TaxTMI 
TaxTMI 
1990 (11) TMI 145
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...., whether edible or non-edible, import will be made by the State Trading Corporation (STC)/Hindustan Vegetables Oil Corpn., New Delhi (A Govt. of India Undertaking) under Open General Licence on the basis of foreign exchange released by the Government in its favour, imports, distribution and their pricing will be made by the State Trading Corp./Hindustan Vegetables Oil Corp., New Delhi as per the connected policy of the Government in the Ministry of Food & Civil Supplies, Deptt. of Civil Supplies." Out of the 9 items under this head, we are concerned with Sl. No. 4 which provides as under :- Palm oil (all types including Palmolein and other fractions)/Palm seeds. Thus according to the above provision Palm seeds were canalised items falling under Appendix 5B of the said Policy. The Imports & Exports (Control) Act, 1947 empowers the Central Government to prohibit, restrict or otherwise control imports and exports. In exercise of the powers conferred in the above Act, the Imports (Control) Order, 1955 has been issued. Schedule I(1) to the said Order contains the list of articles of which imports are controlled. The import of such items is prohibited except : (i) under and in accord....
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.... a short-landing to the extent of 888.738 MT." Thus we take this figure of 10681.832 MT as correct. 5.Since the Customs authorities professed to the appellant not to clear the goods it filed a Writ Petition No. 3265 of 1987 before a Single Judge of the Calcutta High Court. Learned Single Judge passed an interim order in favour of the appellant on 28-7-1987. The interim order was granted in terms of prayers (e) & (f) of the petition, on certain conditions. The above order dated 28-7-1987 was modified on 3-8-1987 to the extent that the interim order was granted on the condition that the appellant shall pay the entire customs duty as may be determined and demanded by the respondents in cash and shall furnish a bond for the entire value of the goods. The Order for furnishing bank guarantee was recalled. It was made clear that the Customs authority shall not release the goods unless the entire customs duty as may be determined and demanded by them was fully paid by the appellant in cash. The Collector of Customs filed an appeal before the Division Bench against the aforesaid order. 6. The Division Bench of the Calcutta High Court on 18-9-1987 passed the following order :- "We direct....
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....or of Customs and in the pending writ petition." 8.The Collector of Customs by adjudication order passed on 7-12-1987 held that the item "Palm Kernel" was prohibited item for import except through canalisation by the State Trading Corporation in terms of the Import Policy, and, consequently the import of 11,570.570 MT of Palm Kernel of Nigeria origin valued at Rs. 2,88,88414/cif value without a valid licence was in contravention of the provisions of Section 3(i)(a) of the Customs Act read with Section 3(ii) of the Imports & Exports (Control) Act, 1947. The Collector in these circumstances directed the confiscation of the entire goods and gave the importer an option to redeem the goods on payment of a fine of Rs. 90 lacs. The option was to be exercised within one month of the order. The Collector also imposed on the importer i.e. the appellant a personal penalty of Rs. 10 lacs in terms of Section 112(a) of the Customs Act. On 17-12-1987 the appellant exercised its option within the aforesaid period of one month and took delivery of part of the goods of 3935.360 MT on payment of personal penalty of Rs. 10 lacs and also part payment of the redemption fine to the tune of Rs. 35 lacs. ....
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....usand tons approximately without payment of duty. We have held that they are liable to pay duty. This amount of duty to be paid is to be ascertained and the said sum is to be adjusted against Rs. 90 lacs and Rs. 10 lacs respectively. The balance amount shall be held by them for a period of two months from this date. The writ petitioner shall be entitled to get delivery of the balance goods on payment of duty at the rate prevailing in October, 1987 or upon adjustment with the balance of the month. But, if, they do not do so within a period of two months, then respondents shall be entitled to proceed in accordance with law. We make it clear that the goods must be cleared by the Customs authorities and allowed to be taken delivery of, within 72 hours from the time of depositing of the amount of duty in respect of the goods to be cleared alongwith payment of charges and expenses in accordance with law. So far as the question of interest is concerned, in the facts and circumstances of the case we are not inclined to grant any interest. We also make it clear that in respect of the balance goods allowing, the writ petitioner shall be entitled to clear the same at one time or from time ....
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....s and 11,570.570 MT of Palm Kernel having been shipped by the foreign seller from Nigeria on or before 27-7-1987, the appellant was legally entitled to import the same under the OGL. Mr. Sen frankly conceded that so far as the balance of Palm Kernel now to be imported by the appellant even under the original contract dated 10-6-1987, can only be made by the State Trading Corpn. or Hindustan Vegetables Oil Corpn., New Delhi as already made clear vide notification dated 27-7-1987. 14.Mr. Sen further contended that Section 15 of the Customs Act, 1962 provides for the date for determination of rate of duty and tariff valuation of imported goods. Section 15 reads as under :- The rate of duty and tariff valuation, if any, applicable to(1) any imported goods, shall be the rate and valuation in force, - in the case of goods entered for home consumption under(a) Section 46, on the date on which a bill of entry in respect of such goods is presented under that section; in the case of goods cleared from a warehouse under Section(b) 68, on the date on which the goods are actually removed from the warehouse; in the case of any other goods, on the date of payment of(c) duty: Provided that i....
