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Fakirchand M. Shah Vs. Union of India and Others - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtMumbai High Court
Decided On
Case NumberMisc. Petition No. 2458 of 1979
Judge
Reported in1985(20)ELT38(Bom)
ActsImports and Exports Control Act, 1947; Imports (Control) Order, 1955
AppellantFakirchand M. Shah
RespondentUnion of India and Others
Excerpt:
.....the contents of this return that the licence granted to the petitioner for import of parts of petrol, gas and kerosene engines was clearly contrary to the import policy......obtained by the petitioners were for an item of motor vehicle parts, in accordance with the import policy of april 1976 - march 1977, as the said subject was included in the import policy of april, 1977 - march 1978 under the heading 'chassis fitted with engines, bodies (including cabs) and parts and accessories of the motor vehicles falling within heading nos. 87.01, 87.02 or 87.03', the petitioner is entitled to the grant of licence for any item covered under this heading. as set our hereinabove, under heading covered by item 87.04/06 are two sub-items (1) motor vehicle parts and (2) spare parts for crawler/agricultural tractors and for tractor drawn agricultural implements (sl. no. 74(iii)/v of old itc schedule), while items of motor vehicle parts were under serial nos. 293,.....
Judgment:

1. The petitioner is carrying business as a wholesaler and retailer in engines and parts thereof in the firm name and style of M/s. Honesty Trading Corporation as the sole proprietor. The petitioner is an 'established importer', within the meaning of Imports and Exports Control Act, 1947 and Imports (Control) Order, 1955. The petitioner, as an established importer, was granted quota certificated by the Government of India and on the strength of the same, the petitioner secured from time to time import licences and quota certificates enabling him to import into Indian various goods in accordance with the policy laid down by the Government. The petitioner was holding eleven quota certificates of the aggregate value of Rs. 8,38,451/- in the year 1977. The quota certificates were for import of items covered under Serial Nos. 293, 295 and 297 of Part IV, Section IV of Import Trade Control Policy for the year April 1976 - March, 1977. The subject under these three items was 'Motor Vehicle Parts'.

2. The Import Trade Control Policy for the period commencing from April 1977 to March 1978 grouped items of motor vehicle parts under the heading 'Chassis fitted with engines, bodies (including cabs) and parts and accessories of the motor vehicles falling within Heading Nos. 87.01, 87.02 or 87.03'. The various items under this heading were given Serial No. 87.04/06 under the I.T.C. of April 1977 and it reads as under :

------------------------------------------------------------------------

RITC Description Import Remarks

No. Policy

------------------------------------------------------------------------

(1) (2) (3) (4)

------------------------------------------------------------------------

87.04/06 Chassis fitted with engines,

bodies (including cabs) and

parts and accessories of the

motor vehicles falling within

Heading Nos. 87.01, 87.02

or 87.03.

(1) Motor Vehicle 10% Detailed policy for

Parts. these items is given

in Appendix 26.

(2) Spare parts for crawler/ 50% (1) Spare parts of

Agricultural tractors crawler tractors

and for tractor drawn falling under

agricultural implements Heading No.

(Sl. No. 74(iii)/V of Old 87.01 will be

ITC Schedule). permitted, for

import against

quota licences

for Heading No.

87.04/06(2).

(2) Import of items

mentioned in

Appendix 4-D,

Part I will be

permitted up

to the face value

limits indicated

against them.

(3) Licences will not

be valid for

import of spare

parts of crawlers

and agricultural

tractors and for

tractor drawn

agricultural

implements

mentioned in

Appendix 4-D,

Part II.

(4) Import of banned

types of ball,

roller tapered,

roller and needle

roller bearings,

bushes, cages,

needle roller

assemblies

mentioned in

Appendix 14 and

rollers/needle

rollers mentioned

in remarks column

against Heading

84.62(5) will not

be allowed as

spares or as

CKD parts.

(5) Import of any

types of

agricultural

steel disc will

not be permitted.

(6) Parts of

Hydraulic Lifts

which form an in

integral built up

mechanism of

tractors will be

classified as

spare parts

of the tractors.

