TMI Blog1986 (1) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... f this order are as follows. 2. Petitioner No. 1 are a company incorporated under the provisions of the Companies Act, carrying on diverse business activities in the firm name and style of M/s. Jayant Oil Mills. Petitioners Nos. 2 to 7 are the directors of the petitioner No. 1-company. Petitioner No. 1 are a registered export house since last over ten years and the export house registration certificate granted in favour of petitioner No. 1 was valid up to June, 1984. Petitioner No. 1 as the registered export house was entitled to effect import in respect of the licences issued in their own names or transferred to them by others. The Import Policy relevant for the period commencing from April, 1980 to March, 1981 enabled petitioner No. 1 to secure R.E.P. licences by transfer without an endorsement or permission from any agency and the only condition imposed was that if any O.G.L. items were imported under these R.E.P. licences, then the licences were to be made non-transferable and endorsed for import of O.G.L. items by the licensing authority. Accordingly, the petitioners acquired eight R.E.P. licences and had the same made non-transferable and endorsed for the imports of raw mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken against them, their partners/proprietors for debarment. Petitioner No. 1 sent a detailed reply on July 9, 1984 pointing out various reasons why the allegation that import was invalid was incorrect and the action was not called for. Respondent No. 2, Deputy Chief Controller of Imports and Exports, thereafter passed the impugned order, dated July 12, 1984 in respect of show cause notices dated June 14, 1984 debarring the petitioners for a period of five years from importing any goods and directing that no licences or allotment of imported goods shall be granted to them. In all eleven show cause notices were issued by respondent No. 2 and all these show cause notices allege the identical violation in respect of the same goods and two show cause notices were disposed of by the impugned order, dated July 12, 1984. This order is challenged in the present petition and also the legality of the remaining nine show cause notices. The petition was admitted on September 3, 1984 and it was directed that though hearing of the remaining show cause notices can proceed no formal order should be passed thereon. It appears that prior to the date of passing of this order, on September 1, 1984 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w materials, components and spares (excluding those covered by Appendix 5) which have been placed on Open General Licence for actual users. Appendix 10 deals with imports of items under Open General Licence and sets out the categories of importers, the items allowed to be imported by them under O.G.L. and the conditions governing the importation. The first item reads as under : Items Categories of eligible importers 1. Raw materials, components and consumable (non-iron and steel items) other than those included in the Appendices 3, 5, 8, 9 and 15. Actual users (Industrial) Appendix 8 sets out the list of items, import of which is canalised through public sector agencies and item 45 is mutton tallow and the canalising agency is State Trading Corporation of India. It is not in dispute that the import of beef tallow during the months of April, 1980 and March, 1981 was permissible under O.G.L. 5. The Import Policy AM 1982, which was for the period commencing from April, 1981 till march, 1982 also permitted import of beef tallow under O.G.L. Condition 24 governing imports under O.G.L. annexed to Appendix 10, and which was Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant portion of Clause 8(f) and (g) reads as under :- 8. Power to debar from importing goods or from receiving licences or allotments of imported goods. - (1) The Central Government or the Chief Controller of Imports Exports may debar a licensee or importer or any other person from all or any of the following i.e. importing any goods or receiving licences or allotment of the imported goods through the State Trading Corporation of India, the Minerals and Metals Trading Corporation of India, or any other similar agency and direct, without prejudice to any other action that may be taken against him in this behalf, that no licence or allotment of imported goods shall be granted to him and he shall not be permitted to import any goods for a specified period under this Order :- (f) if he fails to comply with or contravenes or attempts to contravene or abets the contravention of any conditions embodied in, or accompanying, a licence or an application for a licence; or (g) if he commits a breach of any law (including any rule, order or regulation) relating to customs or the import and export of goods or foreign exchange; or" The government of the charge is that after June 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay, unless specifically provided by the subsequent amendment. Shri Desai further submitted that reliance by respondent No. 2 on paragraph 222(3) and condition 24-of the Appendix 10 of the Import Policy of the year 1981-82 was entirely misconceived. It was further contended that in any event there was no wilful disobedience on the part of the petitioners, and therefore, there was no occasion to pass orders in exercise