TaxTMI 
TaxTMI 
1986 (11) TMI 380
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....passed by the said Collector. The other appeals, vide Serial Nos. 2 to 10, were filed by the importers concerned against the respective order-in-original passed by the Collector of Customs, Calcutta. 3. The facts of the cases, in brief, are as follows:- (i) Appeal No.C-152/84-Cal. (a) M/s Mansingka Brothers, respondent No.1, entered into a contract No. Oil/002/0/83 dated 15-3-1983 with M/s Kuok (Singapore) Pvt. Ltd., Singapore for importing 1500 M/Tons of Stearin Fatty Acid. The goods were to be shipped in part consignments. The first consignment of 200.17 M/Tons of the goods arrived at Calcutta Port on 13-9-1983 per "SS John Everett". The respondent filed Bill of Entry on 13-9-1983 for clearance of the goods under OGL - Appendix 10 - Item No. 1, list 8, Part III of I.T.C. Policy 1983-84. On 24-9-1983 the Assistant Collector of Customs issued a show cause notice alleging that the importation of the goods was not authorised under Open General Licence vide Appendix 10 of the Import Policy. It was also stated in the show cause notice that Stearin Fatty Acid was covered by the term "Palm Fatty Acid " appearing at Sr.No. 50 of Appendix 4 of the Import Policy 1983-84....
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....me contract arrived at Calcutta Port on 2-11-1983 per vessel "Ramoneverett." The respondent sought clearance of the goods under OGL vide Sr. No.1 of Appendix 10, list 8, Part III of Import Policy 1983- 84. Bill of Entry for clearing the goods was filed on 9-11-1983. The Collector of Customs, Calcutta, vide his order dated 17-11-1983, allowed the clearance of the goods on caution. No show cause notice was issued to the respondents before passing this order and no opportunity was given to explain their case. Copy of the order of caution was also not endorsed to the respondents. Extract from the Collector's order dated 17-11-1983 in File No. S/33-78/83-A (Gr. I), as filed with the appeal memorandum, reads as follows :- "In so far as the technical aspect is concerned I have discussed with the Deputy Collector Chemist as well as with the concerned Deputy Collector. My tentative view is as follows :- From palm oil by fractionation, two products are obtained. The first one is palmolein and the other one is palm stearin. From palm stearin by further processing, two products are obtained, one is fatty acid and another is glycerin. Here we are concerned with the fatty acid ....
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....nutes say that the products would be taken as same although there is a suggestion that C.C.I. & E. may have to give a clarification. Dy. C.C.'s opinion has also been seen by me. He also said that both the items should be taken as the same. In order to find out whether palm fatty acid and palm stearin acid are same or not, it would have been better to find out from the market whether they are known as different entities in the market parlance. But there is no Indian market of these goods and the importations are very rare and therefore there is no question of finding out whether In the market parlance they are known as same or not. In any case, if any commodity as palm stearin or palm fatty acid was known as a different entity in the market, then the technical literature would have described this as such. In fact, 1 find from the technical literature mentioned above that the crude fatty acid described therein does not distinguish between the fatty acid derived from palm oil directly or from attraction of palm stearin. Obviously, there is no such other product known either in the trade or in the technical literature as palm fatty acid, otherwise it would have been distinguis....
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....penalty on the importers under Section 112 of the Act commensurate to the gravity of offence and for suitably modifying the said order of the Collector." Accordingly, the Collector of Customs filed this appeal. (ii) In the remaining 9 appeals, vide appeals at serial Nos. 2 to 10, the appellants imported stearin fatty acid against contracts entered into with foreign suppliers before 11-11-1983. On arrival of the goods, the appellants sought clearance of the same under O.G.L. vide Appendix-10(1) of the Import Policy for 1983-84 on the ground that the goods did not figure in any of the Appendices 3 to 9 and 15 of the Import Policy. The Custom House, Calcutta took a different view that the goods were covered by expression palm fatty acid appearing at serial No.50 of Appendix 4 of the Import Policy for that year and hence the import of the same was banned prior to 11-11-1983 and canalised through State Trading Corporation of India from 11-11-1983. The appellants filed Writ Petitions in Calcutta High Court and obtained interim orders, but the same were later-on vacated/ withdrawn. The appellants then submitted before the adjudication proceedings under the Customs Act before the ....
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....ld not release them for home consumption. 5.2. Section 129-D(1) of the Customs Act, 1962 empowers Central Board of Excise & Customs, New Delhi to call for and examine the records of any proceedings in which a Collector of Customs as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of such decision or order, and may by order direct such Collector to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order. The Adjudicating Officer has been defined in Section 2(1) of the Customs Act. According to this definition, the "Adjudicating authority does not include Collector (Appeals)". In view of this definition, the Collector who passed the order dated 17-11-1983 was an Adjudicating authority. Accordingly, in terms of provision of Section 129-D(1) of the Customs Act, the Central Board of Excise & Customs could review the said order passed by the Collector. Section 129-D(4) of the Act provides that when an application is made by the Collector in pursuance of an order under sub-section (1) of Section 12....
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.... were the respondents given any personal hearing as required under Section 124 of the Customs Act, 1962. The respondents did not waive the issue of show cause notice and right of personal hearing. The Collector did not also disclose any evidence to the respondents before passing the order. The respondents were not allowed to state their case. The Collector decided the case subjectively and not objectively. The order passed by the collector was, therefore, not an order under Section 122 of the Customs Act. As the order was not under Section 122 of the Act and the Collector did not pass the said order as an adjudicating authority, the Board could not review the order under Section 129-D(1) of the Act. According to this section, the Board can call for and examine the records of any proceedings which the Collector of Customs had passed as an adjudicating. The appeal filed by the Department should be dismissed on this ground alone. Shri Nankani has relied upon the judgment of the Hon'ble Supreme Court in the case of Shankerlal Aggarwal and others v. Shanker Lal Poddar and others reported in AIR-1965-SC-507 at page 511, para 13. Shri Nankani has also stated that the order of caution was ....
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.... by the judgment of Delhi High Court in the case of Kaptan's Enterprises v. Union of India, reported in air- 1986-Delhi-221 in which the Hon'ble High Court held that palm stearin fatty acid was not covered by the term "Palm fatty acid" and hence import of palm stearin fatty acid was permissible under O.G.L prior to 11-11-1983. Shri Nankani stated that the judgement of Delhi High Court was binding on the Tribunal. In support of his contention, he cited the judgments reported in (i) 1986-(7)-ECR-233 = 1986(24) ELT 635 (Tri.) (M/s. Maltexii Masters Limited, Patiala v. Collector of Central Excise, Chandigarh), (ii) 1984 (17) E.L.T. 331 (Atma Steels Pvt. Ltd. and others v. Collector of Central Excise, Chandigarh and others), and (iii) 1978-ELT-J-552 (Mercantile Express Company Limited v. Assistant Collector of Customs & Others). He also argued that the Additional Collector of Customs, Bombay in his adjudication order dated 17-10-1984 held in a similar case that palm stearin fatty acid was different from Palm Fatty Acid and was not covered by serial No. 50 of Appendix 4 of the Import Policy, 1983-84. The Central Board of Excise & Customs did not review the said order of the Additional Co....
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....to Shri Ghosh, the judgment of Delhi High Court in Kaptan's Enterprises' case is not binding on the Tribunal in view of the findings of this Tribunal In the case of Atma Steels Pvt. Ltd. and others v. Collector of Central Excise, Chandigarh (1984 (17) E.L.T. 331). 8. Shri S.D. Nankani, learned Advocate for the appellants No. 2, 3, 4, 8 and 9 stated that he would first argue for appellant No. 2 in Appeal No. C-24/85-Cal. and then adopt those arguments in the other four appeals as the salient facts and issues were common, except slight variations in dates etc. At the beginning of his arguments, he referred to the Collector's observations in para 12.1 of the adjudication order in appeal No. C-24/85-Cal. to the effect that the importers should have sought clarifications from the concerned authorities before entering into any contract with the foreign suppliers and said that because of those observations he would like to submit the following documents as additional evidence :- (i) Copy of letter No. 1 (P) I&EP/CLA 752 dated 3.7.85 from the Government of India, Directorate General, Technical Development (I&EP Cell), New Delhi to M/s. Ashok Industries, Bombay; (ii) Co....
