1990 (11) TMI 145 - SUPREME COURT

Whether Palm Kernel at the relevant time could be imported under OGL as done by the appellant or it could not be done as the same was canalised item which could have been imported through STC or Hindustan Vegetables Oil Corp., New Delhi ?

What duty could be imposed in the facts and circumstances of the present case?

Held that:- Since `Palm Kernel' was not included within `Palm seed' the Customs authorities had no legal justification to confiscate or impose redemption fine, or penalty, as the goods had already been shipped on various dates i.e. on 26-5-1987 and 25-7-1987. It is no longer in dispute that if the Palm Kernel was not a canalised item before 27-7-1987 then it could have been imported under OGL before that date. The crucial dates in this regard are 26-5-1987 and 25-7-1987 when the goods were actually loaded in the ship and not the date of arrival of the ship in the territorial waters of India.

The High Court has overlooked that on 15-10-1987 the petitioner had only applied for warehousing of the goods on the direction of Division Bench of High Court. The Single Judge had passed an interim order for clearing the goods after payment of customs duty, but the department went in appeal and the Division Bench by its order dated 18-9-1987 directed the imported goods to be kept in a bonded warehouse or any other warehouse approved by the Customs authorities and until further orders the appellant was directed not to take delivery of the same. The appellant submitted the bills of entry on 28-1-1988 and admittedly no duty was payable on that date. Moreover where goods imported are kept in a warehouse under a bond, the date of arrival of such goods in India is not relevant for determining the duty, therefore the High Court committed error in holding the appellant was liable to pay duty as in force on the date of arrival of goods.

There is no dispute that the remaining goods were also stored in a private warehouse and the appellant had filed the bills of entry and complied with all the required formalities for debonding and clearance of the goods on 28-1-1988, therefore the appellant was entitled to an order cancelling the licence of the private warehouse enabling it to remove the goods. There is no valid reason as to why the same procedure should not have been followed in respect of the remaining goods in respect of which the bills of entry were filed on 28-1-1988 for debonding and clearance of goods. Merely because the Officer failed to discharge his duties by making illegal demand for deposit of redemption fine, the appellant could not be held liable to pay duty. The appellant is therefore entitled to the delivery of goods without paying any duty as on 28-1-1988 no duty was payable on the goods.