Import rights under statutory OGL cannot be curtailed by later public notice; trade parlance governs commodity classification.

A statutory Open General Licence order could not be overridden or retrospectively curtailed by a later public notice, so import rights already created under OGL 1/83 remained effective unless the licence order itself was amended. The classification of stearin fatty acid was determined by commercial parlance and trade understanding, and it was held to be distinct from "palm fatty acid" and therefore permissible for import before 11-11-1983. Compliance with the OGL conditions then controlled legality of the imports: shipments made within the relevant period and cases satisfying the actual-user condition were treated as valid, while non-compliant imports were unauthorised and liable to confiscation, redemption fine and penalty.

---

---

Issues: (i) Whether the Collector's order releasing the goods on caution was an adjudication order reviewable under Section 129-D of the Customs Act, 1962. (ii) Whether stearin fatty acid was covered by the entry "palm fatty acid" and was permissible for import under OGL 1/83 prior to 11-11-1983. (iii) Whether Public Notice No. 47/83 dated 11-11-1983 could take away the import right under OGL 1/83. (iv) Whether the relevant conditions of OGL 1/83 were fulfilled in each case, and whether confiscation, redemption fine and penalty were justified.

Issue (i): Whether the Collector's order releasing the goods on caution was an adjudication order reviewable under Section 129-D of the Customs Act, 1962.

Analysis: The Collector examined the description of the imported goods, considered the materials placed before him and took a decision affecting importability and clearance. The order was therefore not a mere executive noting but an exercise of quasi-judicial power. An order passed in that capacity fell within the Board's revisional power under Section 129-D(1), and the absence of notice or hearing did not alter the character of the order, though it did show breach of natural justice.

Conclusion: The order was reviewable under Section 129-D and the departmental appeal was maintainable.

Issue (ii): Whether stearin fatty acid was covered by the entry "palm fatty acid" and was permissible for import under OGL 1/83 prior to 11-11-1983.

Analysis: On the evidence, palm oil, palm stearin and the fatty acids derived from them were treated as distinct commodities in trade, in government clarifications, in exemption notifications and in earlier adjudications. The reasoning that palm fatty acid was a generic term was rejected because it would make other specific entries redundant. The controlling test was commercial understanding, not chemical abstraction, and stearin fatty acid was found to be a separate commodity derived from palm stearin, not covered by the banned entry.

Conclusion: Stearin fatty acid was not covered by the entry "palm fatty acid" and was permissible for import under OGL 1/83 prior to 11-11-1983.

Issue (iii): Whether Public Notice No. 47/83 dated 11-11-1983 could take away the import right under OGL 1/83.

Analysis: OGL 1/83 was issued under Section 3 of the Imports and Exports (Control) Act, 1947 and conferred a statutory import right subject to its own conditions. A Public Notice issued by the Chief Controller of Imports and Exports had no statutory force and could not override or retrospectively curtail rights already created by the statutory OGL order. The imported commodity continued to be governed by the OGL order unless that order itself was amended by a statutory instrument.

Conclusion: Public Notice No. 47/83 did not extinguish the right to import stearin fatty acid under OGL 1/83.

Issue (iv): Whether the relevant conditions of OGL 1/83 were fulfilled in each case, and whether confiscation, redemption fine and penalty were justified.

Analysis: The decisive condition was condition 26 of OGL 1/83. Where the goods were shipped on or before 31-3-1984, the requirement of opening irrevocable letters of credit by 29-2-1984 did not arise. Those appeals in which shipment was completed by 31-3-1984 or in which the actual-user condition was satisfied were held to be valid imports. In the remaining appeals, shipment took place after 31-3-1984 and the mandatory letter of credit requirement was not fulfilled; those imports were unauthorised and attracted confiscation and penalty. The fine and penalty imposed were not found excessive in those cases.

Conclusion: The two appeals where OGL conditions were satisfied were allowed, and the remaining appeals were dismissed with confiscation, redemption fine and penalty sustained.

Final Conclusion: The decision accepted the statutory validity of OGL 1/83 for stearin fatty acid and rejected the effect of the later Public Notice as against that statutory order, but upheld confiscation and penalties wherever the mandatory OGL conditions were not complied with.

Ratio Decidendi: A non-statutory public notice cannot override or retrospectively curtail a right to import conferred by a statutory Open General Licence order, and classification of the imported goods under the import policy must be determined according to trade parlance and the commercial identity of the commodity.

---