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....vocate on the above propositions are given below:- (i) It is an admitted fact that the appellants imported Industrial Palm Stearin Fatty Acid. In para 13 of the Adjudication order, the Collector has observed: "Since the goods in question namely Palm Stearin Fatty Acid is not an OGL item......". The appellants entered into a contract for import of "3500 M/Tons Industrial Stearin Fatty Acid". In the remarks column of the contract it was stated by the foreign suppliers "we guarantee that goods will be other than Palm Fatty Acid." Palm oil is obtained from palm fruit by extraction process. After palm oil is obtained, the oil never remains to be palm fruit. From palm oil, two products are obtained by fractionation, one is the liquid fraction called palmolein and the other is solid or semi-solid fraction known as palm stearin. After this fractionation, palm stearin becomes a completely different product separate from palm oil. It ceases to be palm oil. Palm Stearin Fatty Acid is obtained from Palm Stearin by hydrolysis process. Therefore, the source of palm stearin fatty acid is palm stearin and not palm oil or palm fruit. Palm Fatty Acid is derived from palm oil direct....
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.... appellants). (iv) At page 221 of the paper book submitted by the appellants, is a copy of letter dated 26-1-1984 from the S.T.C., Singapore to suppliers of edible oils/manufacturers of split palm stearin fatty acid in which the State Trading Corporation of India, Singapore invited offers on 27-1-1984 for the following products :- (1) Palm Fatty Acid Distillate (PFAD), (2) Split Palm Stearin Fatty Acid (SPSFA), (3) Edible Palm Oils, (4) Coconut oil for edible purposes. Sub-para (iii) (iv) above show that the State Trading Corporation has treated Palm Stearin Fatty Acid as a separate commodity. (v) In a telegram addressed to "ASCOSOAP CALCUTTA" with post copy to Shri P.R. Bharech, Chief Executive, Asiatic Soap Company, Calcutta (Copy of the telegram submitted at page 223 of the Paper Book filed by the appellants). The State Trading Corporation of India, New Delhi quoted the sale price of split Palm Stearin Fatty Acid (Bulk) at Rs. 9,584/- per M/Ton Ex. Jetty and Rs. 9,809/- per M/Ton Ex. Tank. (vi) Indian Soap & Toiletries Makers' Association, Bombay in their Circular No. ISTMA/106/12/84, dated 9-3-1984 to All Members of the Association circulated th....
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....ral of Technical Development clarified that "Stearin Fatty Acid is not the same as Palm Fatty Acid both in manufacturing process and end use and it is seen that Stearin Fatty Acid was under O.G.L as per Import Policy for 1983-84 Appendix 10(1)". It was also stated that "Similarly Palm Kernel Fatty Acid is not covered under entry Lauric Acid and Palm Fatty Acid. Therefore, it was under OGL during 1983-84 policy under 10(1)". (x) Again, in letter No. 1 (2)/I&EP/CLA/492/85/2145 dated 15-11-1985 to M/s. B.Vijay Kumar & Co., the Government of India, Directorate General of Technical Development (I &EP CELL) stated that "Palm Stearin Fatty Acid is not the same as Palm Fatty Acid, therefore, it was under O.G.L vide Appendix 10(1) of the I.T.C. 1978-79". (xi) Paragraph 242(3) at page 73 of the Import-Export Policy 1983-84 (Volume I) provides that an actual user may seek clarification from the Directorate General of Technical Development on the scope of any item in Appendices 1, 2, 3, 4, 5, 8, 9, 10,15 and 30. Procedure to be followed in case of conflicting clarifications has also been laid down therein. The importers M/s. B. Vijay Kumar and M/s. Ashok Industries sought for....
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....k). No appeal was filed by the department against this order. (xv) The question involved in this appeal was also examined in great detail by the Collector of Customs, Calcutta earlier in a case of import of "Stearin Fatty Acid" and it was decided by him in his order-in-original No. S-33-67/83-A (Gr.1) dated 29-9-1983 that "Palm Stearin Fatty Acid" and "Palm Fatty Acid" are different from each other. The former is not covered by the term "Palm Fatty Acid" appearing at Sr. No.50 of appendix 4 and he allowed the goods to be cleared under OGL. No appeal has been filed by the Department against this order-in-original. (xvi) In the case of Kaptan's Enterprises and another v. Union of India [AIR-1986- Delhi-221) the Hon'ble Delhi High Court has held that the import of "Stearin Fatty Acid" under O.G.L. was permissible prior to 11-11-1983. The first and last sentences of paragraph 13 of the judgment have very categorically said so. The appellants' case is squarely covered by this judgment. (vie) In paragraph 12.5 of the order-in-original the Collector has held that there is no product chemically known as Palm Fatty Acid and that none of the literature available on....
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....AIR-1962-SC-1893 M/s. East India Commercial Co. Ltd. and another v. Collector of Customs, Calcutta; and (iii) AIR-1968-SC-718 Union of India and others v. Anglo Afghan Agencies. 13. Regarding the proposition No. (111), Shri Nankani stated that the appellants complied with all the conditions of I.T.C. order No. 1/83 dated 15.4.83. The imported goods, viz. Industrial Stearin Fatty Acid, did not fall under any of the Appendices 3 to 9 and 15 of Import-Export Policy 1983-84. Condition (1) of the I.T.C. order was thus fulfilled. The Imported goods did not fall under any of the items in Parts I and II of the Schedule to I.T.C. order 1/83. The goods were covered by serial 16 of Part III of the said schedule. Condition No. (26) of the I.T.C. order 1 /83 was also satisfied as the goods were shipped on or before 31-3-1984. The goods were imported for stock and sale. The appellants' case is, therefore, fully and squarely covered by Delhi High Courts' Judgment reported in AIR-1966-Delhi-221. Import of Industrial stearin fatty acid under O.G.L. was valid. 14. Regarding the 4th proposition, the learned advocate argued that according to Black's Law Dictionary 5th Edition, page 967, the defi....
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...., Additional Collector of Customs, Bombay were not challenged by the Department by filing appeal. Cochin Custom House confirmed that there was a practice of clearing Stearin Fatty Acid under O.G.L. The appellants were guided by the practice. No public notice was issued for the guidance of the trade in this case informing that the practice would not be followed. The learned Advocate argued that because of the practice imposition of redemption fine was not justified. He cited the following decisions in support of his contention : (i) 1984 ECR 886 (Bombay) (Gujarat State Export Corporation Ltd. and another v. Union of India and another) (ii) 1984 (18) ELT 533-(CEGAT) (Shiama Engine Valves Ltd. v. Collector of Customs, Bombay). (iii) Order No. 596-A of 1981, dated 21-9-81 passed by the Central Board of Excise & Customs in appeal No. APP/72/81 of M/s. Kamani Oil Industries. 17. Arguing on the proposition (VII), Shri Nankani stated that there was no deliberate or contumacious violation of law on the part of the appellants. There was a practice. They were guided by the order-in-original passed by Shri T.S. Swaminathan, the then Collector of ....
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....d item from 11-11-1983. Appellants then moved Calcutta High Court and obtained order on the basis of which Letter of Credit was opened on 6-4-1984, as amended on 2-5-1984 in the case of Appellant No. C-36/85-Cal. and on 21-4-1984 in the case covered by Appeal No. C-37/85-Cal. In the circumstances the condition of opening letter of credit by 29-2-84 is deemed to have been complied with Letter of credit is a collateral security for payment and it has no other purpose. The appellants tried to comply with condition (26) of ITC order 1 /83 by opening letter of credit by 29-2-1984, but the bank failed to do its duty. For this fault of the bank, the appellants should not be penalised or punished. Regarding redemption fine and penalty, the learned Advocate adopted the same arguments as in appeal No. C-24/85-C. 20. While arguing for the appellants in appeal No.C-90/85-Cal and C-91/85-Cal, Shri Nankani has stated that the issues involved in these two appeals are the same as in Appeal No.C-24/85-Cal and the salient facts are also similar, except that the appellants did not open any letter of credit in these two cases. Contracts in both the cases were entered into before 1....
