TaxTMI 
TaxTMI 
1995 (8) TMI 333
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....ade by the High Court, and upon hearing the arguments of Mr. Habibullah Basha, Senior Counsel for Mr. E.S. Govindan, Advocates for the Petitioner in both the petitions and of Mr.V.T. Gopalan, Senior Counsel for Mr. A. Ramakrishna Reddy, Additional Central Government Standing Counsel on behalf of the Respondents in both the Petitions, the Court made the following order :- W.P. No. 7907 of 1984 : In W.P. No. 7907 of 1984, the prayer of the Petitioner is to issue a Writ of Certiorarified Mandamus, calling for the records before the third respondent ending with the show Cause Notice No. S8/185/84-SIB dated 20-7-1984 SIB-70/84 issued by the Fourth respondent, quashing the same and direct the third respondent not to proceed with the adjudication. W.P. No. 7908 of 1984 : In W.P. No. 7908 of 1984, the prayer of the petitioner is to issue a Writ of Certiorarified Mandamus, calling for the records before the first respondent ending with the Public Notice No.44-ITC(PN)/83 dated 17-10-1983 quashing Para 3 of the Public Notice in so far as it compels the shipment within 90 days from the date of Public Notice and direct the respondent not to give effect to Para....
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.... Licence, which requires a specific licence, under the Import and Export Control Order, under the concerned Authority, Clause 3 of the said Public Notice, mentioned above, reads as follows: "...REP Licences/Additional licences held by Export Houses and Trading Houses shall cease to be valid for import of Acetic acid, Ethyl Acetate, Isoborneol, threading taps 1.6 mm to below 3.0 mm dia and lead alloys, referred to at S. Nos. (1), (2), (3), (5) and (19) in para 2 above except to the extent permissible under the relevant provisions of Import and Export Policy 1983-84 as per the amended policy of these items. This restriction will not apply to imports covered by irrevocable letters of credit opened and established before the date of this Public Notice as per the Policy in force, against which shipment of goods is made within a period of 90 days from the date of this Public Notice. This facility of import against irrevocable letters of credit already opened will also be available to eligible importers for import of Isoborneol and threading taps 1.6 mm to below 3.0 mm dia under Open General Licence as in force before the date of this Public Notice..." As soon as the Petitioner came....
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....ave to be transhipped. It is further stated in the affidavit, that the Letter of Credit had provided for the shipment at Hong Kong. It is submitted by the Petitioner that the Public Notice is void, that it has no effect, that the third respondent, viz. the Collector of Customs, Madras-1 has no jurisdiction to issue the show cause notice and that therefore, it is violative of Art. 14 and 19(1)(g) of the Constitution of India. Aggrieved by the impugned show cause notice, the Petitioner has approached this Court praying for the issue of a writ of certiorarified mandamus, calling for the records before the third respondent in Show Cause Notice No.S8/185/84-SIB dated 20-7-1984 issued by the  SIB-70/84 fourth respondent, to quash the same and to direct the third respondent not to proceed with the adjudication. 5. A counter-affidavit has been filed on behalf of the respondents stating that the impugned notice is valid and is in accordance with law. Extracting Paragraph 255(1) of the Import and Export Policy for 1983-84, it is stated in the counter-affidavit that Para 255(1) of the Import and Export Policy for 1983-84 does not refer to the items which were ear....
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....ublic notice had no retrospective effect. The plea raised by the petitioner on the question of estoppel is stoutly opposed in the counter-affidavit, stating that the alleged assurance of the Government in view of the opening of the Letters of Credit is not taken away and that it only adds that the shipment should be done within 90 days from the date of Public Notice. 6. Mr. Habibullah Basha, the learned Senior Counsel contended that (1) the Public notice cannot amend the statutory provision issued under Section 3 of Imports and Exports (Control) Act, 1947, (2) that Public notices or Rule will have no retrospective effect, and (3) that the respondents are bound by the doctrine of promissory estoppel as given in the Import and Export policy for the year 1983-84, followed by a notification issued Under Section 3 of the Imports and Exports Control Act, with regard to Isoborneol. 7. On the other hand, Mr.V. T. Gopalan, learned Senior Central Government Standing Counsel appearing on behalf of the respondents, submitted that the Public notice, dated 17-10-1983 is valid and in accordance with law. The learned Senior standing Council, further submitted that the Public notice....
