Court Rules in Favor of Importers with Imprest Licences in Aluminum Alloy-Coated Steel Import Case

The court ruled in favor of the petitioners, importers holding imprest licences, in a case challenging obstruction to their import of aluminum alloy-coated steel sheets. The court held that imports under imprest licences should be governed by the policy prevailing at the time of licence issuance, not the import date. It clarified that the Import Policy 1983-84's restrictive provisions did not apply to imprest licences, distinguishing them from replenishment licences. The court also found that the Supreme Court's decision in a previous case regarding import policies was not applicable to imprest licences. The court allowed the imports and discharged bank guarantees/bonds, with each party bearing their own costs.

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Issues Involved:
1. Validity of imports under imprest licences against the backdrop of changing import policies.
2. Interpretation of the Import Policy 1983-84, specifically Paragraph 255(3).
3. Applicability of Supreme Court's decision in M/s. D. Navinchandra & Co. v. Union of India.
4. Relevance of administrative orders and previous judicial decisions to the case at hand.

Issue-Wise Detailed Analysis:

1. Validity of Imports under Imprest Licences Against Changing Import Policies:
The petitioners, importers holding imprest licences, challenged the respondents' obstruction to their import of aluminum alloy-coated steel sheets. The crux of the matter was whether the imports under these licences could be subjected to the Import Policy 1983-84, which had reclassified the goods from OGL (Open General Licence) items to canalised items. The petitioners contended that the imports should be governed by the policy prevailing at the time of the licence issuance and endorsement, not the import date.

2. Interpretation of Import Policy 1983-84, Specifically Paragraph 255(3):
Paragraph 255(3) of the 1983-84 Policy stated that "REP licences and Additional licences held by Export Houses/Trading Houses will cease to be valid for import of any item which could be imported under Open General Licence during 1982-83 but is no longer so in this Import-Export Policy." The petitioners argued that this paragraph did not apply to imprest licences. The court agreed, noting that the restrictive paragraph related only to REP and additional licences, not imprest licences. The court emphasized that the term "replenishment licence" in the context of imprest licences should not be read literally but as "a replenishment licence accruing through an imprest licence."

3. Applicability of Supreme Court's Decision in M/s. D. Navinchandra & Co. v. Union of India:
The respondents relied on the Supreme Court's decision in M/s. D. Navinchandra & Co. v. Union of India, which held that items importable under a previous policy must also be importable under the current policy at the time of import. However, the court distinguished this case, noting that the Supreme Court's decision pertained to additional licences, not imprest licences. The court concluded that the decision in D. Navinchandra's case did not cover imports made under imprest licences.

4. Relevance of Administrative Orders and Previous Judicial Decisions:
The petitioners cited an administrative order in the case of M/s. Hindustan Transmission Pvt. Ltd., where the Customs Authorities allowed imports under similar circumstances. The court acknowledged the persuasive value of this administrative decision, noting that it supported the petitioners' position. Additionally, the court referenced a similar case decided by a single judge, Pendse J., who ruled that subsequent policies should not deprive importers of the facilities granted under the policy prevailing at the time of licence issuance. The court found these precedents persuasive and applicable to the present case.

Conclusion:
The court concluded that the decision in D. Navinchandra's case was restricted to additional licences and did not apply to imprest licences. Therefore, the imports made by the petitioners under imprest licences were not illegal, and the respondents' threatened action was unwarranted in law. The court made the rules absolute to that extent, leaving parties to bear their own costs and ordering the discharge of bank guarantees/bonds after eight weeks.

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