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....e, Palm Stearin Fatty Acid is not included in the term "Palm Fatty Acid". (ii) OGL order 1/83, dated 15-4-1983 was issued under Section 3 of Imports & Exports (Control) Act, 1947. Public Notice 47/83, dated 11-11-1983 was an administrative order. It cannot over-ride the statutory I.T.C. order 1/83 issued under Section 3 of the aforesaid Act. This principle of law has been laid down by the Supreme Court in East India Commercial Co. Ltd. v. Collector of Customs, Calcutta (AIR-1962-SC-1893), followed by Delhi High Court in Kaptan's Enterprises v. Union of India (AIR 1986-Delhi-221). Public Notice can not also have retrospective effect. This proposition has been clearly laid down by the Supreme Court in 1978-ELT-(J-375) (Cannanore Spinning and Weaving Mills Ltd. v. Collector of Central Excise, Cochin) and AIR-1971-SC-704 (Ms. Bharat Barrel and Drum Mfg. Co. Ltd. v. Collector of Customs, Bombay and another) and by this Tribunal in 1984-ECR-301 = 1984 (16) ELT 497 (Tri.) (M/s. Patel Impex Pvt. Ltd. v. Collector of Customs, Ahmedabad). Normally an ITC Order is amended by another ITC order and then Public Notice is issued on the basis of amending ITC Order. ITC Order No. 33/....
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....High Court's judgment is binding on the Tribunal. (vi) The judgment of Punjab and Haryana High Court in Oswal Woollen Mills' case [1984 (18) ELT 694] is not applicable to the present cases as the facts are distinguishable. In that case, right to import arose from paragraphs 174 and 176 of the Import Policy, and not from the I.T.C. Order issued under Section 3 of the Imports & Exports (Control) Act. The right under paragraphs 174 and 176 was taken away in that case under paragraph 231 of the Import Policy. Supreme Court's judgment in Liberty Oil Mills' case (AIR-1984-SC-1271) did not decide any merit. Reference to that judgment is not relevant to the present case. 22. Shri Bhaskar Gupta, learned Advocate, who argued for M/s. Kusum Products Limited in appeal No.C-129/85-Cal submitted written arguments in the Court, with a copy to the learned advocate for the respondent No.2. In the written submissions, the main contentions, besides mentioning certain errors and inconsistencies in the adjudication order of the Collector, are that prior to 11-11-1983 the impugned goods, viz. Stearin Fatty Acid were permissible under O.G.L vide I.T.C. Order No.1/1983, dated 15-4-....
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....one M/s Asiatic Soap of Calcutta. (f) The Collector of Customs, Calcutta (Shri T.S. Swaminathan) has opined in his adjudication order that Palm Stearin Fatty Acid and Palm Fatty Acid are distinct and separate commodities. (g) The Additional Collector of Customs, Bombay, has also decided in October, 1984 in seven cases of Imports of such goods in Bombay Port that Palm Stearin Fatty Acid is an item distinct and separate from Palm Fatty Acid. (h) The policy cell of the Office of the Chief Controller of Imports and Exports, by a letter dated 21-11-1984 categorically stated that the import of Palm Stearin Fatty Acid has been canalised by Public Notice No. 47 I.T.C. (PN)/83, dated 11-11-1983. (i) Palm Oil is classified under Central Excise Tariff as vegetable non-essential oil attracting duty under Tariff Item 12 whereas Palm Stearin is classified under Central Excise Tariff Item 68. 22.2. It has also been stated that entries in the Schedules and Appendices in the Import-Export Policy are to be strictly construed and there cannot be any intendent nor can anything be added to the entry and only the language of the entry should be considered. It has f....
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.... from the Calcutta High Court, they were granted personal hearing by the Collector on 29-9-1984, but the order was passed by the Collector on 15.9.1984 as would be seen from the date shown on the top of the order-in-original. This indicated that the Collector passed the order before giving personal hearing to the appellants and the subsequent hearing granted on 29-9-1984 was nothing but an eyewash. Passing adjudication order before the personal hearing is contrary to the provisions of Section 124 of the Customs Act, 1962 and violation of the principle of natural justice. On this ground alone the Collector's order should be set aside. 22.4. The learned advocate, in his oral arguments, stated that paragraph 3 of the Collector's order was not correct. Paragraph 13.1 of the Collector's order was also not correct as a letter of credit was opened by the appellants in respect of the impugned goods on 5-5-1983 which was subsequently amended on 23-9-1983 to substitute Stearin Fatty Acid. In the Collector's order, it is mentioned that the contract was dated 2-11-1983 whereas the correct date of entering into contract by the appellants was 15-9-1983. 22.5. He also argued that the appell....
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....dule I to Import (Control) Order, 1955, Section III, Item 15.10 reads as "Fatty Acid, acid oils from refining fatty alcohols." What has been stated in B.T.N. Heading 15.10 is "Fatty Acids" and this terminology has been accepted in Import Trade Control Schedule and Customs Tariff. Imports of the goods in question was not permissible prior to 11-11-1983 because the same fell under Serial No.50 of Appendix 4 of Import Policy. 23.2. Nomenclature is for the purpose of assessment or Import Trade Control Classification. Test report is important to determine nomenclature. In the present case, samples were drawn and tested. Test reports were not challenged by application for retesting. The appellants waived formal show cause notice. Test report was not asked for, nor did they ask for cross examination of the Chemist who tested the samples. The effect of not challenging the test reports is that the authorities were justified in proceeding to act on the basis of the said test reports. Madras High Court's decision in the case of Ramlinga Choodambikai Mills Ltd. v. Government of India and Others (AIR 1975 Madras 217) =1984 (15) ELT 407 is relied upon in this connection. Similarly, Poram Broc....
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....of the powers conferred by this Act, the Imports (Control) Order, 1955 has been issued. Schedule I to the said Order contains the list of articles import of which is controlled. The import of such items is prohibited except (i) under and in accordance with a licence or a customs clearance permit issued under the said Order, or (ii) if they are covered by an Open General Licence (subject to such conditions as may be stipulated), or (iii) if they are covered by the Savings Clause 11 of the Imports (Control) Order........." Central Government issued I.T.C. Order No.1/83 dated 15-4-1983 under Section 3 of the Imports & Exports (Control) Act, 1947 allowing certain articles as specified in the Schedule attached thereto to be imported under Open General Licence, subject to certain conditions as stated therein. Condition (1) of this I.T.C. Order is that the items to be imported are not covered by Appendices 3, 4, 5, 6, 7, 8, 9 and 15 of the Import and Export Policy 1983-84 (Volume-I). Condition (27) says that nothing contained in this licence shall affect the application to any goods, of any other prohibition or regulation, affecting the import thereof, in force at the time when such goods....
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....olicy allows this clearly. Appendlx-10 of the Import-Export Policy, Vol-I contains a list of the items allowed to be imported under O.G.L. and the conditions governing such import. Paragraph 42 at page 153 of the Policy book says that "Nothing in the Open General Licence shall affect the application to any goods, of any other prohibition or regulation affecting the import thereof in force, at the time when they are actually imported." Similar provision has been incorporated in Condition (27) of the I.T.C. Order 1/83. The word "permitted" in the said condition (27) should, therefore, mean permitted for clearance. Item 16 of Part III of the Schedule to O.G.L 1/83 being a residuary item, goods could be imported if they were permitted by the I.T.C. Policy. 23.6. By Public Notice No.47/83 dated 11-11-1983, Palm Acid Oil, Palm Fatty Acid, Palm Kernel Oil, Palm Stearin, Palmitic Acid and soap stock were deleted from Appendix-4, A new paragraph 10 was added to Appendix 9 of the Import Policy 1983-84, with heading "Fatty Acids and Acid Oils". It was stated in that paragraph that import of the following items would be made by the State Trading Corporation of India Limited only under Open ....
