TMI Blog2017 (12) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... sed 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. 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 authorised dealers in foreign exchange on or before 31st March 1990 - the petitioners are entitled to relief in respect of the cases which are governed by the subclauses 2 of clauses 223 and 224 of the subsequent policy (199093). I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (79) and CPTs were at Serial no.821(5) of Appendix 6, List 8 Part 1 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 the case of the petitioners, between 2nd February 1990 to 26th February 1990, they opened Letters of Credit in favour of the foreign suppliers for the import of said two categories of goods. All imports were made prior to 31st March 1990. Between 1st November 1989 to 11th October 1990, the petitioners filed Bills of Entry with Sea Customs and Air Customs against the imports made from time to time of the said goods. It is their case that similar goods were cleared earlier. However, the Customs raised an objection to the validity of the additional licences. Therefore, the goods were allowed to be bonded and where goods were meant for export, re export was allowed against bond with bank guarantee. However, the goods which were meant for home clearan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms, 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 was contended that the validity of the additional licences was limited to the items which are placed under the OGL. A submission was made that the import policy prevailing at the time of public notice will be applicable. 5. The submission of the learned counsel for the petitioners is that if sub clauses 2 and 8 of clause 215 of the said policy are read together, it is clear that the additional licences were issued permitting import of OGL items appearing in Appendix 6 List 8 Part 1. Inviting our attention to the said public notice, he pointed out that VTDM and CPTs were deleted from Appendix 6 List 8 Part 1 from the date of the said public notice and that the same were included in the list of restricted items. He submitted that the public notice refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of this Policy contains a number of lists of items allowed for import under Open General Licence by various categories of importers and the conditions for their import. Open General Licence facility can be availed of by the specified categories and subject to the conditions laid down therein. In addition to the items listed in Appendix 6. Actual Users (Industrial) can import under Open General Licence raw materials, components and consumables which do not appear in Appendices 2, 3, 5 and 8 of this Policy, subject to the conditions laid down. Before effecting import of such unlisted items under Open General Licence Actual Users (Industrial) are advised to obtain confirmation from the CCI E, New Delhi that the concerned Actual User can imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )... (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 application for the Additional licences, if otherwise due. (emphasis added) 11. Thus, sub clause 1 of clause 215 lays down that the export houses/trading houses will be eligible for additional licence on the basis of the admissible exports made in the preceding licencing year. The value of the licence is to be calculated as provided in sub clause 1. As stated earlier, sub clause 2 provided that additional licences will valid for the import of the items appearing in Part1 of List 8 of Appendix 6 of the said policy. Subclause 8 provides that additional licence will be valid for the period for which the export house/trading house certificates are valid. Subclause 8 reiterates that addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 1990 93). 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 made during 1986 87 or earlier period shall cease to be valid on or after 1st April 1990 for the import of the items of raw material, components and spares which appear in Appendix 6 List 8 Part I of the said policy but which are not covered by Appendix 6 List 8 Part I of the subsequent policy. There is a similar provision made in sub clause 1 of clause 224 in respect of additional licences issued to export/trading houses prior to 1st April 1990 on the basis of the exports made during 1987 88 and 1988 89. However, subclauses 2 of both clauses 223 and 224 are relevant. Both the clauses provided that restriction imposed by sub clauses 1 of clauses 223 and 224 will not apply to those licence holders who have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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. Again while revalidating some of the licences on 25-9-1982, it was stipulated that during the extended period, items which do not appear in Appendices 5 and 7 of Import Policy of 1982-83 could not be allowed to be imported and items which appear in Appendix 26 of the Import Policy of 1982-83 will also not be allowed to be imported. The Collector turned down the plea that the licences allowed the import of items appearing in Appendices 5 and 7 of 1979-80 policy and 1982-83 policy in addition to the items appearing in the OGL and industrial coconut oil. In the instant case, the licences were either of 1980 or 1981 and were revalidated from time to time. For convenience we may refer to a sample order of revalidation dated 28-6-1982. Reval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Collector as well as the Central Board of Excise and Customs decided the cases principally on the ground that the goods were not of prime quality . The Collector of Customs and the Central Board of Excise and Customs also did not keep the facts in respect of the twelve consignments distinct and decided them together as if there was no difference between the conditions of the two licences. 