Court clarifies import limits for Snap and Zip Fasteners under Import and Export Policy

The court interpreted General Note (3) of the Import and Export Policy for April 1983 to March 1984, allowing importers to bring in Snap and Zip Fasteners individually up to 5% of the license value each. The court rejected the Customs authorities' argument that the 5% limit applied to both items combined, emphasizing the separate listing of Snap and Zip Fasteners in the policy. The court also dismissed a departmental clarification attempting to combine the items for the limit, stating it lacked the force of law. The decision impacts importers for the relevant policy years, clarifying the individual import limits for Snap and Zip Fasteners.

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Issues:
Interpretation of General Note (3) of "0. Readymade Garments, Hosiery and Knitwear Products" of Appendix 17 of the Import and Export Policy for April 1983 to March 1984.

Analysis:
The petition involves a dispute regarding the interpretation of General Note (3) of the Import and Export Policy for April 1983 to March 1984. The petitioners had imported Zip Fasteners and sought to import Snap Fasteners as well, both under the same license. The Customs authorities contended that the total import of Snap and Zip Fasteners should not exceed 5% of the license value, while the petitioners argued that each item could be imported up to 5% of the license value individually. The key issue is whether the General Note allows for the import of each item separately or limits the total import of both items combined.

The General Note (3) specifically mentions that the import of Snap Fasteners and Zip Fasteners should not exceed 5% of the license value, without specifying whether this limit applies to each item individually or to both items combined. The court analyzed the wording of the Note and the placement of Snap and Zip Fasteners as separate items in the Appendix, concluding that each item can be imported up to 5% of the license value. The court highlighted that the Note does not treat Snap and Zip Fasteners as a single item and that the absence of specific language indicating a combined import limit supports the interpretation that each item can be imported up to 5% of the license value.

The respondents relied on a clarification by the Chief Controller of Imports and Exports that Snap and Zip Fasteners should be considered together for the 5% limit. However, the court rejected this argument, stating that the clarification does not hold outside the department and that the Chief Controller cannot amend the policy through a clarification without issuing a public notice. Therefore, the court held that each item can be imported up to 5% of the license value, allowing the petition in favor of the importers.

The court clarified that the decision applies to the policy for 1983-84 and 1984-85, emphasizing that if both Snap and Zip Fasteners are specifically limited together in a license, the combined import should not exceed 5% of the license value. The court stayed the operation of the order for two weeks but maintained that the interim order allowing the importers to clear goods based on the previous interpretation remains in effect.

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