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.... reported in 1985 (21) E.L.T. 673 (Cal) should not be followed as there is a contrary judgment of Allahabad High Court in the case of Commissioner of Sales Tax, U.P., Lucknow v. Mango Mal Manak Ram (33-Sales Tax cases page 556) in which it was held that in the common parlance and in commercial sense the word "cement" would include all varieties of cement. In Atma Steels Pvt. Ltd. [1984 (17) E.L.T. 331] this Tribunal did not lay down any proposition and hence this judgement is not applicable to the present cases and the decision is not binding. The learned advocates for the appellants have cited a plethora of past decisions of Supreme Court, High Courts and this Tribunal, but those cannot be applied here as the facts are different. The order of the higher authority is not binding unless it is relevant in facts and law. In the case of Liberty Oil Mills and Others v. Union of India and Others (AIR-1984-SC-1271), past decisions of the Supreme Court, Government of India and the Central Board of Excise and Customs were cited, but the Supreme Court did not consider them to be applicable as the facts were distinguishable. 23.8. A judgement is authority on what it decides, but not what i....
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.... condition (26). Except these two appeals are liable to be dismissed on facts and law. Whether the appeals of M/s Jayant Oil Mills and M/s Kusum Products are sustainable may be considered by this Tribunal on the basis of facts and law, but the other appeals should be dismissed straight away as the condition of opening letter of credit by 29-2-1984 was not fulfilled. 23.12. After Shri Ghosh concluded his arguments, Shri Badsha, stated that Shri Ghosh's argument that all palm products fell in Appendix-4 was not correct in view of the fact that "palm oil (all types, including polyolefin and other fractions)/palm seeds" figured at Serial No. (4) of paragraph 5 in Appendix 9 of the Import Policy. He also stated that the words "In terms of the Import Policy in force" mean import policy on the date 15-4-1983 and not the date of import or clearance as contended by Shri Ghosh. The crucial date was 15-4-1983; what happened after 15-4-1983 was immaterial. Prohibition etc. referred to in paragraph 42 of Appendix-10 means other prohibitions, such as under Section 11 of the Customs Act, 1962, Section 13 of the Foreign Exchange Regulation Act, 1973 and Section 10 of the Drugs and Cosmetic Act,....
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.... scientific or the technical meaning thereof. On this point reliance is placed on the following judgments:- (1) AIR-1967-SC-1454 (para 4) The Commissioner of Sales Tax, Madhya Pradesh v. Jaswaht Singh Charan Singh. (ii) A1R-1972-SC-2551 Minerals and Metal Trading Corporation of India Ltd. v. Union of India. (iii) AIR-1976-SC-2721 = 1978 E.L.T.457 Health ways Dairy v. Union of India (iv) AIR-1977-SC-597-(Para 31) Dun/op India Ltd. v. Union of India (v) AIR-1981 -SC-1079-(Para 4) Indo International Industries v. Commissioner of Sales tax, U.P. (vi) AIR-1985-SC-679 (Para-32) Rathi Khandsari Udyog v. State of U.P. (vii) 1985 (21) E.LT. 668 (Bom.) Union of India and Others v. The Century Spg.andMfg.Co.Ltd., (g) In the case of Indo International it was held that clinical syringes, though made out of (source) glass, were not considered as glassware but as hospital equipment. (h) In any event, the meaning of the term fatty acid as given in the aforesaid Dictionary does not even suggest that the palm (oil) fatty acid is the same as palm stearin fatty acid. Even the respondent is not saying that palm fatty acid ....
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....Respondent in his Order dated 17-11-1983 in the case of M/s Mansingka Brothers (Appeals No.CD/Cal/152/84) that the Deputy Chief Chemist had told him that it was not possible to distinguish in their (Calcutta Custom House) Laboratory whether. the Fatty Acid is derived directly from palm oil or from the fraction of palm oil, i.e.stearin. (e) Opinion of the Chemical Examiner which is attached to the Test Report suffers from the following anomalities. (i) Only physical characteristics like odour and colour have been mentioned without specifying the exact colour. (ii) Admittedly, the standard literature available in the Calcutta Custom House does not mention physic chemical constants of mixed acid derived from palm oil and palm stearin. (iii) The exact iodine value and litre value of the goods in question are not given. (iv) As the description and identity of imported goods are not disputed by the respondents, Poram Brochure is not relevant in determining whether goods in question are covered by the description Palm Fatty Acid. (v) Opinion of the Chemical Examiner is irrelevant for the purposes of construing the description in the im....
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....cting the import of goods under ITC Order No. 1 /83 which are in force at the time when such goods are permitted, i.e. in the instant case on 15-4-1983 itself. In other words, the importer is bound by only such prohibition or regulation which were in force at the time when he acquired the permission to import goods under ITC Order 1/83. (iii) In the instant case, since the Appellants acquired the permission to import the goods in question under ITC Order 1/83 from the very beginning, i.e. from 15-4-1983, they are not affected by any subsequent change or amendment resulting into any prohibition or regulation or otherwise. (iv) The expression "......in force at the time when such goods are permitted....." means at the time when such goods are permitted for Import and not when permitted for clearance since any condition on the clearance of the goods has to be separately imposed by an order under Section 3(3) of the Imports & Exports (Control) Act, 1947. (v) The words ".......In terms of the import policy in force......." mean the import policy in force as on 15-4-1983 since the ITC Order 1/83 being an Open General Licence is governed by the Policy as on the ....
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.... (18) E.L.T. 694] relied upon by the respondent is out of context and can be distinguished on the following grounds :- (i) The main issue in that case was whether order passed by the Customs Authorities could be reviewed by the Import-Control Authorities and rot whether a Public Notice would have the effect of amending an ITC order. (ii) The facts of that case were totally different in as much as the imports made therein were against inter-alia REP licences issued under the provisions relating to registered contracts and the same were also revalidated and endorsed either in terms of para 138 of AM 81-82 Policy or the provisions of para 231 of AM 1982-83 Policy Book. (iii) In that case since the licences themselves were subjected to the particular provisions of the Import Policy by a specific endorsement on the face of the licences and as such the question of imports against the licence being affected by the public notice did not arise at all. (iv) The said judgment has now been stayed by the Hon'ble Supreme Court. (h) The judgment of the Hon'ble Supreme Court in the case of M/s Liberty Oil Mills v. Union of India, reported in AIR-1984-SC-1271 is ....
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....an executive order and not a quasi-judicial adjudication order and as such, the same could not be reviewed by the Central Board of Excise and Customs under Section 129-D (1) of the Customs Act, 1962; and (ii) The order of warning was riot an appealable order. In support of his arguments, the learned advocate Shri Nankani has relied upon the Supreme Court's judgment, reported in AIR-1965-SC-507, in the case of Shankar Lal Agarwal and others v. Shankar Lal Poddar and others and this Tribunal's decision, reported in 1984 (16) E.L.T. 269, in the case of T.G. Merchant & Co. v. Collector of Customs, Bombay. In reply to the arguments of Shri Nankani, the learned Advocate for the appellant has cited the judgment of Calcutta High Court In the case of East Jamuria Co. Pvt. Ltd. v. Collector of Customs, Calcutta (1978-Taxation Law Reporter-1963). He has also stated that the Tribunal's decision is not applicable to the present case as the facts are distinguishable in as much as the appeal in the case of T.G. Merchants Co. Pvt. Ltd. was under Section 129-A (1) whereas the present appeal is under Section 129-D(4) of the Customs Act. 27. Under Section 129-D(1) of the Customs Act....
