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Patel Impex Pvt. Ltd. Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Decided On
Reported in(1984)(16)ELT497Tri(Mum.)bai
AppellantPatel Impex Pvt. Ltd.
RespondentCollector of Customs
.....admissible under para 174 of the said policy and not a party to whom a licence is transferred. patel impex who were neither an export house nor an actual user, was not entitled to import palm kernel oil, a banned item, on a letter of authority given to them by an export house, under o.g.l. (c) palm kernel oil was covered by appendix 3, sr. no. 368 (page 64 of the policy 1980-81) and appendix 3, sr. no. 361 of the policy 1979-80 and was a banned item, (d) the subject import was, therefore, unauthorised. the collector confiscated the goods under section 111 (d) of the customs act, 1962 read with section 3(2) of the import & export (control) act, 1947. he also imposed a penalty of rs. 1,22,000 only under section 112 of the customs act on patel impex.2. against the above order, patel.....
1. The appellants - M/s Patel Impex Pvt. Ltd., Bombay, hereinafter referred to as Patel irnpex-imported a consignment of 307.193 M. Tonnes of Palm Kernel Oil (Unprocessed) at Kandla Port on 29.10.1980. M/s J.M.Baxi & Co., Custom House Agent, filed a Bill of Entry No. 523 dated 12-1-1980 for clearance of the goods. The licence for clearance of the goods was mentioned as P/K/L/M/2816076/C/XX/71/X/79 dated 27-3-1979 and Telegraphic Release Advice No. S/32-Bom-KandIa-3/80C dated 5-11-1980 issued by the Asstt. Collector of Customs, Bombay. The licence was held in the name of M/s United Breweries Ltd., Bangalore. The goods were assessed provisionally under Section 18 of the Customs Act, 1962 and the goods were released on payment of duty of Rs. 5,45,153.40 on 13-11-1980. For reasons set out in the show cause notice dated 14-4-1981 issued under Section 130 of the Customs Act, the Collector of Customs, Ahmedabad appeared to be of the view that the release of the goods against the aforesaid licence and release advice was not correct, legal or proper. Some other grounds were also set out in the said notice. After holding an enquiry, the Collector, in his order dated 26-6-1981 held that:- (a) Import Trade Control Notice No. 48/ITC (PN)/80 dated 9-12-1980 which amended the Import Policy published in Public Notice 9/ITC(PN)/80 dated 15-4-1980 had the effect of banning of the import of Palm Kernel oil with effect from 15-4-1980. Hence, the import of the oil under OGL vide para 174(5) of the Import Policy April 1980 March 1981 was not permissible.

(b) Only registered export houses were eligible to avail themselves of the benefits admissible under para 174 of the said policy and not a party to whom a licence is transferred. Patel Impex who were neither an export house nor an actual user, was not entitled to import Palm Kernel oil, a banned item, on a Letter of Authority given to them by an export house, under O.G.L.

(c) Palm Kernel oil was covered by Appendix 3, Sr. No. 368 (page 64 of the Policy 1980-81) and Appendix 3, Sr. No. 361 of the Policy 1979-80 and was a banned item, (d) The subject import was, therefore, unauthorised. The Collector confiscated the goods under Section 111 (d) of the Customs Act, 1962 read with Section 3(2) of the Import & Export (Control) Act, 1947.

He also imposed a penalty of Rs. 1,22,000 only under Section 112 of the Customs Act on Patel Impex.

2. Against the above order, Patel Impex preferred a revision application before the Central Government under Section 131 of the Customs Act. The main grounds taken up are : (a) The licence had not been transferred by United Breweries, the licence holder, to Patel Impex, the Letter of Authority (L,A.) holder ; (b) The L.A. holder was eligible to get all the facilities under para 174 of the Policy for 1980-81 ; (c) The Export House, the licence holder, was authorised under para 382 of the Policy to appoint any person as his agent for arranging the imports permitted by the licence ; (d) The licence had been issued prior to the imposition of the ban by Public Notice No. 48 dated 9-12-80 and the said notice could not affect the goods duly imported ;Bharat Barrel and Drum Mfg. Co. (P) Ltd. v. Collector of Customs, Bombay-AIR 1971 SC 704 squarely applied to the present case ; (f) Similarly, the ratio of the Bombay High Court judgment in Misc.