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....has been observed thus : "...the second question that arises is regarding the effect of the public notice dated 11-11-1983. On behalf of the petitioners, two points are made. One, relying on the decision of the Supreme Court in East India Commercial Company v. Collector of Customs (A.I.R. 1962 SC 1893) and of this court in Bansal Exports Private Limited v. Union of India (A.I.R.1983 Delhi 4450) is that the public notice of 11-11-1983 being only an administrative circular or instruction has no statutory force (vide paragraphs 31 to 33 of the above Supreme Court Judgement) and cannot override or obliterate the right of import available to traders under OGL 1/83..... We are of the opinion that the petitioner's right to import the goods in question under OGL did not cease on 11-11-1983. If, as we have held, the original import policy announced for 1983-84 coupled with OGL 1/83 entitled the petitioner to import `Stearin Fatty Acid' under OGL and again, as we assume, if the petitioner firm had placed firm contracts with the third respondent for the import of these goods on 7-10-1983 itself that right of import is no doubt liable to statutory changes but cannot be taken away to the ....
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....s beyond the powers of the rule making authority." In M/s. Bharat Barrel and Drum Manufacturing Company (P) Limited v. The Collector of Customs (AIR 1971 S.C. 704) it is observed thus :- "(A) Imports and Exports (Control) Act (1947), Section 3 Iron and Steel controller's Public Notice No. 1/1-3/62, dated 6-12-1962 is not retrospective. Hence condition that sheets imported must be of `Prime Quality' cannot apply to sheets imported under licences issued before 6-12-1962". In Union of India v. Kanunga Industries (A.I.R. 1990 S.C. 2190 at 2191) it has been observed thus:- "Thus it would be clear that it is by the correction that the strips were brought within the prohibited items. There is no dispute that in the meanwhile the respondent had already contracted with the foreign parties for the import of the strips and, therefore, the goods were authorised on the date they were contracted for.... We have pointed out that in 1967 the relevant entry was `stainless steel of any specifications" whereas in 1968 it was `stainless steel sheets/plates/strips/ circles of any specifications. The erratum only brought the situation to the 1968 position. It is also for this reason that ....
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.... estoppel. We find it difficult to understand [how] a Bench of two Judges in Jeet Ram's case could possibly overturn or disagree with what was said by another Bench of two judges in Motilal Sugar Mills Case. If the Bench of two Judges in Jeet Ram's case found themselves unable to agree with law laid down in Motilal Sugar Mills Case, they could have referred Jeet Ram's case to a larger Bench, but we do not think it was right on their part to express their disagreement with the enunciation of the law by a Co-ordinate Bench of the same Court in Motilal Sugar mills. We have carefully considered both the decisions in Motilal Sugar Mills case and Jeet Ram's case and we are clearly of the view that what has been laid down in Motilal Sugar Mills case represents the correct law in regard to the doctrine of promissory Estoppel and we express our disagreement with the observations in Jeet Ram's case to the extent that they conflict with the statement of the law in Motilal Sugar Mills case and introduce reservations cutting down the full width and amplitude of the propositions of law laid down in that case. Mr. V.T. Gopalan, the learned Senior Central Government Standing Counsel in suppo....
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....in Liberty Oil Mills and others, v. Union of India (1984 3 S.C.C. 465), in support of the above contention. He further referred to Serial No. 61, in Appendix 3, Import and Export policy for the year 1983-84 which reads as follows :- "...61. Borneol and its esters including bornyl acetate." He contended that Isoborneol is a derivative of the chemicals described therein and in the public notice it was removed from the OGL list to the prohibited item. 11. With regard to the contention namely, the Public Notice dated 17-10-1983 has to be read as one issued under Section 3 of the Import and Export Control Act and not as a change in policy, but as a change in the statutory order, the learned senior central Governemnt standing counsel cited the ruling of the Supreme Court in Joint Chief Controller of Imports and Exports v. M/s. Aminchand (A.I.R. 1966 SC 478) wherein it is observed thus: "Now there is no doubt that it is open to the Central Government, under Section 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. The High Court has found that no such order under S. 3 ....
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....t and Export Policy 1983-84 as per the amended policy of those items. This restriction will not apply to imports covered by irrevocable letters of credit opened and established before the date of this Public Notice as per the policy in force, against which shipment of goods is made within a period of 90 days from the date of this public notice. This facility of import against irrevocable letters of credit already opened will also be available to eligible importers for import of Isoborneol and threading taps 1.6 mm to below 3.0 mm dia under Open General Licence as in force before the date of this Public Notice." He further submitted that the Central Government has given adequate time, namely, 90 days from the date of Public Notice for those who have opened the Letter of Credit before the Public Notice was enforced and therefore, it was the duty of the petitioner to have made arrangements for the shipment of the goods within 90 days from the date of the issue of the Public Notice, and that the petitioner having failed to utilise the said 90 days, is not entitled to invoke the doctrine of promissory estoppel, on the facts and circumstances of the case. 13. I have carefully ....