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..... Once the order becomes a quasi-judicial order, the Central Board of Excise & Customs are within their competence to review the order under Section 129-D(1) of the Customs Act. The judgment of the Supreme Court reported in AIR-1965-SC-507, relied upon by Shri Nankani does not help the base of the respondents. In para 13 of the judgment the Hon'ble Supreme Court held, inter alia one of the tests would be whether the matter which involves the exercise of discretion is left for the decision of the authority, particularly if that authority were a Court and if the discretion is to be exercised on objective, as distinguished from a purely subjective consideration, it would be a judicial decision. It has sometimes been said that the essence of judicial proceeding or of a judicial order is that there should be two parties and a list between them, which is the subject of adjudication, as a result of that order or a decision on an issue between a proposal and an opposition (sic). No doubt, it would not be possible to describe an order passed deciding a list before the authority, that it is not a judicial order but it does not follow that the absence of a lis necessarily negatives the order ....
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....products are obtained by fractionation. The liquid product is called olein and the solid or semi-solid product is known as palm stearin. From palm stearin, palm stearin fatty acid is obtained by hydrolysis process. Palm fatty acid is obtained directly from palm oil. For facility of better appreciation of the arguments of both sides, we would like to summaries their contentions here. The appellants have claimed that the palm fatty acid and palm stearin fatty acid are two separate and distinct commodities. As the "palm stearin fatty acid" does not figure in any of the appendices 3 to 9 and 15 of the Import and Export Policy for 1983-84, Volume-I, the import of the same was permissible under OGL 1/83. The Collector of Customs has held that palm stearin fatty acid is covered by the term "Palm fatty acid" against Sr. No. 50 of appendix-4 of the Import Policy for 1983-84, as palm fatty acid is a generic term and the palm stearin fatty acid is obtained from the source of palm. He has held that prior to 11-11-1983, palm stearin fatty acid was a banned item, being-covered by Sl. No.50 of Appendix-4, and w.e.f. 11-11-1983 this commodity became canalised through the State Trading Corporation ....
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.... House Laboratory. Copies of the test reports were not available in the records placed before us. At the end of the hearing on 12.9.86, we, therefore, asked the learned Departmental Representative to submit copies of the test reports and copy of Poram Brochure. In compliance with our direction, the learned Departmental Representative submitted photo copies of three test reports along with photo copy of the chemical examiner's note dated 28.6 1984 in respect of 3 samples drawn from the consignments covered by appeal No.C-24/85-Cal. Copies of other test reports and copy of Poram Brochure were not submitted to us. From a perusal of the chemical examiner's Note dated 28-6-1984 bearing No.T.M.No. S 43-668/1/84-A, we observe that the contents of the said Note have been incorporated in the relevant paragraphs of the Orders-in-original, as indicated above. During the hearing before us, Shri Nankani has stated that copies of the test reports were not made available to the appellants till the date of hearing and no show cause notice was issued to them as the issue of formal show cause notice was waived. He has stated that he received the copies of test reports during the hearing before us. H....
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..... C-83/85-Cal. S202-(Gr.I)264/84A 9 & 13 5. C-84/85-Cal. S 33-80/84A dated 24-9-1984 8 & 14 6. C-85/85-Cal. S202-Gr I (P)-240/84A dated 26-9-1984 9 and 14 7. C-90/85-Cal. S 33-99/84 (Gr.I) dated 1-10-1984 10 and 14 8. C-91/85-Cal. Gr.I 33-97-98/84 (Gr.I) dated 29-9-1984 10 and 14 9. C-129/85-Cal. S 33-93-94/84A (Gr.I) dated 15-9-1984 9 and 14 In this order dated 17-11-1983 also, which is the subject matter of Appeal No. C-152/84-Cal., Collector has not disputed the fact that the imported goods are stearin fatty acid. As the Collector has not based his findings and conclusion on the test reports and the Chemical Examiner's opinion, the same are of no consequence and the judgment of Madras High Court reported in AIR 1975 Mad-217 is totally irrelevant in the present cases. 35. The text of the Chemical Examiner's Note dated 28-6-1984 is as follows:- "The sample under reference has a pronounced odour of palm oil and responds to colour test for palm oil indicating it to be a product of palm oil origin. In the standard literature available here the physics chemical constants for the mixed....
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....he above, we are not inclined to be guided by the teat reports and the Chemical Examiner's opinion. 37. One of the arguments of Shri Ghosh is that the appellants have not challenged the inference drawn by Collector from Poram Brochure. From the Chemical Examiner's Note dated 28-6-1984, we find that he has mentioned Poram Brochure in the context of the range of iodine value of palm oil. Except this, we do not find that the Collector has placed reliance on Poram Brochure in the adjudication orders of appeals at Serials No. 2 to 10. We do not think that mention of the Poram Brochure helps us in any way in deciding the issue before us. 38. Learned Advocate Shri Ghosh has pleaded that goods imported by the appellants No, 2 to 10 fall within the definition of "Fatty acid" in the Chambers Dictionary of Science and Technology. This definition does not help us in resolving the issue in dispute as it does not say whether palm stearin fatty acid is included in the term "Palm fatty acid" or whether both are one and the same thing. It is not disputed that the imported item is fatty acid, but the appellants have contended that palm stearin fatty acid imported by them is different from the ....
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.... Court that "whether the ore imported is in powder or granule form is wholly immaterial. What as to be seen is what is meant in international trade and in the market by wolfram ore containing 60% or more WO3." Further, in the case of M/s. Rathi Khandasari Udyog etc. v. State of U.P. and Others (AIR-1985-SC-679) it was held by the Hon'ble Supreme Court that "Since the tin 'Khandsari' has not been refined by the Act it must be construed in its popular sense, that is to say, in the sense in which people conversant with the subject matter with which the statute is dealing would attribute to it." In the case of M/s. Dunlop India Ltd. v. Union of India and Others (AIR-1977-SC-597). Hon'ble Supreme Court held that "meaning given to articles in the fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course...... Technical and-Scientific tests offer guidance only within the limits. Once the articles are in circulation and come to be described and known in common parlance, we then see no difficulty for statutory classification under a particular entry". Following the judgments of Hon'ble Supreme Court in M/s. I....
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.... the Collector of Customs, Bombay deal with palm stearin fatty acid. The Directorate General Technical Development (I & EP CELL) Government of India in their letters addressed to M/s. Ashok Industries. Bombay and to M/s. B. Vijay Kumar & Co., as mentioned in sub-paragraphs (ix) and (x) respectively of para 11 of this order stated that stearin fatty acid was not the same as palm fatty acid in manufacturing process and end-use and that palm sterility acid was under O.G.L. as per Import Policy for 1983-84 and 1978-79. According to the provisions of paragraph 242(3) at page 73 of the Import and Export Policy, 1983- 84, Volume I, an actual user could seek clarification from the Directorate General of Technical Development of the Government of India on the scope of any item in Appendices 1, 2, 3, 4, 5, 8, 9, 10, 15 and 30 of the Import Policy. The above clarifications were given by the Directorate General of Technical Development on reference made by the aforesaid two firms. These are clarifications given by the competent authority as prescribed by the Government and the Department has not produced any evidence before us to disprove the authenticity of the same. The Directorate General o....
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....al No. 50 of Appendix-4 of Import Policy 1983-84 and accordingly,, he allowed the goods to be cleared under OGL. The learned advocates have also relied" upon the order-in-original dated 19-10-1984 in the case of imports of palm stearin fatty acid by a number of Importers through Bombay Port in which the Additional Collector of Customs, Bombay held a similar view; The Deptt. did not file any appeal against those two adjudication orders and accepted the decisions. 41. From the evidence produced, we find that (i) The Govt. of India, Ministry of Finance (Department of Revenue), (ii) The Directorate General.of Technical Development, (iii) Chief Controller of Imports and Exports, (iv) State Trading Corporation of India Ltd., (v) The Collector of Customs, Calcutta and (vi) The Additional Collector of Customs, Bombay have treated "palm stearin fatty acid" and "Palm fatty acid" as two separate and distinct commodities. We also find from the adjudication order of the Collector of Customs, Calcutta, cited earlier, that Cochin Custom House was allowing import of palm stearin fatty acid under OGL. It is stated in paragraph 12(b) of Delhi High Court's judgment (AIR 1986 D....
