TMI Blog2002 (12) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... goods and on arrival of the said goods, the Petitioners filed a Bill of Entry on 6-4-1989, seeking clearance of the said goods as OGL item, being raw material (not covered under Appendix 2, 3, 5 and 8) required for the manufacture of the drug 'Oxytetracycline Capsule'. Alternatively the Petitioners claimed clearance of the said goods as drug intermediate under the import licence bearing No. 3192069, dated 27-11-1987 which licence was acquired by the Petitioner from the market as it was free1y transferable. 4.By a show cause notice dated 24-4-1989, the Custom Authorities called upon the Petitioners to show cause as to why the said goods should not be confiscated on the ground that the said goods were covered under Sr. No. 80 of the Appendix 2B of the Import Export Policy April 1988-March 1991 ('AM 91 policy' for short) and hence could not be imported as a OGL item or as a drug intermediate. By their reply dated 26-4-1989, the Petitioners pointed out that what is covered in Sr. No. 80 of Appendix 2B is 'Oxytetracycline' whereas what is imported by the Petitioner is 'Oxytetracycline Hydrochloride', which is a totally different item. It was pointed out that whenever the Government wan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an option to redeem the goods under Section 125 of the Customs Act, 1962 by paying redemption fine of Rs. 15,000/-. Challenging the said order the present petition has been filed. 6.While admitting the above petition, this Court permitted clearance of the goods on the Petitioners furnishing a bank guarantee for Rs. 15,000/- towards redemption fine. During the pendency of the petition, the balance consignment of 9900 kgs. of the said goods were imported which were also confiscated and the Petitioners were given an option to redeem the goods on payment of redemption fine of Rs. 1,50,000/-. Challenging the said order, the Petitioners took out Notice of Motion No. 2299 of 1989 in this petition and this Court by its order dated 13-9-1989 permitted the Petitioners to clear the said goods on the Petitioners furnishing a bank guarantee for the amount of Rs. l,50,000/- in favour of the Collector of Customs, Bombay. 7.Mr. Bulchandani, learned Counsel appearing on behalf of the Petitioners brought to our notice Judgment of a learned Single Judge of this Court in the case of Climax Chemicals v. R. Gopal Nathan reported in 1991 (52) E.L.T. 186, wherein it was held that the salt of Oxytetracycl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy the entry 'Oxytetracycline referred to in Item 80 of Appendix 2B includes salts of Oxytetracycline i.e. Oxytetracycline Hydrochloride and hence the importation of the said goods was permissible only under a specific licence and not either under OGL order or under the additional licence purchased by the Petitioners. It was submitted that the salts of the items specified in Appendix 2B, could not be imported without a specific licence and hence the confiscation order with an option to redeem the goods on payment of redemption fine was justified. 10.We have heard the learned Counsel on both sides and perused the record placed before us. The decision of this Court in the case of Climax Chemicals (supra) which is relied upon by the Petitioners, in our opinion, is distinguishable on facts. In that case, on the date when .the import licence was granted on 1-10-1981 there was no bar under the AM 82-83 policy for importation of salts of Oxytetracydine. It was only during the subsistence of the licence, a public notice dated 19th April, 1982 was published on 23rd April, 2002 seeking to amend the AM 82-83 policy, to the effect that the drugs appearing in the appendices mentioned in the AM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... questions of friendship, neutrality or hostility with other countries. Therefore, even though, the OGL order is issued under Section 3 of the Imports Exports (Control) Act, 1947, the items permitted to be imported under the OGL order, is as per the economic policy decision taken by the Government. The policy decision taken by the Government regarding imports is contained in the Import Policy issued from time to time. In the instant case, even the OGL order clearly states that the raw materials permitted for import under the OGL order are those raw materials which are not covered under Appendices 2, 3, 5 and 8 of AM 91 Policy. In other words, the OGL Order 1 of 1988 clearly postulates that the items covered under Appendices 2, 3, 5 and 8 of AM 91 policy cannot be imported as OGL item under the OGL Order 1 of 1988. 12.The question then to be considered is, whether 'Oxytetracycline Hydrochloride' is covered under Entry 80 of Appendix 2B of the AM 91 policy Chapter II of the AM 91 Policy deals with General licensing matters. Para 22(4) contained in Chapter II of the AM 91 policy reads as under :- "22 (4) In the case of drugs appearing in Appendices 2 Part B, 3 Part-A and 5, the names ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e imported as OGL item which are not covered under Appendix 2B of the Import policy. In the instant case, once it is held that Oxytetracycline Hydrochloride was covered under Appendix 2B of AM 91 policy, it could not be imported by the Actual user (Industrial) as OGL item. 14.The alternative argument of the Petitioners that the goods in question could be imported as drug intermediate covered under the additional licence acquired by the Petitioners is also without any merit. In this context we may refer to the note appended at the end of Appendix 6 List 8 Part I and II of the AM 91 Policy which reads as under : It is clarified that entries in this"(1) list (Part I and II) allow only those items and their specifications, sizes, types, varieties, compositions, categories etc. as are covered under Open General Licence for actual users (Industrial) vide Items 1 and 2 of Appendix 6 i.e. the items or their specifications etc. which do not appear in Appendices 2 to 5 and 8, including those having another chemical name or synonym, but of the same nature, as any of the items covered in these appendices, read with the clarifications contained in Chapter II of this book". From the aforesaid no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t policy. The Petitioners have exercised option of redeeming the goods on payment of redemption fine and have obtained clearance of the goods under the interim orders of this Court, by furnishing bank guarantee to the extent of redemption fine levied. As we have upheld the order of confiscation, the Respondents shall be entitled to recover the amount of redemption fine with interest @ 12% p.a. from the date of clearance of the goods till date. 16.Accordingly, the petition fails. Rule stands discharged. The Respondents are at liberty to encash the bank guarantees for the sum of Rs. 1,65,000/- furnished by the Petitioners. The Petitioners shall pay to the Respondents, interest on the said sum of Rs. 1,65,000/- from the date of clearance of goods till date @ 12% p.a. by 31-12-2002. If the Petitioners fail to pay the said amount of interest by 31-12-2002, then the said amount of interest shall be recoverable from the Petitioners with interest @ 18% p.a. from 1st January, 2003 till the date of recovery. 17.The petition stands disposed of accordingly. However, there will be no order as to costs. 18.At this stage the learned Counsel appearing for the Petitioner requested to issue directio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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