1986 (2) TMI 215 - AT - Customs

Tribunal overturns confiscation order due to invalid Public Notice, emphasizing rights under valid license.

The tribunal allowed the appeal, setting aside the confiscation order. The judgment emphasized that the Public Notice did not validly canalize the goods ... Rights conferred under licence and not under policy Issues:Interpretation of Public Notice No. 25/80 dated 3-7-1980 regarding canalisation of goods, validity of licence in light of the Public Notice, authority to change import policy, impact of opening Letter of Credit after issuance of Public Notice, and the statutory nature of Public Notices.Analysis:The case involved a dispute regarding the canalisation of goods under Public Notice No. 25/80 dated 3-7-1980. The appellant, a clock manufacturer, imported Quartz Crystals and Integrated Circuits for clocks, which were objected to by Customs post-canalisation. The Additional Collector ordered confiscation, later upheld by the Board, leading to an appeal. The appellant argued that the Public Notice only applied to electronic watches, not clocks, and their actions were based on pre-notice arrangements with overseas suppliers.The key contention was whether the Public Notice validly canalised the goods imported by the appellant. The tribunal analyzed the wording of the Public Notice and concluded that it specifically referred to components/modules of electronic watches, not clocks. As the imported items were for clocks, not electronic watches, the canalisation did not apply. The Additional Collector and the Board erred in their interpretation, leading to the appeal being allowed based on this ground alone.Regarding the validity of the licence post-Public Notice issuance, the tribunal emphasized that non-statutory Public Notices cannot override rights conferred by a validly issued licence. The licence permitted the import of Quartz Crystals and Integrated Circuits for clocks, and as the import occurred within the licence period, the confiscation order was deemed erroneous. The tribunal cited a Supreme Court decision to support the non-statutory nature of Public Notices, upholding the appellant's argument.In conclusion, the tribunal allowed the appeal, setting aside the confiscation order. The fine, if paid, was directed to be refunded to the appellant. The judgment highlighted the distinction between statutory orders and non-statutory policy statements like Public Notices, affirming that rights conferred under a valid licence cannot be revoked by subsequent non-statutory changes in policy.