6. The revision applications filed before the Government of India were consolidated for the purpose of hearing and a single order was passed. The Officer who heard the revision applications on behalf of the Central Government was of the view, and rightly, that the Public Notice No. I/I-S/62, dated December 6, 1962 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port 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 import was canalised through the State Trading Corporation. The petitioners on the other hand contend that each R.E.P. import licences were issued prior to June 5, 1981 and each of the licence contains a condition that the licence would be subject to the conditions in force relating to the goods at the time of issuance of the licence. The petitioners claim that as the public notice dated June 5, 1981 did not specifically prohibit import of beef tallow under licence granted prior to June 5, 1981, the import though was of a period subsequent to June 5, 1981, was not in contravention of any law. The petitioners claim that the Government of India and the Central Board of Excise and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 that date. As there is no specific prohibition in the public notice affecting the earlier licence holders, it is not possible to disturb their rights. (emphasis added) 19. Thus, the learned Single Judge held that such a licence will be governed by the prevailing policy when the same was issued and the subsequent notice will not affect the licence issued earlier. 20. In the case of Ashok Kumar Jain, Proprietor of M/s.Jain Brothers vs. The Union of India decided by a Division Bench of this Court, the issue was about REP licence granted on 13th February 1990 when import and export policy of April 1988 to March 1991 was in force. The argume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 are items which are not canalised. Canalised items are those items which are ordinarily open to import only through a public sector agency. Although generally these are importable through public sector agencies, it is permissible for any import policy to provide an exception to the rule and to declare that an importer might import a canalised item directly. It is in that sense and that sense only that the court could have intended to define the entitlement of diamond exporters. They would be entitled to import items which were canalised or not if the import policy prevailing at the time of import permitted them to import items falling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 them have not been made parties nor were served nor any notice of such proceedings given. (emphasis added) 22 In the decision relied upon by the learned counsel for the petitioner in the case of Prem Chand Somchand Shah vs. Union of India , the Apex Court reiterated the law laid down in the case of M/s. Navinchandra and Company (supra). Ultimately, in paragraphs 13 and 14 the Apex Court held thus: 13 Shri H.N. Salve, has, however, urged that the view of the decision of this Court in D.Navinchandra Company case the Export Houses who were granted Additional Licences under the Import and Export Policy 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 a public sector agency. Although generally these are importable through public sector agencies, it is permissible for any import policy to provide an exception to the rule and to declare that an importer might import a canalised item directly. It is in that sense and that sense only that the court could have intended to define the entitlement of diamond exporters. They would be entitled to import items which were canalised or not if the import policy prevailing under such category. This was also viewed in that light in the case of Indo Afghan Chambers of Commerce. (emphasis added) 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 paragraphs 14 and 16, the Apex Court held thus: 14. The aforesaid aspect was further considered in Darshan Oils (P) Ltd. v. Union of India [(1995) 1 SCC 345 : 1994 Supp (5) SCR 278] wherein this Court held thus: (SCC p. 348, para 8) 8. In D. Navinchandra Co. v. Union of India [(1987) 3 SCC 66 : (1987) 2 SCR 989] it was clearly held that the entitlement to import items which were canalised or not, is governed by the Import Policy prevalent at the time of import. In the present case, the import of a canalised item being made after amendment of the Pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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, sub clauses 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 sub clauses 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 authorised dealers in foreign exchange on or before 31st March 1990. It means that on the basis of the Additional licences issued prior to 1st April 1990 on exports made in 1986 87, 1987 88 and 1988 89, the imports made after 1st April 1990 will be valid notwithstanding subclauses 1 of clauses 223 and 224 provided the irrevocable Letters of Credit have been opened and established through authorised dealers in foreign Exchange prior to 1st April 1990. Therefore, wherever the Letters of Credit as aforesaid have been opened before the cut o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 directing the concerned Authority to adjudicate upon the show cause notices in the light of what we have held in this Judgment and order; (III) In rest of the writ petitions, impugned orders of the Collector of Customs are quashed and set aside and the matters are remanded to the Collector of Customs or to the Authority which is empowered to adjudicate upon the show cause notices for deciding the show cause notices afresh in the light of what is held in this Judgment and Order in accordance with law; (IV) Fresh order shall be passe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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