Firm letter of credit commitments can preserve import rights under a saving clause when made before the cut-off date.

A saving clause in Public Notice No. 67/77 protected imports where a firm commitment by irrevocable letter of credit had been concluded before the cut-off date. The decisive factor was the earlier bank application, acceptance, and communication of commitment to the foreign seller; a later formal issue of the letter of credit was treated as confirmatory and not a fresh post-deadline commitment. The notice was also not enforceable against importers without reasonable publication or effective trade notice. On that reasoning, the imports were treated as covered by the saving clause and the confiscatory and penal consequences were not sustainable.

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Issues: (i) Whether the imports of polyester filament yarn were protected by the saving clause in Public Notice No. 67/77 dated 2-9-1977 on the basis of a firm commitment by way of irrevocable letter of credit made before the crucial date; (ii) Whether the public notice could be enforced against the importers before it was sufficiently published or made known to the trade and public.

Issue (i): Whether the imports of polyester filament yarn were protected by the saving clause in Public Notice No. 67/77 dated 2-9-1977 on the basis of a firm commitment by way of irrevocable letter of credit made before the crucial date.

Analysis: The saving clause covered only exporters or nominee manufacturers who had, during the specified period, entered into firm commitments by way of irrevocable letters of credit. The bank application was made and accepted on 1-9-1977, the foreign supplier's confirmation referred to the same letter of credit particulars, and the bank's commitment to the seller was communicated on that date. The later formal issue of the letter of credit on 5-9-1977 did not negate the earlier contractual commitment. The subsequent document was treated as confirmatory of an already concluded commitment and was not a new commitment arising after 2-9-1977.

Conclusion: The imports fell within the saving clause and were not in violation of Public Notice No. 67/77; the finding of unauthorised import was unsustainable.

Issue (ii): Whether the public notice could be enforced against the importers before it was sufficiently published or made known to the trade and public.

Analysis: A restrictive public notice affecting trade rights must be brought to the notice of the public by reasonable promulgation or publication. The material on record indicated that the Gazette copy was made available later and no adequate evidence was produced to show earlier effective public/trade notice before the importer's commitment and subsequent banking steps. On that basis, the notice could not be treated as having operated against the importers before they acted.

Conclusion: The public notice could not be enforced against the appellants before it was made effectively known, and the penalties and fines were not justified.

Final Conclusion: The majority held that the imports were validly covered by the earlier commitment and were not hit by the canalising public notice, so the confiscatory and penal orders were set aside with consequential refund relief.

Ratio Decidendi: For a saving clause protecting imports made under a firm commitment by irrevocable letter of credit, the decisive factor is the concluded banking commitment and its communication to the seller before the cut-off date, and a later formal issue of the credit relates back to that commitment; a restrictive trade notice cannot be enforced without effective publication or promulgation.

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