(7) Quota licences

will not also be

valid for the

import of items

mentioned in List

I of Appendix 26.

Items mentioned

in List II of

Appendix 26 will

be allowed for

import only to

parts inter-

changeable with

motor vehicle

parts falling

under Heading

87.04/06 (Sl. No.

293, 295 and

297/IV of old

I.T.C. Schedule)

which are not

specified in List

'D' of Appendix 4

in respect of

which the policy

indicated therein

will apply.

------------------------------------------------------------------------

3. On September 24, 1977, the petitioner made an application to the Joint Chief Controller of Imports and Exports, Licensing Section, Bombay, for grant of licence for import of spare parts for Crawler/Agricultural tractors and for tractor drawn agricultural implements under Item No. 87.04/06(2) of Import Trade Control Policy of April 1977 to March 1978. The application was rejected by communication dated March 23, 1978 on the ground that the petitioner has failed to produce quota certificate for revised I.T.C. No. 87.04/06(2). The petitioner carried an appeal before the Controller of Imports and Exports, New Delhi, and the appeal ended in dismissal by communication dated October 19, 1978. The two reasons given for rejection of the appeal are as follows :

(1) the petitioner has failed to furnish quota certificates for items supplied for, and the quota certificates furnished were for different items than that of the items supplied for; and

(2) there is no provision for established importers during A-M-79 period.

The petitioner preferred revision application against this order before the Ministry of Commerce, Civil Supplies and Co-operation, but by communication dated February 21, 1979, the petitioner was informed that the decision already communicated by the Joint Chief Controller of Imports and Exports, Bombay cannot be revised. The petitioner has thereafter approached this Court by filing this petition under Article 226 of the Constitution of India.

4. Shri Desai, learned counsel appearing on behalf of the petitioner, raised two contentions to claim that the petitioner is entitled to the grant of licence for importing spare parts of crawler/agricultural tractors and for tractor drawn agricultural implements. The first submission of the learned counsel is that though the quota certificate obtained by the petitioners were for an item of motor vehicle parts, in accordance with the Import Policy of April 1976 - March 1977, as the said subject was included in the Import Policy of April, 1977 - March 1978 under the Heading 'Chassis fitted with engines, bodies (including cabs) and parts and accessories of the motor vehicles falling within Heading Nos. 87.01, 87.02 or 87.03', the petitioner is entitled to the grant of licence for any item covered under this heading. As set our hereinabove, under heading covered by Item 87.04/06 are two sub-items (1) Motor Vehicle Parts and (2) Spare Parts for Crawler/Agricultural tractors and for tractor drawn agricultural implements (Sl. No. 74(iii)/V of old ITC Schedule), while items of Motor Vehicle Parts were under Serial Nos. 293, 294 and 297 of Part IV of old ITC Schedule. The submission of Shri Desai is that these two items, which were under two different headings under the old ITC Schedule, were grouped together in the ITC Schedule of April 1977 - March 1978 and therefore, it open for the petitioner to claim that he is entitled to import either of the items covered under the new heading in the new ITC Schedule. It is impossible to accede to this submission. What the Government had done is to include various items under one heading, but the identity of the subject or item is not extinguished, but on the other hand, it is retained. Various items are grouped under one heading as a matter of convenience and it is impossible to conclude from this fact that the person holding an import quota certificate in respect of one item can claim licence in respect of other item. Shri Desai relied upon certain observation in the preface to the Import Policy of April 1977 - March 1978, and claimed that the Government's policy was to liberalise and simplify the import of the goods. Paragraph 8 of the preface reads as under :

'Presentation of the policy in this book is different from earlier books in certain respects. The presentation in Section II relating to policy for individual items has been completely revised in order to adopt the revised ITC classification based on BTN classification. Various appendices have been re-arranged. Their number has been reduced from 90 to 57. Some of the important appendices appear with different numbers in this book. For instance, the old Appendix 80 appears as Appendix 3 and the old Appendix 74 appears as Appendix 55 in this book. We would suggest that importers should study this volume carefully so that they can take full advantage of the liberalised and simplified policy. A new edition of the Import Trade Control Hand Book of Rules and Procedure has been issued separately.'

