2000 (6) TMI 66

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....ard Shri A. Hidayatullah Sr. Counsel appearing along with Shri Arun Mehta and Shri. J.B. Verma Advocates for the applicants. We have heard Shri Deepak Kumar for the Revenue. 3.We have also seen the show cause notice, relevant extracts of the Import and Export Policy AM 1992-97 and also 1997-2001 and the clarification given thereupon by the DGFT in their letters dt. 17-12-1997 and 6-8-1998. 4.We have also seen the bills of entry referred to in the show cause notice. 5.The bills of entry described the goods imported as Heptene and Nonene, classifiable as "Naphtha". The importability of Naphtha was prescribed in the two Policies are as follows : AM 1992-97 and (ii) AM 1997-2000(i) "Import permitted without a licence subject to the condition that the importer shall sell the return stream of naphtha to crude oil refineries only. The sale will be on commercial terms as may be settled between the importer and the refinery. However, the importer may use the return stream as an industrial feed stock for his own captive consumption, but the balance left, if any, shall be sold to crude oil refineries only". 6.In the case of each of the seven Bills of Entry referred to in the....

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....w Products v. Commissioner [1999 (108) E.L.T. 267] (iii)       Collector v. Oswal Agro Mills [1989 (41) E.L.T. 104 (T)] 11.The combined effect of the waiver given by the DGFT, in exercise of the power vested in them to depart from the announced policy and of the cited judgment is that the imports made by the appellants qualified for the waiver from the restricted list. 12.The show cause notices proceed on the presumption that the goods Heptene and Nonene qualified as "Naptha" for assessment under the Customs Tariff. This is clear on perusal of the first sentence of paragraph 3 thereof. Therefore it has to be held that in the situation narrated above, the imports could not be held to be in the contravention of the provisions of Section 111(d) of the Customs Act. 13.The ld. Commissioner also covered the same aspects as we have narrated above. He also cited the opinion of the Departmental Chief Chemist to the effect that Heptane and Nonene were considered as Naptha. He thereafter proceeded to distinguish the identity of Naptha as distinct from Heptane and Nonene and arrived at the conclusion that these two substances could not be covered under....

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....al 1997 (89) E.L.T. 701. In the case of Nettur Technical 1997 (93) E.L.T. 732 also the Tribunal did not find favour with the orders which went beyond the show cause notice. In the instant case we find that the Collector was wrong in taking into account certain developments which had taken place subsequent to issue of the show cause notice in very substantially altering his own findings on the classification of the contested goods. We find that the impugned order to this extent does not survive." 14.The Bombay High Court in the case of Wimco Ltd. v. UOI - 1980 (6) E.L.T. 235 (Bom.), approved the submission that where the matter had not been contained in the show cause notice nor where any opportunity was given to the Petitioner any finding arrived at thereupon werein violation of principles of natural justice. 15.Since it is not denied that the Commissioner in attempting to distinguish between Heptene and Nonene travelled clearly beyond the compass of the show cause notice, his orders do not survive. On the finding that the imports were made within the parameters of the policy as relaxed by the licensing authorities the appeal succeeds and is allowed with consequential reli....

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....his conclusion. In any case, the binding nature of the clarification cannot be brushed aside. In this connection, we also take note of the judgment of the Bombay High Court in the case of Richardson Hindustan Ltd. v. Union of India 1988 (37) E.L.T. 496 (Bom), therein the learned judge has held as below: "This interpretation cannot be challenged by the Customs authority. In fact in the Hand Book of Import Export Procedures 1985-88, in paragraph 124, it has been stated 'As in the matters relating to import-export policy and procedure, the interpretation given by the Chief Controller of Import & Exports is final in case of doubt regarding these matters, the Customs authorities should consult the Import Trade Control authorities before clearance of the goods. In the case of Lokash Chemical Works v. M.S. Mehta, Collector of Customs (Preventive) reported in 1981 (8) E.L.T. 235 (Bom.) a learned Single Judge of this Court observed that interpretation of licensing policy was the function of the licensing authority. It was not for the Customs authorities to interpret the licensing policy. If the licensing authority interprets the policy one way and the Customs authorities take a contra....