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....or his finding is not correct. It is an admitted tact that stearin fatty acid is derived from palm stearin by hydrolysis process. It is also an admitted fact that palm fatty acid is derived directly from palm oil. After stearin is obtained from the palm oil, it becomes a new commodity different from palm oil. The logical conclusion can draw is that palm fatty acid and palm stearin fatty acid are two separate commodities arising out of two different parents. In the Trade parlance, these two acids are known as two separate and distinct commodities. Accordingly, we hold the view that the palm stearin fatty acid is a separate commodity, not covered by the description palm fatty acid as at Serial No. 50 of Appendix 4 of the Import Policy. 42. The appellants No. 2 to 10 have heavily relied upon the decision of the Hon'ble High Court of Delhi in the case of Kaptan's Enterprises and Another v. Union of India, reported in AIR 1986 Delhi 221. The issue involved in Kaptan's case is exactly similar to that in the cases before us. There also the same commodity, the same OGL 1/83 and the same Public Notice 47/83 were involved. Exactly similar questions as before us, were decided by the Hon'bl....
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....hey must try to settle the matter of conflicting interpretations between different Collectorates at the highest level at the earliest opportunity". In para 5 of the Order No. 107/1986-D, dated 17-2-1986 in the case of M/s. Malted Malsters Ltd., Patiala v. Collector of Central Excise, Chandigarh [1986 7 ECR 233 = 1986 (24) E.L.T. 635 (Tribunal)], this Tribunal held that 'We have given the matter our earnest consideration. We observe that the Delhi High Court judgment is directly on the product - barley malt - which is in dispute before us. We are also told that there is no contrary judgment of any other High Court on this product. In the circumstances, in keeping with the practice of this Tribunal, we are bound to follow the Delhi High Court judgement in the case of Hindustan Petroleum Corporation Ltd. v. Collector of Customs, Bombay [1984 (18) ELT358] this Tribunal held that in the matter of interpretation of all India Statute, the Tribunal is bound by the decision of the High Court under those jurisdiction the office of the Tribunal is situated. In the absence of a decision of such a High Court, the Tribunal is required to follow the decision of any other High Court. If, however, ....
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....ecision of any other High Court amounted to deliberate disobedience and wilful disregard of the High Court and amounted to contempt of Court." In view of this judgment of the Hon'ble Supreme Court and other judgments/decisions indicated above, we have to follow the judgment of Delhi High Court in Kaptan's Enterprises' case as that is a direct judgment on the issue before us and there is no other contrary judgment. 44. Shri Ghosh for the respondent-Collector has argued that the judgment of Delhi High Court in the case of Kaptan's Enterprises has discussed point Nos. (i) and (ii) of paragraph 10 of the judgment, but the High Court did not decide the points. According to him, the observations of the High Court on the two points are by way of obiter and hence this judgment cannot be followed in the present cases. Further, the High Court proceeded on the basis of assumption as indicated in para 11 of the judgment. He has also contended that the judgment is not binding for other reasons, which we have indicated at (a) to (e) in para 23.8 of this order. We have gone through the judgment of Delhi High Court carefully. We find that in para 10 of the judgment the Hon'ble High Cou....
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.... relied upon the judgment of Patna High Court reported in AIR 1938 Patna 22 [Ram Khelawan Sahu v. Shri Bir Surendra Sahi and Others] and Madras High Court's decision reported in AIR 1939 Madras 433 [Annamalai Chattier v. Lakshmanan ChettiarJ. The fact that the Delhi High Court proceeded on the basis of certain presumption about contract, does not affect the above findings. In para 11 of the judgment, High Court has observed that whether the contract had been entered into genuinely and before 11-11-1983 or not is a pure question of fact and this question has to be determined by the appropriate authorities and not by the High Court. The learned Advocate for the respondent cannot, therefore, question the propriety of the High Court's proceeding on the basis of assumption regarding the contract. The High Court is also not precluded from discussing the issues and recording its findings although the Writ Petition may be premature. 45. Amongst the other reasons which Shri Ghosh has advocated in support of his claim that Delhi High Court's judgment is not binding, some are that there was no test report before the High Court and that the dictionary meaning of fatty acid and the Customs T....
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....effect from 5-6-1981 and the State Trading Corporation alone was allowed to import it. The effect of this canalisation was given in the Import Policy for the period April, 1982 to March, 1983 by including the tallow of animal origin in Appendlx-8 which contained a list of items the import of which was canalised through the Public Sector agencies. Thus, the right given under paragraphs 174 and 176 of the import Policy was taken away by paragraph (3) of the Import Policy for 1982-83. The Importer's did not derive that right to import from a statutory ITC order issued under Section 3 of the Imports and Exports (Control) Act, 1947. In the present cases before us, the importers got the right to import under OGL by virtue of the ITC Order No.1/83 dated 15-4-1983 issued by the Central Government under Section 3 of the Imports and Exports (Control) Act, 1947. This statutory right could not be taken away by a non-statutory Public Notice as held in other cases by the Supreme Court, High Courts and the Customs, Excise and Gold (Control) Appellate Tribunal in their judgments/decisions reported in AIR-1966-SC-478, AIR-1986-Del-221, 1981 E.L.T. 235 (Bombay) and 1986 E.L.T. 385 (Tribunal). It was....
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....port Policy on the date 15-4-1983 and not the date of import or clearance of the goods. Shri Badsha has added that normally statutory I.T.C. Order is amended by another statutory I.T.C. Order and then Public Notice is issued on the basis of the amending I.T.C.Order. In support of his argument he has cited ITC Order No. 33/83 and Public Notice No.48/83, dated 14-11-1983 and I.T.C. Order No.29/83 and P.N.No.40/83 dated 21-9-1983, photo copies of which were submitted in the Court. He has stated that in the present cases, no amending I.T.C. Order under Section 3 of the Imports and Exports (Control) Act, 1947 was issued-in respect of palm stearin fatty acid and as such, the Public Notice will have no effect on the import of palm stearin fatty acid from 11-11-1983. The argument of Shri Ghosh for the Department is that by Public Notice No.47/83 import of palm fatty acid and other fatty acids was canalized through the State Trading Corporation of India Limited and as such, the Appellants No. 2 to 10 were not entitled to import palm stearin fatty acid under O.G.L from 11-11-1983. In support of his argument Shri Ghosh has relied upon the judgment of Punjab and Haryana High Court in the case ....
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....ion 3 to prohibit the import of any article, but that can only be done by an order published in the official Gazette by the Central Government under Section 3. (iii) In paragraph-22 of the judgment in the case of Lokash Chemicals Works v. M/s. Mehta, The Collector of Customs (Preventive) Bombay and Others, decided on 29-4-1980 and reported in 1981 E.L.T. 235 (Bom.), Bombay High Court observed as follows; 'The right to carry on business of import is restricted by law contained in the Imports and Exports (Control) Act, 1947 and Imports (Control) Order, 1955 and any executive action or direction or instruction which seeks to control such right must necessarily have its foundation in one or other provision of the said Act and Order. I do not find any support for the aforesaid action in the said Act or the Order. Mr. Dalal did contend that such a Public Notice has its foundation in Section 3 of the Act and in Clauses 6, 7, 8, 8A, 10B and 10C of Order and in the conditions of the licence itself. The particular condition which Mr. Dalal relied on is the condition mentioned on the face of the licence to the effect that the licence is without prejudice to the application o....