Petition No. 1419 of 1979-Stretch Fibres (P) Ltd. and Ors. v. Union of India & Ors, applied to the present case.

3. At the hearing of the appeal before us on 29-9-1983, Shri Jain, the learned Sr, D.R. raised a preliminary point that the penalty of Rs. one lakh had not been deposited by Patel Impex. To this, Shri Hidayatullah, the learned Counsel for Patel Impex, submitted that the present was a deemed appeal, it having been initially filed as a revision application before the Central Government and that, therefore, the condition of pre-deposit in terms of Section 129-E of the Customs Act would not apply to the present appeal. We agree with the Counsel.

4. Shri Hidayatullah, for Patel Impex, formulated the issue for our decision as to whether the subject consignment of Palm Kernel oil was correctly confiscated as having been imported in violation of the ban in terms of the Import Policy for 1980-81. He pointed out certain salient dates :- 29-10-1980-Date of import (Arrival of the ship M.T. Bangsaen at Kandla).

9-12-1980-Date of issue of P.N. 48/80 amending the Import Policy for 1980-81.

According to the Policy declared on 15-4-1980, item No. 368 of Appendix 3 (list of banned items) read : "Palmitic Acid/Palm Fatty Acid." Public Notice 48 dated 9-12-1980 amended the said item by adding ' and stated that the said amendment "shall be deemed to have been made in the said Import Policy at the appropriate place." Now, it was settled law, the Counsel continued, that a Public Notice amending the Import Policy, had no retrospective operation. In this context, the Supreme Court judgment in the Bharat Barrel & Drum Mfg.

Co. case and the Bombay High Court judgment in Stretch Fibres case (earlier referred to) were cited. The goods in the present case were imported and cleared. Before the date of coming into force of the ban imposed by Public Notice of 9-12-1980. Even a statutory notification could not have retrospective effect (1970 AIR 755). The Counsel then referred to Central Government's Order-in-Revi-sion and Board's Order-in-Appeal in the applicants' own case-copies filed.

5. As regards the Collector's finding that, as a Letter of Authority holder, Patel Impex could not have imported the goods, the learned Counsel referred to para 382 (page 63) of the 1980-81 Policy. The Licence holder was an export house and had duly issued a Letter of Authority in favour of Patel Impex who was entitled to import the subject goods.

6. On 30-9-1983, the Sr. D.R., replying on behalf of the Respondent, submitted that the amending notice 48 of 9-12-1980 itself said that the amendment "shall be deemed to have been made in the said import policy", meaning that the amendment should be deemed to have been there all the time since the announcement of the policy on 15-4-1980. The effect was the same as if the words employed were "deemed to have always been". As regards the Supreme Court decision in the Bharat Barrel case, he sumbitted that it was with particular reference only to the Public Notice before the Court. In the Stretch Fibres case, again, the Public Notice in question, in terms, appeared to be only of prospective application. These decisions are of no help in interpreting a Public Notice of the type in question before us.

7. As regards the appellants' submission that they were Letter of Authority Holders and that they could have imported the goods against the licence held by an export house, it was submitted that this was a question of fact. If the licence holder was an export house and the appellants were Letter of Authority holders, they could be entitled to the benefits of para 382 of the Policy.

8. Shri Jain did not make any submission with regard to the Central Government, and Board's orders cited by Shri Hidayatullah.

9. In his reply, Shri HidayatulJa cited Supreme Court's decision in the case of Cannanore Spinning and Weaving Mills-1978 ELT 375 and made the point that so long as the authority did not have power to make retrospective amendments, it could only make prospective amendments.