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.... when there is a conflict between executive public notice announcing a change in the policy and the statutory order passed by the Central Government, in exercise of power under Section 3 of the Import and Export Act, 1947, the statutory order issued under 3 or the Act alone will prevail. 16. The crux of the matter with regard to the first submission of the learned Senior counsel for the petitioner and the respondents is that when there is a conflict between an executive public notice changing the policy of Import and Export and a statutory order issued by Central Government, in exercise of the power under Section 3 of the Act, which is to prevail? 17. In a decision of the Supreme Court in Union of India v. Anglo Afghan Agencies (A.I.R. 1968 SC 728), the Supreme Court has emphatically pointed out thus : "The order which Central Government may issue in exercise of the power conferred by Section 3 of the Import and Export Control Act, 1947 may be executive or legislative." It is clear from the above ruling of the Supreme Court that the power conferred under Section 3 of the Import and Export Control Act, 1947 may be executive or legislative depending upon whether....
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....id infringement does not attract S. 167(8) of the Sea Customs Act." The learned Standing Counsel for the Central Government was not in a position to produce any order passed under Section 3(3) of the Act, whereby it has amended the Schedule to the OGL Order. On the other hand, the learned Senior Counsel for the petitioner produced OGL No. 1/83 which is an order passed by the Central Government in Exercise of the power conferred under Section 3(3) of the Import and Export Control Act, 1947 and therefore, it is an exercise of the subordinate legislative power of the Central Government with regard to the items given in OGL, mentioned above. No doubt the policy can be amended and the public notice has to be read as the exercise of executive power amending the Public Policy. However, the same was not followed by the issue of an order under Section 3 of the Act to amend OGL No. 1/83. 18. It is the submission of Mr. Habibullah Basha, that this is an order passed in exercise of subordinate legislative power, namely in exercise of Section 3 of the Imports and Exports (Control) Act, 1947 and therefore, it has a statutory force. The said order in item No. 22 states that items cover....
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....83. 20. In this connection, Mr. V.T. Gopalan, learned Senior Central Government Standing Counsel referred to the ruling of the Supreme Court in Darshan Oils Private Limited v. Union of India (1995 1 SCC 345) wherein the Supreme Court has observed that the `Import and Export Policy for the period from 1-4-1983 to 31-3-1984 was declared by Central Government by order under Section 3 of Import and Export (Control) Act, 1947' and contended that the Public Notice dated 17-10-1983 has equal force as the order made under Section 3 of Import and Export (Control) Act, 1947. I am unable to accept the said contention of Mr. V.T. Gopalan. There is no controversy that in the instant case, the Open General Licence order No. 1 of 1983 as well as the Public Notice, dated 17-10-1983 has been issued by the Central Government in exercise of the power conferred under Section 3 of the Imports and Exports (Control) Act, 1947. Further, the point for consideration is what is the nature of the power that has been exercised by the Central Government. It is clear from the wording of the Open General Licence Order No. 1 of 1983 that the said order has been passed in exercise of the power coferred unde....
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....elhi 221) has observed as follows :- "The second question that arises is regarding the effect of the public notice dated 11-11-1983. On behalf of the petitioners, two points are made. One, relying on the decision of the Supreme Court in East India Commercial Company v. Collector of Customs - AIR 1962 SC 1893 = 1983 (13) E.L.T. 1342 (S.C.) and of this court in Bansal Exports P. Ltd. v. Union of India - AIR 1983 Delhi 445 is that the public notice of 11-11-1983 being only an administrative circular or instruction has no statutory force (vide paragraphs 31 to 33 of the above Supreme Court Judgment) and cannot override or obliterate the right of import available to traders under OGL.1/1983. The second is that, even if it has the same effect as a law or statutory notification it will be applicable only in respect of imports made into India after 11-11-1983 otherwise than in pursuance of a firm commitment or contract entered into by the importer before that date. It is urged that the announcement of the import policy coupled with OGL No.1/1983 in respect of the financial year 1983-84 amounts to a promise or representation to the public in general that imports will be permitted subject....
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....m of the considered view that when there is a conflict between the exercise of the subordinate legislative power exercised under Section 3 of the Imports and Exports (Control) Act, 1947 and the executive Power, the order in exercise of the Subordinate Legislative power will prevail. Further, the Public Notice, dated 17-10-1983 has no legal effect of amending the O.G.L. Order No. 1/83. 32. With regard to the second contention of Mr. Habibullah Basha the learned Senior Counsel for the petitioner, it is submitted that in any event, the Public Notice will have no retrospective effect. In this connection, the learned senior counsel for the petitioner, Mr. Habibullah Basha cited the following rulings of the Supreme Court in the case of the Cannanore Spinning and Weaving Mills Limited v. The Collector of Customs and Central Excise, Cochin and Others [1978 (2) E.L.T. (J 375) (S.C.) = A.I.R. 1970 SC 1950] and in M/s. Bharat Baprel and Drum Manufacturing Company Private Limited v. The Collector of Customs, Bombay and Another (A.I.R. 1971 SC 704) and in Union of India and Others v. Kanunga Industries (A.I.R. 1990 SC 2190). It is clear from the above rulings that notifications will hav....