inclusion of beef tallow as a canalised item would affect the licence granted prior to that date. Shri Desai then submits that not only this position is very clear by the plain reading of the licence and the Import Policy, but the Central Board of Excise and Customs and the Government of India have consistently taken that view. The submissions of the learned counsel is correct. " (emphasis added) Thereafter, the learned Judge proceeded to hold thus: "It is futile for the respondents to suggest that as soon as the policy was amended on June 5, 1981 the import of beef tallow would be prohibited under the licences issued during 1980-81 unless firm commitments made by opening irrevocable letters of credit are established prior to April 1, 1981. .........Shri Dhanuka is right in his submission that once the item is included in Appendices 8 and 9, then it is not permissible for the licence holder, who has secured licence subsequent to that date, to import beef tallow, but that would not prevent the licence holder who has secured the licence prior to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich had not been "specifically banned" under the prevalent import policy. The items had to pass two tests, firstly, they should have been importable under the Import Policy 1978-79 and secondly they should also have been importable under the Import Policy 1985-88 in terms of the order dated April 18, 1985 and if one may add, in such terms "in accordance with the import rules" whether canalised or not canalised. It must be emphasised that in this case also, the court had no occasion to consider the significance of the words "whether canalised or otherwise" mentioned in the order dated April 18, 1985 because that point did not arise in the case before it. What did the court then intend by these words used by the court? We have seen that diamond exporters could import the items which they were entitled to import under the Import Policy 1978-79 provided they were importable also under the import policy ruling at the time of import. These are items which were open to import by Export Houses holding Additional Licences for sale to the Actual Users (Industrial). These are items which were directly imported, for example, items in Part 2 List 8 of Appendix 6 of Import Policy 1985-88. These ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we have indicated. If that is so, then it should be so read. When this Court observed that the fact whether items were sought to be imported by diamond merchants were canalised would not be an impediment to the import directly by them, the court meant to say that this could be imported directly by them through the canalisation organisation. The need for canalisation stands on public policy and that need cannot be lightly or inferentially given a goby. It should not be presumed that collaterally the court had done away with the system of canalisation based on sound public policy. We have found nothing in the different authorities on this subject, which militate against the above views. Therefore, the action taken by the Custom authorities in issuing adjudication notice and proceeding in the manner they did, we are of the opinion that they have not acted illegally or without jurisdiction. This must proceed in accordance with law as laid down by this Court which, in our opinion, is clear enough. The fact that in subsequent decisions, the petitioner is not a party is not relevant. Generally legal positions laid down by the court would be binding on all concerned even though some of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the decision in Raj Prakash Chemicals Limited this Court has stressed: (SCC p.77 para 21) "The items had to pass to two tests, firstly, they should have been importable under the Import Policy 197879 and secondly they should also have been importable under the Import Policy 1985, and if one may add, in such terms in accordance with the import rules, whether canalised or not canalised." This Court has gone on to emphasise: (SCC p.77, para 20) "It must be emphasised that in the order dated April 18, 1985, this Court did not do away with canalisation. That was not the issue before this Court. The expression `whether canalised or not canalised' was to include both. This Court did not say that canalised items could be imported directly by the importers ignoring the canalisation process. We are of the opinion that this Court did not say that canalisation could be ignored. That was not the issue. High public policy, it must be emphasised, is involved in the scheme of canalisation." 14 Shri Salve has placed reliance on the following observations of this Court in this case: (SCC p.77, para 21) "Canalised items are those items which are ordinarily open to import only through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reliefs including the directions to the Bank to open letter of credit. On 303-1983, letter of credit was actually opened. On 16-6-1983 and 1-7-1983, bills of entries for import of beef tallow were filed." In this case, the licence in question was issued on 29th June 1981 when import policy of 8182 was in force. On the basis of the public notice dated 5th June 1981, a notice was issued by the Department to the assessee. Notice was issued on the basis of the contention that after 5th June 1981 import of beef tallow was not permissible. An order of confiscation was passed by the Collector of Customs on the ground that import of beef tallow was not permissible. Accordingly, the assessee preferred an Appeal. The Tribunal held that right to import the goods under OGL is a statutory right and cannot be overruled by a public notice and that the import of beef tallow which ceased to be OGL item when it was canalized by the public notice is governed by the import policy when the licence was issued and not by the public notice. Therefore, an appeal was preferred before the Apex Court. The Apex Court allowed the Appeal after considering its decision in the case of D. Navinchandra. In pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Apex Court in the case of D. Navinchandra and Elephanta Oil and Industries is that the import will be governed by the policy in force on the date of import and not on the date on which licence was issued. The case of D. Navinchandra was decided by a Bench of three Hon'ble Judges. The decision in the case of M/s.Jain Exports is by a Bench of two Hon'ble Judges. 26. We have already referred to the subsequent policy which came into force on 1st April 1990. Sub-clauses 1 of both clauses 223 and 224 thereof provide that additional licences issued to export/trading houses prior to 1st April 1990 shall cease to be valid on or after 1st April 1990. In these petitions under Article 226 of the Constitution of India, there is no challenge to sub-clauses 1 of clause 223 and 224 of the subsequent policy. However, subclauses 2 of clauses 223 and 224 protect imports made after 1st April 1990 subject to the conditions mentioned therein. Both the clauses, provided that the restriction imposed by subclauses 1 of clauses 223 and 224 will not apply to those licence holders who have already made firm commitments by irrevocable Letters of Credit opened and established through aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench, there is a challenge to the show cause notices. The said challenge cannot be upheld and the show cause notices will have to be decided in accordance with law in light of what is held in this Judgment. 32. In Writ Petition No.3550 of 1991, there is a challenge to a similar Order in Original passed by the Collector of Customs and therefore, by setting aside the said order, the matter will have to be remanded to the Collector of Customs for fresh adjudication on the show cause notices. The same is the case with the Writ Petition Nos.3225 of 1989, 1970 of 1990, 3314 of 1990, 3315 of 1990 and 86 of 1991. 33. In Writ Petition Nos.2117, 2834, 1805 of 1990 and Writ Petition No.485 of 1992, there is no challenge to any show cause notice or any order. Only writ of mandamus is prayed. 34. Accordingly, we pass the following order: (I) Writ Petition Nos.2117, 2834 and 1805 of 1990 as well as Writ Petition No.485 of 1992 stand disposed of in terms of what is held in this Judgment. The authorities are free to issue show cause notices and pass appropriate orders thereon within a period of four months from today; (II) Writ Petition Nos.2109, 2110 and 2111 of 2002 stand disposed of by di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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