Generic oil entries in import policy cover all varieties, and customs penalty can stand independently of bank guarantee release.

Rapeseed oil was treated as a generic Appendix 9 canalised entry under the AM 1981 policy, so the import was not available under open general licence. Applying the Supreme Court's approach to similarly worded oil entries, the forum held that a generic commodity description covers both edible and non-edible varieties unless the policy expressly limits it. It also stated that penalty under the Customs Act could be imposed independently of bond or bank guarantee enforcement, and that the absence of an express penal subsection in the operative order did not invalidate the penalty where the show cause notice had invoked confiscation and penalty provisions.

---

---

Issues: (i) whether the applicable import policy was AM 1981-82 and whether the imported rapeseed oil was covered by the canalisation entry in Appendix 9; (ii) whether rapeseed oil in Appendix 9 covered both edible and non-edible or industrial varieties and was therefore excluded from open general licence import; (iii) whether the benefit of registration of contract extended beyond replenishment items to other flexibilities under the REP licence; and (iv) whether penalty under the Customs Act, 1962 was sustainable notwithstanding release of goods on bank guarantee and absence of an express reference to the penal provision in the adjudication order.

Issue (i): whether the applicable import policy was AM 1981-82 and whether the imported rapeseed oil was covered by the canalisation entry in Appendix 9.

Analysis: The adjudicating authority itself proceeded on the basis that AM 1981 Policy governed the controversy, and the appellate forum held that the validity of the order had to be judged on the grounds stated in it and not on fresh reasons later sought to be added. The imports were therefore examined with reference to the AM 1981 policy framework and not on any later policy regime.

Conclusion: The applicable policy was AM 1981 and the matter had to be decided on that basis.

Issue (ii): whether rapeseed oil in Appendix 9 covered both edible and non-edible or industrial varieties and was therefore excluded from open general licence import.

Analysis: The forum applied the Supreme Court's interpretation of a similarly worded oil entry in Appendix 9 and held that where a commodity is described generically, the entry is not confined to the edible variety alone unless the policy expressly so limits it. On that reasoning, rapeseed oil was treated as a generic description covering both edible and non-edible varieties. Once so treated, the item fell within the canalised category and could not be claimed under OGL.

Conclusion: Rapeseed oil covered both edible and non-edible varieties and was not importable under OGL.

Issue (iii): whether the benefit of registration of contract extended beyond replenishment items to other flexibilities under the REP licence.

Analysis: Having held the goods to be canalised and outside OGL, the forum found it unnecessary to record a separate finding on the scope of the registration benefit under the REP licence vis-a -vis replenishment and flexibility items. The issue did not survive for independent adjudication.

Conclusion: No separate finding was recorded on this issue.

Issue (iv): whether penalty under the Customs Act, 1962 was sustainable notwithstanding release of goods on bank guarantee and absence of an express reference to the penal provision in the adjudication order.

Analysis: The execution of a bond or bank guarantee did not bar penal action. The forum held that confiscability and penalty under the Customs Act could proceed independently, and that mens rea was not essential for such penalty. The show cause notices had specifically invoked confiscation and penalty provisions, so omission to cite the penal subsection in the operative order did not vitiate the levy. In the absence of any established long-standing practice favouring the import, no case for interference with the penalty was made out.

Conclusion: The penalty was validly imposed.

Final Conclusion: The imported rapeseed oil was liable to confiscation and the penalties imposed by the customs authorities were upheld, leaving no ground to interfere with the adjudication.

Ratio Decidendi: A generic import entry for an oil commodity covers all varieties of that commodity unless the policy expressly confines it, and where the goods are liable to confiscation, penalty under the Customs Act may be imposed independently of bond enforcement and without proof of mens rea.

---