10. We have given careful consideration to the submissions of both sides. We shall first deal with the effect of the amending notice No.48 of 9-12-1980. The notice, on the face of it, does not indicate that it has any retrospective effect. It does not say : "the following amendment shall always be deemed to have been made" or words to that effect which are customarily employed in retrospective legislation.

(This is quite apart from the question whether any retrospective amendment could be made). On the other hand, the operative portion says : "In the existing entry No. 368, the following shall be added at the end ..." (emphasis supplied by us). The words added ("Palm stearin/ palm kernel oil") were simply not there in entry No. 368 before the entry was amended by Notice 48 of 9-12-1980 and were added by the notice.

Apart from what is stated above, the learned Counsel for Patel Impex has cited certain judicial pronouncements which support his contention.

In the case of Bharat Barrel and Drum Co., the Supreme Court (A.I.R.1971 S.C. 704) held with reference to a Public Notice dated 6-12-1962 issued by the Iron & Steel Controller (which, for the first time, imposed a condition that steel sheets imported must be of "prime quality"), that the notice could not obviously apply to the sheets imported under the Licences which were issued earlier. It had no retrospective operation. Similarly, the Supreme Court in the Cannanore Spinning and Weaving Mills case-1978 ELT (J 375), interpreting the effect of Central Government Notification of 16-2-1963 (which defined "hanks"), held that it had no retrospective effect and that the said definition could not be made use of for the purposes of Notification dated 15-9-1962 which it amended. This was despite the fact that the notification of 16-2-1963, in terms, said that it shall be deemed to have taken effect from 17-8-1962. The Court further held that the Central Excise law did not confer any retrospective rule making power on Government.

In the Stretch Fibre case (Misc. Petition No. 1419 of 1979 decided on 9-10-11 January, 1980 by the Bombay High Court), the matter was about certain import replenishment and other benefits under the Import Policy for registered exporters as were permissible on the date of registered contracts for export with overseas buyers coupled with certain duty benefits. These were sought to be subsequently restricted. Following the ratio of the Supreme Court judgment in the Bharat Barrel case, the Court held that the policy in the Public Notice of 28-2-1979 was clearly prospective. There was nothing to indicate that it would apply to the case of an import already made and endorsement already validly made on the licence by the licensing authorities.

11. Apart from these authorities which provide a complete answer in the negative to the Respondent's contention that the amendment made by Public Notice No. 48 of 9-12-1980 was retrospective in effect and operation, the Orders-in-Appeal passed even by the Board, one of them being in the appellants' own case, involving import of another consignment of palm kernel oil (to which Shri Hidayatulla referred do not support the Department's contention but go to support the appellants' contention.

12. We have, therefore, no hesitation in holding that the amendment to the Import Policy for 1980-81 effected by Public Notice No. 48 of 9-12-1980 was not retrospective in operation and the present goods which arrived at Kandla Port on 29-10-1980 and were cleared on 13-11-1980 (both dates being before 9-12-1980 the date of the notice) were not hit by the mischief of the said notice.

13. The other remaining point is about the eligibility of Patel Impex as a Letter of Authority holder to import the goods against the licence issued to an export house. On this, the Departmental Representative has fairly stated that this was a question of fact and if these facts were so, the appellants would be entitled to import the goods. On this point, the Collector has recorded in his impugned order as follows :- "During the course of personal hearing on 16-6-1981 the Counsel furnished a photostat copy of letter of authority dated 6-8-1980 issued by M/s. United Breweries Pvt. Ltd., Bangalore authorising their clients to import goods and to open a Letter of Credit and make remittance of foreign exchange against their licence No. 2816076 to the extent of about Rs. 24,13,546.77 with the specific mention that this letter of authority has been issued as per the provisions contained in Chapter 1 para 6 of the Hand-Book of Import and Export Procedure 1979-80." The photostat copy of the licence shows that United Breweries, the licensee, is an Export House.

It is not clear, however, on what basis the Collector has recorded a finding as if the licence had been "transferred".

14. In the light of the discussions above, we set aside the Collector's order and allow the appeal.

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