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.... of HES Limited v. Collector of Customs, Bombay reported in 1986 (25) E.L.T. 385, this Tribunal held that: "There cannot be any quarrel as to the proposition that it is the prerogative of the Government to change the Policy and it could even take away the rights conferred under the licences issued prior to the date of change of the policy, but in order to take away the rights conferred under the licences, the Government shall have to issue notification or orders in exercise of the powers conferred under the Import/Export Control Act or Import Control Order. Public Notice or even the Policy having no statutory force, the right vested in the licence under the validly issued licence cannot be taken away. What the licensee is exercising is not the rights conferred under the policy but the right conferred under the licence, therefore, by merely changing the policy by non-statutory orders the rights conferred under the licence cannot be divested." (vi) In the case of Union of India and Others v. Anglo Afghan Agencies (AIR 1968-SC-718), the Supreme Court held as follows:- "We are unable to accede to the contention that executive necessity releases the Government....
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....the Government that having regard to the facts as they have subsequently transpired, it would be inequitable to hold the Government to the promisee made by it, the Court would not raise any equity in favour of the promise and enforce the promise against the Government The doctrine of promissory estoppel would be displaced in such a case because, on the facts, equity would not require that the Government should be held bound by the promise made by it. When the Government is able to show that in view of the facts which have transpired since the making of the promise, public interest would be prejudiced if the Government were required to carry out the promise, the Court would have to balance the public interest in the Government carrying out a promise made to a citizen which has induced the citizen to act upon it and alter his position and the public interest likely to suffer if the promise were required to be carried out by the Government and determine which way equity lies. It would not be enough for the Government just to say that public Interest requires that the Government should not be compelled to carry out the promise or that the public interest would suffer if the Government ....
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....ed that"...... in modern times, the export and import policy of any democratic State is bound to be flexible. The needs of the country, the position of foreign exchange, the need to protect national industries and all other relevant considerations have to be examined by the Central Government from time to time and rules in regard to Export and Import suitably adjusted. It would, therefore, be idle to suggest that there should be unfettered and unrestricted freedom of export and import or that the policy of the Government in regard to export and import should be fixed and not changed according to the requirement of the country." It was also observed by the Hon'ble Supreme Court in paragraph of the judgment reported in AIR-1961 S.C. 1514 in the case of Glass Chatons Importers and Users Association and Others v. Union of India that "a policy as regards imports forms an integral part of the general economic policy of a country which is to have due regard not only to its impact on the internal or international trade of the country but also on monetary policy, the development of agriculture and industries and even on the political policies of the country involving questions of frie....
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....ses as the abeyance order in that case was a statutory order, whereas in the present cases before us the right to import under OGL conferred by a statutory Order (I.T.C. Order No. 1 /83 dated 15-4-1983) was sought to be taken away by Public Notice No.47/83 dated 11-11-1983 which had no statutory backing. The judgment in Liberty Oil Mills's case is not, therefore, applicable to the present cases. 50. It is not the contention of the Appellants No.2 to 10 that the Government cannot change the import policy according to the needs of the country or that the people have unrestricted power to Import. What they have contended is that the right conferred by a statutory order to import can not be taken away by a Public Notice which has no legal force. This view has been held by the Hon'ble Supreme Court and Bombay High Court in very clear terms in the judgments mentioned in paragraphs 48(ii) and (iii) (supra). Same view has been held by Delhi High Court in the case of Kaptan's Enterprises, which we have quoted in sub-para (iv) of paragraph 48 (supra). We are bound by the decisions of Supreme Court and High Courts. We cannot held a different view. This Tribunal already held a similar view ....
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....to that statute instead of setting out for itself at length the provisions which it desires to adopt. Once the incorporation is made, the provision incorporated becomes an integral part of the statute in which it is transposed and thereafter there is no need to refer to the statute from which the incorporation is made and any subsequent amendment made in it has no effect on the incorporating statute. Lord Esher, M. R.while dealing with legislation by incorporation in In re. Wood's Estate (1886) 31 Ch.D. 607 pointed out at page 615: "If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the new Act just as if they had been actually written in it, and, the moment you have those clauses in the later Act, you have no occasion to refer to the former Act at all." Lord Justice Brett also observed to the same effect in Charke v. Bradlaugh, (1881) 8 QBD 63 at 69: "...... There is a rule of construction that, where a statute is incorporated by reference into a second statute the repeal of the first statute by a third statute does not affect the second." ....
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....ion 3 of the Imports and Exports (Control) Act, 1947. As this was not done, the Public Notice, which had no legal force, could not amend that I.T.C. Order and as a result, stearin fatty acid continued to be under Open General Licence covered by the I.T.C. Order even after issue of the Public Notice on 11-11-1983. This view is supported by the ratio laid down in the decisions of the Supreme Court, High Courts and this Tribunal, cited in paragraphs 48(i),(ii),(iii),(iv),(v) and (vi) and the Supreme Court's judgments quoted above. Shri Badsha has brought to our notice I.T.C. Order No.33/83 and Public Notice No.48/83 both dated 14-11-1983 and I.T.C. Order No.29/83 and Public Notice No.40/83 both dated 21-9-1983. We find that by I .T.C. Order No.33/83 dated 14-11-1983 issued under Section 3 of the Imports & Exports (Control) Act, 1947 Open General Licence No.1/83 dated 15-4-1983 was amended by deleting, inserting and amending certain entries of the Schedule to the OGL 1/83, and those amendments were reflected in the Public Notice No.48-ITC(PN)/83 dated 14-11-1983. Similarly, by I.T.C. Order No.29/83 dated 21-9-1983 issued under the said Section of the Act, Entry No. 14 of Part III of th....
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....nder the Import Policy governing the licence and whether such goods have been imported within the time prescribed by the import policy. 15. In this connection an order of the Central Board of Excise and Customs in Customs Appeal being Order No. 721 A of 1981 may be referred to. It has, inter alia, been held in the said order by the Board as follows: "The Board has considered the different contentions of the appellants. The Board finds that I.T.C. Public Notice No.29/81 of 5-6-1981 canalising the importation of tallow of animal origin as imported in this case has been issued for the policy period April, 1981 to March, 1982. The licences in question have, however, been issued during the period 1980-81. The Board also observes that the earlier orders of the Board cited by the appellants contain clear findings which are binding on the subordinate authorities that the licence issued during a policy period is governed by that policy as amended up to the date of issue of the licence and amendments made, after the date of issue do not have any application to the licences. The Board is also in agreement with the contention of the appellants that the Additional Collector wa....
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.... held that if the petitioner firm had entered into a contract on 7-10-1963, then the right to import, though liable to statutory changes, cannot be taken away to the petitioner's detriment except by another statutory instrument. In Moti Lal Padampat Sugar Mills case (AIR-1979-SC-621), the Hon'ble Supreme Court, while holding that the government is not immune from the applicability of promissory estoppel, has observed that the doctrine of promissory estoppel is an equitable doctrine. If it can be shown by the government that having regard to the fact as they have subsequently transpired, it would be inequitable to hold the Government to the promise made by it, the Court would not enforce the promise against the Government. Shri Ghosh for the respondent Collector has also relied upon Delhi High Court's judgment in the case of Indo Foreign Commercial Agency (Produce) Pvt. Ltd. v. Union of India and Others (AIR-1976-Delhi-4). According to that judgment, the principle of promissory estoppel would not apply to the policy action by the Government. Relying on the judgment of the Supreme Court reported in AIR-1980-SC-1149 (M/s C. Damani & Co. v. Union of India and Others) Shri Ghosh has mad....
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....ion of Shri Ghosh is not tenable. Shri Ghosh has also broadly stated that the plethora of past decisions cited by the appellants cannot be applied to the present cases as the facts are different, but he has not specifically argued to bring out the distinguishing features of these cases, except the very few mentioned above in this paragraph, and has not also stated why the ratio laid down therein should not be followed in the present cases, although it was open to him to do so. We cannot brush aside the ratio lay down in the various decisions of the Supreme Court and High Courts simply on the basis of a vague statement that the facts are different. In the case of B. Shama Rao v. Union Territory of Pondichery (AIR 1967 S.C.1480), the Hon'ble Supreme Court laid down an important proposition, which cannot be overlooked by us. The proposition was laid down in paragraph 5 of the judgment, an extract of which is given below for ready reference: "It is trite to say that a decision is binding not because of its conclusion but in regard to its ratio and the principle laid down therein." In the judgments reported in AIR 1967 S.C.1454, AIR 1972 S.C.2551, AIR 1976 S.C. 221, AIR 1977....