It is difficult to appreciate how the contents of this paragraph would substantiate the claim of Shri Desai that the grouping of various items under one heading was done with a view to enable the importer to seek a licence under any of the items. There is also intrinsic evidence in the Entry itself to indicate that the petitioner, who was holding import quota certificate for motor vehicle parts cannot import spare parts of crawler/agricultural tractors. Against item of motor vehicle parts is a note that detailed policy for these items is given in Appendix 26 and turning to Appendix 26, paragraph 4 provides that quota licence issued for import of motor vehicle parts will also be valid for import of the undermentioned items up the percentage indicated against each :

(i) Ball, Roller and Tapered Roller and needle roller

bearings, bushes, cages, needle roller assemblies

and needle rollers other than those banned for

import. ... 3%

(ii) Bolts, nuts, screws, spacers and washers (except

Bi-metallic Thrust Washers). ... 3%

(iii) Garage tools detailed in Appendix 10 of this

book and parts thereof. ... 4%

Paragraph 10 of this Appendix 26 provides that the licences issued for RITC Serial No. 87.04/06 will not be valid for the import of certain items. Reading these two paragraphs together, it does appear that the Government policy or the intention of the Government was that the quota licence issued for import of motor vehicle parts is valid only for motor vehicle parts and not other items, like spare parts of crawler and agricultural tractors. In my judgement, the claim of the petitioner that he is entitled to grant of licence for crawler/agricultural tractors although the quota certificate issued to him was only for motor vehicle parts cannot be accepted. Shri Desai tried to draw support by pointing out certain other entries in Import Trade Control of April 1977, but it is impossible to draw any favourable conclusion in favour of the petitioner by reading some other entries. In my judgement, the claim of the petitioner on this count has no substance.

5. The second contention urged by Shri Desai is that the Department did work out the Import Policy of April 1977 - March 1978 in accordance with the interpretation which the petitioner desires to put on the said Policy. In support of the submission, it was urged that the petitioner was holding quota certificate under Serial No. 30(f)/II of old ITC Schedule for spare parts of diesel engines other than spares for diesel engines for vehicles, such as motor vehicles, tractors, earthmoving machinery, etc. The petitioner, on the strength of this quota certificate, applied for the licence on September 24, 1977 for import of parts of petrol, gas and kerosene engines. Parts of gas, petrol and kerosene engines were covered under Serial No. 31(b)/II of old ITC Schedule. Now these two items, that is spares of diesel engines and parts of petrol, gas and kerosene engines were clubbed together under a new ITC Schedule under the heading 'Internal combustion piston engines' at Serial No. 84.06. The learned counsel urged that the Department by interpreting the import policy to mean that the importer would be entitled to secure the licence for any of the items covered under the heading 'internal combustion piston engines' granted the licence to the petitioner for import of parts of petrol, gas and kerosene engines. It was urged that this action on the part of the Department would establish that the Department has also understood the new import policy of April 1977 to mean that the importer is entitled to apply for licence for any of the items falling under a particular heading. In answer to this submission, Shri R. V. Desai, learned counsel appearing on behalf of the respondents, relied upon the averments in paragraph 6 of the return dated February 7, 1980 filed by Shri G. R. Nair, Deputy Chief Controller of Imports and Exports, Bombay. The respondents claim that the licence was granted to the petitioner due to mistake or inadvertence of the officer concerned and such a mistake or inadvertence, in respect of an individual, cannot be a reason for falsely presuming that the import policy has been liberalised or changed to allow quota licences to the established importers for items for which they hold no valid quota certificate at all. It is obvious from the contents of this return that the licence granted to the petitioner for import of parts of petrol, gas and kerosene engines was clearly contrary to the Import Policy. The mistake committed by the Department in that connection cannot be used for securing the import for import of spare parts of crawlers/agricultural tractors. In my judgement, the claim of the petitioner based on the mistake of the Department cannot be sustained in this writ petition.

6. Accordingly, petition fails and the rule is discharged, but there will be no order as to costs.


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