1987 (7) TMI 345 - AT - Customs

Appeal denied, license under AM 79 policy upheld. Confiscation order set aside, fine to be refunded. Import policy scrutinized.

RAJ COPPER & CABLE INDUSTRIES Versus COLLECTOR OF CUSTOMS, BOMBAY

The appeal of M/s. Raj Copper and Cable Industries was rejected, confirming the order of the Additional Collector as upheld by the Board. The license ... Import Issues Involved:1. Validity of the import license under the AM 79 policy.2. Applicability of subsequent policy changes (AM 80) to the license.3. Requirement of firm commitment by opening an irrevocable letter of credit.4. Canalisation of imported goods under the AM 80 policy.5. Retrospective effect of public notices and policy changes.Issue-wise Detailed Analysis:1. Validity of the Import License under the AM 79 Policy:The appellants, M/s. Raj Copper and Cable Industries, imported 6 Amine Pencillinic Acid under a license issued on 19.1.1979, valid for 12 months and revalidated for an additional six months. The import took place within the revalidated period. The license allowed import of items listed in Appendices 5 and 7, excluding those in Appendix 26, and subject to a value limit of Rs.2 lakhs per item. The appellants argued that the goods were covered under OGL Item I of Appendix 10 of the AM 79 policy, which did not require a firm commitment by opening an irrevocable letter of credit. The licensing authority did not impose any conditions at the time of revalidation, implying that the original policy (AM 79) should govern the import.2. Applicability of Subsequent Policy Changes (AM 80) to the License:The customs authorities objected to the clearance on the grounds that the goods were canalised under the AM 80 policy and could only be imported by the State Chemicals and Pharmaceuticals Corporation of India Ltd. The appellants contended that the subsequent policy changes could not affect the rights conferred by the license issued under the AM 79 policy. The Supreme Court and various High Courts have held that the policy in force at the time of issuing the license governs the import, and subsequent amendments cannot retrospectively affect the license.3. Requirement of Firm Commitment by Opening an Irrevocable Letter of Credit:The AM 80 policy introduced a requirement for opening an irrevocable letter of credit before 1.5.1979 for imports under OGL by export houses. The appellants did not meet this requirement, arguing that it was not applicable to their license issued under the AM 79 policy. The Supreme Court in Bharat Barrel and Drum Manufacturing Co. Pvt. Ltd. v. Collector of Customs, Bombay, held that non-statutory public notices could not retrospectively impose conditions on licenses issued earlier.4. Canalisation of Imported Goods under the AM 80 Policy:During the AM 80 policy period, the imported goods were canalised and could only be imported by the designated agency. The appellants argued that the canalisation under the AM 80 policy could not invalidate their license issued under the AM 79 policy, where the goods were not canalised. The Calcutta High Court in Mangla Brothers v. Collector of Customs and Others held that a license issued during a particular policy period is governed by that policy, and subsequent amendments cannot affect it.5. Retrospective Effect of Public Notices and Policy Changes:The Supreme Court and various High Courts have consistently held that public notices and policy changes do not have retrospective effect. The Bombay High Court in Lokash Chemical Works v. M.S. Mehta, Collector of Customs (Preventive), Bombay, held that policy statements and public notices are non-statutory and cannot alter the terms of a license already granted. The Delhi High Court in M/s Jain Shudh Vanaspati Ltd. v. Union of India and another held that subsequent policy changes could not adversely affect the rights and interests flowing from licenses already issued.Separate Judgments Delivered:- Majority Opinion (Member Judicial and Third Member): The appeal should be allowed as the license was governed by the AM 79 policy, and subsequent policy changes could not affect the rights conferred by the license. The order of confiscation and fine should be set aside, and the fine, if any, paid should be refunded to the appellants.- Dissenting Opinion (Member Technical): The appeal should be rejected as the import policy for the year 1979-80 cannot be ignored in judging the validity of the license, and there was no firm commitment on the part of the license holder before 1.5.1979. The order of the Additional Collector of Customs, as confirmed by the Board, is correct.Final Order:The appeal of M/s. Raj Copper and Cable Industries is rejected, confirming the order of the Additional Collector as upheld by the Board.