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.... 55. We have decided questions No.(i) and (ii) of paragraph 30(supra) in the affirmative. We shall now examine question No.(iii). Out of the various conditions enumerated in I.T.C. Order No.1/83 dated 15-4-1983, conditions No.1, 22, 26 and Note-1 below Part-III of Schedule to this I.T.C. Order are important and relevant in these cases. Although arguments have been addressed by the learned Advocates of both sides on condition No.27, we do not consider this condition relevant to the present cases as prohibition or regulation imposed under any other law in force is not involved in these cases. Hence, we are not going to discuss this condition and arguments addressed by the learned Advocates thereon. So far as the Note-1 below Part III of Schedule to the I.T.C. Order is concerned, the only significant aspect of this Note is reference to Appendices 3 to 9 and 15, and the clarification contained in Chapter-22 of the Import and Export Policy, 1983-84. It has been clarified in the said Note that the items which do not appear in Appendices 3 to 9 and 15 of the Import Policy, 1983-84, could be imported under Open General Licence in terms of I.T.C.. Order No.1/83 Condition No.1 of the I.T.C. ....
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....he stipulated period of time and as such, they are precluded from arguing on merits at this stage. It is a fact that the respondents did not file any cross-objection. They filed a "reply affidavit to appeal filed by the appellant". We, therefore, agree with the learned Shri Ghosh that the respondent cannot now argue on merits of this particular case. However, we have to examine the merits of the case as the Department has filed an application under Section 129-D(4) of the Customs Act, 1962 against the order dated 17-11-1983 passed by the Collector of Customs, Calcutta. While deciding this appeal, we are to see whether the importation was authorised and permissible under I.T.C. Order 1/83. The Collector has held that importation of the goods, viz. stearin fatty acid, was unauthorised for the reasons stated in his order. In this case, the goods were imported before 11-11-1983. We have also held earlier in this Order vide paragraph 46 (supra) that stearin fatty acid could be imported under O.G.L. prior to 11-11-1983. As such, the importation of the goods was not unauthorised. Accordingly, the question of imposition of penalty and fine in lieu of confiscation does not arise. In this ap....
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....as not been met by the learned counsel for the respondent-Collector However, we have allowed this appeal on merits. 60. In Appeal No.C-36/85-Cal, the appellants M/s H. Kumar & Brothers, who are actual users, entered into a contract with M/s Hardial Enterprises Pvt. Ltd., Singapore for import of "Split Stearin Fatty Acid" on 24-10-1983. On 18-2-1984 they approached Andhra Bank for opening letter of credit, but the bank refused to open the same on the ground that the item had been canalised in the mean time. On 22-3-1984, the appellants moved Calcutta High Court and obtained interim order in pursuance of which letter of credit was opened on 2-5-1984. The goods were shipped on 3-5-1984, 19-5-1984 and 30-5-1984. In Appeal No.C-37/85-Cal (M/s Chawla Soap Factory v. Collector of Customs, Calcutta), the facts were similar to those in Appeal No.C-36/85-Cal except that the appellants requested their bank for opening the letter of credit on 10-2-1984 and the same was opened on 21-4-1984. In the cases of these two appeals, condition (26) of the I.T.C.Order 1/83 was not fulfilled. The argument of Shri Nankani that the condition of opening letter of credit by 29-2-1984 is deemed to have been....
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....OGL was, therefore, unauthorised. Goods were liable to confiscation under Section 111 (d) of the Customs Act and the importers were liable to penalty under Section 112 of the Act. In the result, these seven appeals are to be dismissed on merits. We order accordingly. 64. Regarding fine and penalty, the learned Advocates for the appellants have argued that there was no mala fide on the part of the appellants, nor has any mens rea been alleged in the matter of importation of the goods in question and that there was practice of clearing stearin fatty acid under O.G.L in Calcutta, Bombay and Cochin Custom Houses. The adjudication orders passed by Shri T.S. Swaminathan, Collector of Customs, Calcutta and Shri S. Biswas, Additional Collector of Customs, Bombay releasing the goods under O.G.L. were instances in the matter. It has been contended that no confiscation should have been ordered and no fine and penalty should have been imposed in these cases and that if any penalty was at all required to be imposed, only nominal penalty should have been imposed on the appellants. The Collector has not followed any uniformity In the quantum of redemption fine and penalty. He has not given any....
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....rovided the import is contrary to any prohibition imposed by or under this Act or any law for the time being in force." The judgment of Calcutta High Court, reported in 1986-(9)-ECC-374(Cal) in Collector of Customs, Calcutta and Others v. Udey Engineering Enterprises and Others,was cited by Shri Nankani in support of token penalty. The judgment of Andhra Pradesh High Court in Gyanoba Yaswant Jadav v. The Collector of Central Excise, Hydria and Others (AIR-1974-Andhra Pradesh-76) was relied upon by the appellants in support of the argument that the Collector should not have imposed penalty and fine arbitrarily without giving any reason and there was no uniformity in their quantum. 67. The judgments relied upon by the appellants do not help them. The decision of this Tribunal and the judgments of Supreme Court referred to in the preceding paragraph say that no penalty is to be imposed when the infringement of law is not deliberate. In the seven cases mentioned in paragraph 63 (supra) unauthorised importation was deliberate. The appellants in these seven appeals were aware that in case of shipment of the goods after 31-3-1984 opening of letter of credit on or before 29-2-1984 again....
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....on imposed, or that it had none, and in that view chose the more onerous of the two penalties provided, then only a superior court may remit the case and ask the authority to exercise the discretion according to law. When there are no such indications the discretion exercised by the authority should not be interfered with." 68. In Appeals No.C-36/85-Cal (M/s H. Kumar & Brothers) and C-37/85-Cal (M/s. Chawla Soap Factory), the appellants imported three consignments of stearin fatty acid. As copies of the relevant bills of entry were not submitted before us, we have complied the total weight and declared C.I.F. value of the goods from the relevant impugned orders of the Collector and the same are 499.240 M/Tons and Rs. 24,28,735.14 respectively in both the cases. The goods arrived on 25-5-1984, 28-5-1984 and 30.5,1984. Shri Badsha, learned Advocate stated during the hearing that the effective rate of Customs duty on stearin fatty acid upto 19-6-1984 was 15% ad valorem and from 20-6-1984 the rate became 100%. In the absence of the bills of entry, we could not ascertain the actual assessable value and the duty actually paid. We have, therefore, applied 15% ad valorem to the C.I.F. v....
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....pproximately). 70. In Appeal No. C-84/85-Cal, the declared quantity and C.I.F. value of the goods were 2005.727 M/Tons and Rs. 79,03,996.68 respectively. Goods were shipped on 26-6-1984. Following the above formula the market price comes to Rs. 1,92,22,887.00 (approximately). Deducting of the C.I.F. value and customs duty at 100%, we get an approximate margin of profit of Rs. 34,14,894.00. Therefore, even after paying redemption fine of Rs. 16,00,000/- and penalty of Rs. 2,00,000/-, the appellants will have a net gain of Rs. 16,14,894.00 (approximately). 71. In Appeal No.C-85/85-Cal, appellants imported two consignments of stearin fatty acid having total net weight of 2473.836 M/Tons. Declared C.I. F. value of two consignments was Rs. 95,20,446.87. The goods were shipped to India on 9-6-1984 and 28-6-1984. Adopting the market price quoted by the State Trading Corporation as indicated above, the market value of the goods comes to Rs. 2,37,09,244.00 (approximately). Shri Badsha stated that duty was assessed at 100% ad valorem. The total of C.I.F. value and duty, therefore, come to Rs. 1,90,40,893.00 (approximately). This leaves a margin of profit of Rs. 46,68,350.00 (approximat....