of powers under clause 8 of the Import (Control) Order, 1955. Shri Desai further submitted that respondent No. 2 in his over enthusiasm has proceeded to pass orders even against the directors of petitioner No. 1, even when show cause notices were not served on them. Finally the learned counsel urged that even assuming that the petitioners are guilty of contravention, the quantum of punishment imposed by respondent No. 2 is totally disproportionate to the alleged violation. Shri Dhanuka, learned counsel appearing on behalf of the respondents, on the other hand, urged that once an item is canalised, then it cannot be imported as an O.G.L. item except by canalising agency. The learned counsel urged that after June 5, 1981 beef tallow was a canalised item and under Chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period during which the licence has been issued, or any amendments thereof made up to, and including the date of issue of the licence, unless otherwise specified. Relying on this clause, Shri Desai urged that the improbability under the licence was governed by the Import Policy prevailing on the date of issue of licence and as beef tallow could be imported under O.G.L. at the time of issuance of the licence, it is not open for the respondents to claim that the import could not be effected subsequent 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. 10. The first decision to which reference was made is one given by Central Board of Excise and Customs on December 23, 1981 in the case of M/s. Arvind Exports Private Limited. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only that it became canalised. In the public notices there is no specific provision invalidating licence previously issued so far as beef tallow is concerned, in case such licences were valid earlier to import this item. In the absence of any specific prohibition the licence produced by the importer in this case had to be accepted for the clearance of beef tallow. The decision of the Board is correct in law." 11. There is one more decision of the Central Board of Excise and Customs delivered on May 3, 1982 supporting the claim of the petitioners and this decision is in the case of Jayant Oil Mills Private Limited. In this case also the beef tallow imported by Jayant Oil Mills Pvt. Ltd. was confiscated by the Collector of Customs, Ahmedabad under Section 111(d) of the Customs Act and in appeal that order was set aside. The Central Board relied upon its earlier decision and also the order of the Government of India passed in the review petition and to which reference is made hereinabove. Shri Desai submits that it is the consistent view of the Government of India and the Central Board of Excise and Customs that the improbability must be determined with reference to the date of iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly imported. Shri Dhanuka desired to suggest that this condition provides that if there is any prohibition, restriction or regulation for import of goods on the date of importation, then it must be given effect to irrespective of whether the restriction is put by policy itself or by any other statute or rules. It is not possible to accept the submission of the learned counsel. Condition No. 24 uses specific words of any other prohibition or regulation affecting import thereof" and in my judgment, the expression other clearly indicates that the restriction or prohibition must be dehors the import policy. The construction suggested by Shri Dhanuka would do violence to the plain language of Condition No. 24. Shri Dhanuka also submitted with reference to paragraph 222(3) that once any item is included in Appendices 8 and 9, and the import is possible only through canalised agency, then the import under O.G.L. is not permissible, unless that right is specifically reserved as in the case of paragraph 222(3) of the Import Policy AM 198. This paragraph prescribes that the licence will cease to be valid for import of any item which could be imported under O.G.L. during 1980-81 but is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered that the Government of India with effect from March 24, 1983 has totally banned import of beef tallow into India, and therefore, the question does not arise of any import subsequent to that date. The present show cause notices and the impugned order was passed in respect of import which was effected long prior to that date. In my judgment, respondent No. 2 was clearly in error in ignoring the earlier orders passed by the Government of India and the Central Board of Excise and Customs. Respondent No. 2 was also clearly in error in relying upon condition No. 24 of Appendix 10 and contents of paragraph 222(3) to hold that the petitioners have contravened provisions of sub-clauses (f) and (g) of clause 8 of the Imports (Control) Order, 1955. The impugned order passed by respondent No. 2 is clearly unsustainable and deserves to be quashed. 13. It is really not necessary to consider the other submissions of Shri Desai that there was no wilful disobedience on the part of the petitioners and the punishment imposed is disproportionate to the alleged violation, in view of my finding that the petitioners were not guilty of violation of any of the provisions of clause 8 of the Import (C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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