Trade parlance and shipment date control import policy treatment, customs duty timing, and canalisation of palm kernel goods.

Palm kernel is treated as a distinct commercial commodity from palm seed under trade parlance and market understanding, so it was not canalised for the period discussed. A later public notice did not affect consignments already shipped under prior firm contracts, because shipment date controlled the applicable import position. Where customs authorities wrongly prevented timely clearance, the importer could be placed in the position it would have occupied absent that obstruction, making the duty rate the one prevailing when the goods arrived. The unshipped balance under the contract was not protected by the earlier open general licence and remained subject to the policy in force at actual shipment.

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Issues: (i) Whether palm kernel is a different commercial commodity from palm seed and, therefore, not a canalised item under the relevant import policy; (ii) Whether the public notice of 27 July 1987 altered the import position for consignments already shipped under prior firm contracts; (iii) What date governs the rate of customs duty for the imported goods; and (iv) Whether the balance quantity under the contract, not yet shipped, could still be imported under the earlier open general licence regime.

Issue (i): Whether palm kernel is a different commercial commodity from palm seed and, therefore, not a canalised item under the relevant import policy.

Analysis: The distinction was examined on the basis of trade parlance and commercial identity, not on any merely botanical or technical description. The materials before the Court showed that palm seed and palm kernel are obtained through different processes, are known differently in the market, and are not substitutable in ordinary commercial dealings. The Court also noted that the customs exemption notification treated palm seeds separately and later extended the benefit expressly to palm kernel, indicating that the two were regarded as distinct commodities.

Conclusion: Palm kernel is not palm seed and, for the period in question, was not a canalised item.

Issue (ii): Whether the public notice of 27 July 1987 altered the import position for consignments already shipped under prior firm contracts.

Analysis: The Court held that the import policy and the open general licence scheme incorporated amendments made from time to time by public notice. The decisive factor was the date of shipment, not the date of arrival in India. Since the goods already in question had been shipped before the public notice, the subsequent canalising amendment did not affect those consignments.

Conclusion: The consignments already shipped before 27 July 1987 remained governed by the earlier import position and were not hit by the later public notice.

Issue (iii): What date governs the rate of customs duty for the imported goods.

Analysis: Although the general statutory rule points to the rate applicable at clearance, the Court applied restitutionary principles because customs authorities had wrongly prevented timely clearance by treating the goods as prohibited. The importer was therefore to be placed in the position it would have occupied had clearance been allowed when the goods arrived.

Conclusion: The applicable duty rate was the rate prevailing in October 1987 when the goods arrived, not the enhanced rate applicable later or the rate as on filing of the bills of entry.

Issue (iv): Whether the balance quantity under the contract, not yet shipped, could still be imported under the earlier open general licence regime.

Analysis: The Court distinguished between goods already shipped and goods not yet shipped. Open general licence coverage depended on the policy and import position at the time of shipment. Since the policy period had expired and the later position treated the item as canalised, the unshipped balance could not claim the earlier regime merely because it was covered by the same contract.

Conclusion: The unshipped balance was not covered by the earlier open general licence and would depend on the import policy prevailing at the time of actual shipment.

Final Conclusion: The adjudication against the imported consignments already shipped was set aside and the importer obtained relief on the principal issue of importability, but the goods were held liable to customs duty at the October 1987 rate and the unshipped balance was not protected by the earlier policy.

Ratio Decidendi: In import-control matters, the commercial identity of goods must be determined by trade parlance and market understanding, and where a later import restriction is introduced by public notice, its effect on a consignment depends on the shipment date, while the importer may be placed in the position it would have occupied but for wrongful customs obstruction when determining duty.

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