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TMI Blog1987 (4) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... which consisted of a bench of three judges and the subsequent decisions of this Court which we shall presently refer. It is necessary also that in order to make out a case, the petitioners have sought to emphasise on the point that the decision dated 18th April, 1985 was a decision of three learned judges, in order to spin out a case of some sort of conflict with this decision and certain subsequent decisions of this Court consisting of benches of two learned judges. It appears that the import policy issued by the Government of India for the year 1978-79 by paragraph 176 provided for additional licences. On 29th April, 1979, the first petitioner, a diamond exporter, was refused Export House Certificate. The said petitioner filed a writ petition before the High Court of Bombay being Misc. Petition No. 1293/1979. By his order and judgment, Pendse, J. made the rule absolute holding that canalised items were not banned items and there was no reason why the first petitioner should not be compelled to approach the canalising agency for import of the same. On 7th April, 1983, the Delhi High Court delivered a judgment in Civil Writ Petition No. 1501 of 1981 (which for the sake of convenien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tems) or Appendix 5 (Canalised Items). According to the petitioner, in the matter of clearance of such consignments different standards were applied by the Customs authorities. On 18th October, 1985, in special leave petition No. 11843 of 1985 - in 5. the case of Raj Prakash Chemicals Ltd. v. Union of India, this court directed that Acrylic Ester Monomers would not be permitted to be cleared until further orders unless they had already been cleared. Similarly, on 31st January, 1986, interim order was passed in the case of M/s. Indo-Afghan Chambers of Commerce v. Union of India (Writ Petition No. 199 of 1986) directing that Dry Fruits in respect of which Custom clearance had been obtained till 30th January, 1986 would be allowed to be cleared and no clearance of Dry fruits from 31st January, 1986 onwards would be made by the Custom authorities until further orders. On 5th March, 1986, judgment was delivered in the case of Raj Prakash 6. Chemicals Ltd. and Another v. Union of India and Others - 1986 (2) SCC 297 by a bench consisting of three learned judges - Tulzapurkar, J. and two of us (R.S. Pathak, J. as the Chief Justice then was, and Sabyasachi Mukharji, J.). This Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 is the list of items which could not be imported by anyone whosoever. This Court, therefore, was of the view that when regard is had to the Import Policy 1984-85, reference must necessarily be made to the corresponding Appendix 3, formerly described as the List of Banned Items and now described as the List of Limited Permissible Items, and Appendix Part A which is now the list of Banned Items replacing Appendix 4 (List of Absolutely Banned Items). In other words, said the Court, the Additional Licences to be issued to diamond exporters entitled them to import items permissible to Export Houses under such licence under the Import Policy 1978-79 excluding those items which fell within Appendices 3 and 4 of the Import Policy 1978-79 and also excluding items which fell in Appendix 3 and Appendix 2 Part A of the Import Policy 1984-85. This Court was of the view that this is the meaning which must be given to the terms of the order, dated 18th April, 1985. This Court noted that when this Court made the previous order on 18th April, 1985 when the Import Policy of 1985-88 was in force, there were only two items which were absolutely banned, and these were animal tallow and animal rennet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, the matter had been clarified and clearance of canalised items against Additional Licences was unconditionally allowed. This Court again dealt with the question in the case of M/s. Indo Afghan 12. Chambers of Commerce and Another etc. v. Union of India and Others etc. - 1986 (3)-SCC 352. In that decision two of us (R.S. Pathak, J. as the learned Chief Justice then was and Sabyasachi Mukharji, J.) were parties. It was held that under the import policy of 1978-79 dry fruits (excluding cashewnuts) could be imported by all persons under the Open General Licence. There was no need to obtain any Additional Licence for importing items in the year 1978-79 and therefore, the wrongful denial of Additional Licences to diamond exporters in the year 1978-79, could not justify any restitution subsequently in regard to the import of dry fruits (other than cashewnuts). It was further observed that under the Import Policy 1985-88, dry fruits (excluding cashewnuts and dates) were no longer open to import under the Open General Licence. The sanction for importing them must be found under some other provision of the Import Policy. The diamond exporters, it was held, could not be regarded as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this decision. This question was examined and it is necessary to refer to the said two subsequent decisions of this Court. The first one is the decision in Union of India v. Godrej Soaps Pvt. ltd. 14. and Another - 1986 (4) SCC 260 = 1986 (26) E.L.T. 465 (S.C.) and the second one is the decision in M/s. Star Diamond Co. India v. Union of India and Others - 1986 (4) SCC 246. It is necessary first to refer to Godrej Soap's case. It was held that a diamond exporter could import the items he was 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 are open to import by an Export House holding an Additional Licence for sale of eligible Actual Users (Industrial). These are items which could be directly imported, for example, the items enumerated in Part 2 of List 8 of Appendix VI of the Import Policy 1985-88. These are items which are not 'canalised'. 'Canalised' items are those items which are ordinarily open to import only through a public sector agency. There is, however, nothing to prevent an Import Policy from providing in the future that an Export House holding an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another consignment falling in Appendix 2B (List of Restricted Items) of Policy for T985-88. Personal hearing was given to the first petitioner thereafter. The petitioner moved this Court under Article 32 of the Constitution, for quashing the show cause notices, dated 21st August, 1986, 11th September, 1986 and 26th September, 1986 and the order of adjudication, dated 20th May, 1986 and for consequential relief. 19. We are, however, unable to find any merit in this application either in law or in equity. One of the points on which an argument was sought to be built up was that 20. the Bench of two judges of this Court in the subsequent decisions had cut down the effect of the decision of this Court, dated 18th April, 1985 in the case of Union of India v. Rajnikant Bros. It has been stated that in subsequent decisions referred to hereinbefore, this Court had deviated and indeed differed from the view expressed in that case. It was urged that in Rajnikant Bros. case a bench of three judges categorically stated that the respondents would be entitled "to import all other items whether canalised or otherwise" except those which were specifically banned under the prevalent import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificates and had been wrongly refused and were also importable under the import policy prevailing at the time of import which in the present case would be during the import policy of 1985-88. These were the items which had not been 'specifically banned' under the prevalent import policy. The items had to pass to 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 18th April, 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 18th April, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment was not given a go-bye by the observations referred to in the Order of 18th April, 1985. Indeed it is possible to read the Order in a manner consistent with canalisation scheme in the way 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 inferencially given a go-bye. 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 Customs 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een opened, such parties should not be penalised in the facts and circumstances of the case. No direction is necessary by this Court on this aspect. The authorities concerned will decide the same in taking into consideration all the facts and circumstances and taking into consideration the case of the petitioners and the alleged claim of bona fide on their part. A submission was made on the principle of promissory estoppel and 29. reliance was placed on the several observations of several cases including the case in Union of India and Others etc. v. Godfrey Philips India Ltd. etc. - AIR 1986 SC 806 = 1986 (22) E.L.T. 306 (SC). It is true that the doctrine of promissory estoppel is applicable against the Government in the exercise of its governmental, public or executive functions and the doctrine of executive necessity or freedom of future executive action cannot be invoked to defeat the applicability of the doctrine of promissory estoppel. But in this case no such case of promissory estoppel has been made out. The intervention applications filed in this connection are allowed and the submissions contrary to what we had stated hereinbefore are rejected. As the points i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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