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.... duty was leviable on that day on Palm Kernel. 17.It was further argued by Mr. Sen that Section 68 of the Act which reads as under will not apply in the present case. Section 68 :- "The importer of any warehoused goods may clear them for home consumption, if - a bill of entry for home consumption in respect of such(a) goods has been presented in the prescribed form; the import duty leviable on such goods and all penalties,(b) rent, interest, and other charges payable in respect of such goods have been paid; and an order for clearance of such goods for home consumption(c) has been made by the proper officer." 18.It has been contended that clause (b) of Section 68 only speaks of the import duty leviable on such goods and all penalties, rent, interest and other charges payable in respect of such goods. It has been submitted that the redemption fine does not come within the meaning of penalties, rent, interest and other charges mentioned in Clause (b) of Section 68. The appellant being an importer of the warehoused goods was thus entitled to clear them without any payment of redemption fine or penalty as neither any rent nor interest or any other charges were payable and in this....
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....hers Ltd. - 1955 (1) SCR, p. 1071. 21.Mr. Sen in support of his contention that Palm Kernel and Palm seeds are different and distinguished, placed reliance on the same authorities which were cited before the High Court. By Public Notice No. 205/27-7-1987 Appendix 5 Part-B, Item No. 5 "Oil/Seeds" was amended to bring within the canalised list "all other materials from which oil is extracted". He argued that it was not merely a clarificatory notification but it was in fact a notification by which the Government added the words "all other materials from which oil is extracted" in order to include Palm Kernel within the canalised list. 22.Mr. Desai, Ld. Solicitor General appearing on behalf of the Union of India and Customs authorities urged that the distinction sought to be made between `Palm Kernel' and `Palm seed' was artificial. The term `Palm seed' includes `Palm Kernel' within the Import Policy of the Government. It was contended that `Kernel' means the seed of a fruit enclosed within a hard shell as defined in the dictionary. The Import Policy applicable to seed would apply to Kernel also, and the import of Palm Kernel by the appellant under the OGL was illegal. The importatio....
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....er dated 12-6-1987 had clarified that Palm Kernel is a part of the palm seed and therefore the policy applicable to palm seed was applicable to its part as well and as such its import is canalised through the STC. The appellant M/s. Priyanka Overseas Pvt. Ltd. was also aware about the aforesaid reply given to M/s. Ganesh Dass Bhoj Raj as it itself relied upon various correspondences between the Customs authorities and M/s. Ganesh Dass Bhoj Raj. The appellant, Mr. Desai contended, had no justification to get the goods shipped between 26-6-1987 and 25-7-1987. In any event, nothing prevented the appellant to seek clarification from the Chief Controller of Imports & Exports and then proceed in the matter, particularly when the appellant was importing goods valued nearly 3 crores of rupees. Seeking clarification from other agencies as to justify distinction between `Palm Kernel' and `palm seed' was of no consequence under Section 24 of the Import Policy. The clarification could have been sought from the Regional Licensing Authorities at Bombay, Madras and Calcutta who could have given technical advice in the matter. He thus contended that Palm Kernel was a canalised item and the appella....
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....el' and `Palm seed' were two different commodities or `Palm Kernel' was included in `palm seed' for the purposes of import. The difference between `palm seed' and `Palm Kernel' has been explained in the letter of the Central Plantation Crops Research Institute dated 21-1-1987 (placed on record), it reads as under : "The difference between Palm Kernel and Palm seeds has also been pointed out in the aforesaid letter according to which Palm seed is specially extracted from fruits while kernel is a product obtained after sterilization, digestion at 95 degree celsius, pressing, decarping, shelling, etc. The Palm Kernel will lose its viability due to the above processes and cannot be used for germination". Under Appendix 5 para (6)(5) of the Import Policy under the heading Oils/seeds only Palm oil/Palm seeds have been mentioned. We agree with the view taken by the High Court in this regard that Palm Kernel cannot be included under the Item Palm seeds and the two commodities were different as understood in commerce or trade. We do not want to burden this judgment by citing those authorities which have already been considered for deciding this controversy by the High Court. We do not see....
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....aining 3/4th value of the goods. That order was clarified by another Order on 3-8-1987 by which the Court directed that the appellant shall pay the entire customs duty as may be determined and demanded by the Customs authorities in cash and it shall furnish a bond for the entire value of the goods. It was further made clear that the Customs authorities shall not release the goods unless the entire Customs duty as determined and demanded by them was fully paid in cash by the appellant. The Union of India filed an appeal against the aforesaid Order before the Division Bench of the High Court. The Division Bench passed an Order on 18-9-1987 to the effect that the imported goods should be kept in a bonded warehouse or in any other warehouse approved by the Customs authorities and until further orders M/s. Priyanka Overseas Pvt. Ltd. will not take delivery of the same. In the light of the directions of the Court the petitioners filed 16 bills of lading for bonding the entire cargo of Palm Kernel and the goods were allowed to be bonded in terms of the Court's order in a private warehouse. Meanwhile proceedings were continuing for adjudication before the Customs authorities. The Division ....
