TaxTMI 
TaxTMI 
1993 (7) TMI 74
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....harged the shore tanks were seated. Now under the import policy of 1980-81 whereunder the two consignments were imported, 'coconut oil' was mentioned under Entry 5 of Appendix 9 thereof as a canalised item which could be imported through the State Trading Corporation (STC) only. Admittedly, these imports were not made through STC. Even though the imports are stated to have been made under the import policy of 1980-81, the Letter of Credit was opened on 31st July, 1982. The importers being merely holders of Letters of Authority were expected to import the goods and deliver them to the licence holders who in turn would dispose of the goods to actual users. Indisputably the goods were sold on high-seas basis. The importers contended that only the edible variety of coconut oil was a canalised item, a contention which was disputed by the department. Giving detailed reasons the Customs Collectorate, Ahmedabad, issued notices dated 24th and 26th November, 1982 requiring the importers to show cause why the said two consignments should not be confiscated under Section 111(d) of the Customs Act since the import was illegal, in that, it was in contravention of Section 3(1) of the Impo....
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....t of the High Court insofar as it related to the validity of the import, the importers approached this Court by way of Special Leave. The two appeals being Civil Appeals No. 2705 and 5383 of 1985, were disposed of by a common judgment on 5th May, 1988 vide Jain Exports (P) Ltd. & Anr. v. Union of India & Ors. [1992 (61) E.L.T. 173 (S.C.) = 1988 (3) SCR 953]. Before this Court the following four points were raised: "(1) The import policy of which year would be applicable to the facts of the present case - the period during which the licences were issued or the time when import actually took place. (2) Whether "coconut oil" appearing in para 5 of Appendix 9 of the Import Policy of 1980-81 was confined to the edible variety or covered the industrial variety. (3) Whether in the face of the decision of the Board and Central Government as the statutory appellate and revisional authorities, it was open to the Collector functioning in lower tier to take a contrary view of the matter in exercise of quasi-judicial jurisdiction; and (4) Whether the order of the Collector was vitiated for breach of rules of natural justice, and collateral considerations in t....
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.... 5th December, 1986 took the view that since the Delhi High Court had remitted the matters to the Tribunal for consideration of the question of quantum of redemption fines levied by the Collector of Customs, it was not open to the Tribunal to dismiss the appeals as barred by limitation. However, on the merits of the matters the Tribunal concurred with the view of the Member (Technical) that both the appeals should be dismissed. In other words the three-member Bench of the Tribunal did not, in the facts and circumstances of the cases, favour any reduction in the redemption fine in either case. In view of the opinion so expressed by the larger Bench, the appeals were ultimately dismissed by the Tribunal. 4. The importers feeling aggrieved by this decision rendered by the Tribunal preferred a Writ Petition No. 568 of 1989 in this Court under Article 32 of the Constitution of India which came to be finally disposed of on January 23, 1990. Taking note of the observations of the Tribunal that it was faced with a Hobson's choice because no material was placed before it by the department or by the importers on the question of quantum of the redemption fine, this Court felt that the ....
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....nalised item was finally set at rest by the decision of the Delhi High Court against which this Court had refused to interfere in appeal under Article 136 of the Constitution and hence the only question which survived related to the bona fides of the appellants in importing the said commodity as it would influence the Court's decision on the quantum of the redemption fine. On the question of fixation of the quantum of the redemption fine, five circumstances were relied upon in support of the plea of bona fides. These had not weighed with the Tribunal. This Court, however, felt that the first four circumstances were relevant and having regard to the view taken in the case of M/s. Jayant Oil Mills Pvt. Ltd., 1989 (40) E.L.T. 287 (S.C.) it would appear that the Customs Collectorate was guilty of hostile discrimination. So held the redemption fine was reduced to 35% of Rupees Five crores. Excess payment was ordered to be refunded within six months failing which interest at 15% per annum was ordered. No order was passed as to costs. The respondents preferred review petitions - R.P. Nos. 75-76 and 635 of 1992 which were allowed on 21st October, 1992 and these appeals and Writ Petitio....
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....canalised item and could, therefore, be imported under the OGL. The import was made against the additional licences issued during the policy period 1980-81 and hence the fact that the Letters of Credit were opened on 31st July, 1982 and the imports were actually made in September 1982 was of no consequence. The further fact that the edible variety of coconut oil was a canalised item under the 1982-83 policy period should not weigh in judging the bona fides of the importers. The importers believed in good faith that the non-edible variety was not canalised as they were so informed by the Chief Marketing Manager of STC by his letter dated 30th October, 1980. 8. Besides, counsel urged, when M/s. Jain Shudh Vanaspati Ltd., a sister concern, imported industrial coconut oil under the 1980-81 policy, the Collector of Customs by his order dated 17th December, 1980 held the import illegal and imposed a redemption fine of Rs. 25 lakhs. This view was reversed by the Board by its order dated 23rd January, 1981 which view was confirmed by the Government of India by its order dated 31st March, 1981. Subsequently, in May-June 1981 clearances were permitted both by the Bombay and Kandla offices....
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....olders who in turn would dispose of the goods to actual users in accordance with the terms and conditions of the licence. However, it is well established that the consignments in question were sold on high-sea-sale basis under the cover of the Letters of Authority and separate agreements with the licence-holders. The importers have not despite the opportunity given to place on record such material as is relevant to the question of bona fides, disclosed information and details regarding the transaction for appreciating why the sale was effected on high seas and the profit if any derived therefrom. The Tribunal has noted : "However, the appellants, despite the direction from the Delhi High Court to produce relevant details for determining the quantum of redemption fine have not given any details regarding the landed costs and other expenses including the sale price on high sea sale basis for arriving at the appropriate quantum of profit." Even during the course of the hearing before us we repeatedly inquired of counsel for the importers to show us from the record whether or not the transactions in question had yielded any profit and, if yes, the quantum thereof but we did....
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....ports in question, though under the 1980-81 policy, took place in 1982 under the Letter of Credit dated 31st July, 1982, the importers who are experienced in handling import and export of goods and well versed with the policies and procedures in that behalf must be assumed to be aware of the subsequent developments. The Chief Controller of Imports & Exports had issued circulars from time to time clarifying that the non-edible variety was a canalised item and the Collector of Customs, Ahmedabad had placed reliance thereon. This was the precise grievance made by the importers before the Delhi High Court, vide paragraph 48 of the judgment. The Collector has pointed out that while revalidating the additional licence dated 4th November, 1980 it was specifically stipulated that during the period of revalidation items which do not appear in Appendix 5 and 7 of the 1982-83 import policy shall not be imported and since the commodity in question did not figure in either of the appendix it could not be imported under OGL, The importers who are well versed would have realised that in view of this position the statement in the letter of the STC cannot carry any weight. In this background if the....