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....nd valuation in force in the case of goods cleared from a warehouse under Sec. 68, the date on which the goods are actually removed (emphasis added) from the warehouse. There can be no manner of doubt that the term `actual removal' is even more stronger than the term `physical removal' and the intention of the Legislature in using these words clearly stipulates the actual removal of the goods from the warehouse. The rate of duty and tariff valuation on the imported goods may be changed from time to time and as such the Legislature has clearly expressed its intention under Sec. 15 as to on what date the rate of duty and tariff valuation is to be determined. We cannot introduce the concept of deeming provision while determining the question of actual removal of the goods from the warehouse. The rate has to be determined on the basis of the date on which the goods are actually removed from the warehouse and thereafter the question would be examined as to how the relief is to be moulded in case it is found that the Customs authorities were themselves responsible in preventing the importer of goods from actually removing the goods from the warehouse. In a case of the present kind where ....
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....in ground that the three settlement contracts were illegal and prohibited by the West Bengal Jute Goods Future Ordinance, 1949. The respondent contended that it never dealt in sale and purchase of jute goods involving actual delivery and possession thereof, nor did it possess or have control over any godown and other means and equipments necessary for the storage and supply of jute goods and therefore said settlement contracts were void and not binding on it. The Trial Court decreed the suit. The learned Judges of the Appeal Court however held that the settlement contracts were contracts relating to the purchase of jute goods made on a forward basis by the respondent not being a person who habitually dealt with in the sale and purchase of jute goods involving the actual delivery and possession thereof and were therefore void and unenforceable. In view of these findings the Appeal Court allowed the appeal and dismissed the suit. The Plaintiff Duni Chand then filed an appeal before this Court. This Court observed that the only point at issue was whether the respondent was a person who habitually dealt in the sale or purchase of jute goods involving the actual delivery and possession ....
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....tion which was put by the Appeal Court on the expression "actual delivery of possession" was accepted it would involve each one of the intermediate parties actually taking physical or manual delivery of the goods from their sellers and again in their turn giving physical or manual delivery of the goods which they had thus obtained to their immediate buyers. Such an eventuality could never have been contemplated by the Government and the only reasonable interpretation of the expression "actual delivery of possession" can be that actual delivery as contrasted with more dealings in differences was within the intendment of the Ordinance and such actual delivery of possession included within its scope symbolical as well as constructive delivery of possession." 34.Thus the above case dealt with the meaning of "actual delivery of possession" in the background and context of its meaning as laid down in the West Bengal Jute Goods Future Ordinance, 1949 and it can render no assistance in determining the question of actual removal of goods as mentioned in Section 15(1)(b) of the Customs Act. 35. M/s. Bharat Surfactants (Private) Ltd. & Anr. v. Union of India and Anr. case (supra) relied by ....
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....ning this question it must be borne in mind the statutory principle that if a party discharges its liability by complying with the requirement of law, and presents papers for clearance of goods, it is obligatory on the Revenue authorities to pass the order immediately thereon. If the Revenue authorities either refuse to pass the order on some erroneous or imaginary grounds or on account of any misconception of law, the department cannot take advantage of its own wrong in demanding higher rate of duty from the importer. Under Secs. 68 and 71 of the Act, goods placed in a warehouse can be taken out only after clearance for home consumption. Admittedly, the appellant had done its part of legal duty by presenting bills of entry and complying with Section 68(a) of the Act on 28-1-1988. But the Customs Officer refused to release the goods on an erroneous assumption that the appellant was liable to pay redemption fine and since it had not paid the said amount, the goods were not liable to be released. The High Court held that the imposition of redemption fine was non est and the petitioner was within its right to claim release of goods without paying any redemption fine, on the day it com....
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.... 17-12-1987 cancelled the licence for warehousing the quantity of goods in respect of which the bills of entry were filed by cancelling the bond and deleting the said godown from the relevant licence issued for the quantity of 11,500 MT. Endorsement to that effect was made on the licence of warehouse and keys of the godown were also handed over to the appellant simultaneously, as a result of which though the goods remained in the said godown but not as a warehouse, instead it was treated to be a private godown of the appellant, and it was allowed to remove the goods without payment of any duty. 39. There is no dispute that the remaining goods were also stored in a private warehouse and the appellant had filed the bills of entry and complied with all the required formalities for debonding and clearance of the goods on 28-1-1988, therefore the appellant was entitled to an order cancelling the licence of the private warehouse enabling it to remove the goods. Had the Customs authorities passed order in accordance with law the same result would have followed as had been done on 17-12-1987. The Central Manual published by the Director of Publications, Customs and Central Excise contains....