S.B. Wad, J.
(1) The petitioner company imported 13.500 M.T. of Rbd Palm Oil from foreign suppliers. The import of Rbd Palm Oil was allowed under open general license by Import Trade Control Public Notice No. 64 Itc (P&B;)/78 issued by Ministry of Commerce, Civil Supplies E and Cooperation, Govt. of India on September 2, 1978. Bills of entry for the total quantity of Palm Oil were duly presented to the authorities after the ship entered Bombay Port. The oil in question was contained in stainless steel drums. The proper officer cleared the goods after physical checking and satisfying himself that the import of goods was not prohibited under section 47 of the Customs Act. There was no restriction, at the time of the import, that Edible Oil should be imported only in a particular type of drum or container. The drum or container could be of steel or iron as referred to inserial No. 73-23 of the First Schedule to the Import Control Order. 'Stainless Steel' is included in the expression 'Steel', in the said entry. The drums were brought at the Ghaziabad factory of the company and after unpacking the , they were disposed of by the petitioner. company in the normal course of business. Acting on the belief that under Appendix 3 of the Import Policy A. M. 79, importation of stainless steel drums was- banned, the customs authorities effected searches and seized the drums (under Section 110 of the Customs Act) from various places. Respondent No. 2, thereafter, through the Asst. Collector of Revenue and Intelligence, New Delhi, issued summons to the petitioner No. 2 and to the General Manager of petitioner No. I, under Section 108 of the B Customs Act. The statements of petitioner No. 2 and the General Manager were recorded on September 1, 1979. A public notice was issued by the Custom Authorities on September 6, 1979 regarding, the declarations to be made in respect of packages or containers. The said notification reads as follows :
'No. 90 Price O.30 paise Imp SUP. 169 New Custom House Bombay, 400 038 EXP. Sup 101 6-9-1979 Supplement To The Daily List Of IMPORTS/EXPORTS Dated : 10-9-79 Public Notice
SUB.: Assessment of the packages or containers or the like
IT is notified for the information of the Importers/Clearing Agents and others concerned, that the following procedure is introduced with immediate effect for the processing of B/E and S/Bills as the case may be.
THEB/E or S/Bills, as the case may be, will contain an additional declaration of the importers indicating the nature of the packing. If the importers want to avail the benefit of exemption Notification No. 184/Cus..dated 2-8-1976 they mast clearly declare that
(A)The value of the packages or containers of the like in which the goods are packed is included in the value for which the goods contained therein have been invoiced;
(B)the goods are not packed in packages or containers or the like which are of a permanent character and accordingly strong enough to be suitable for repeated use; and
(C)the packages or containers or the like in which the goods are packed are such as are normally used in the trade for packing such goods.
Further, the packing is of other than wood, paper and. paper bamboo, cane and cheap plastic material, the nature of material and the approximate cost per unit container or package should also be declared.
INcase the drums and other containers of durable nature importers may claim benefit of Notification No. 260-Customs dated 11-10-1958 subject to satisfying-conditions prescribed therein.
Collector of Customs, Bombay Attested
S. C. Rage
Asstt. Collector of Customs, Correspondence Dept.,
Tel. No. 268231
ISSUEDfrom file No. 5/26-94/79 Iii (C)
ITmay be seen that it was for the first time that the custom authorities required disclosure of 'the nature of the material and the approximate cost of the unit container or package' by virtue of the said public notice of September 6, 1979.
(2) In the months of October and November, 1979 the Assistant Collector, Bombay issued short levy notices under section 28 of the Customs Act to the petitioners. The notices stated that the fact that the drums were of stainless steel was suppressed by the petitioners. It was then stated :
'THEstainless steel drums are subject to levy of customs duty which was not levied (amount of the duty shown in the annexure attached) as provided for under section 28 of the Customs Act, 1962. You are, thereforee, requested to explain why the amount specified above should not be recovered from you.'
These show-cause notices were replied to by the petitioners. Thereafter on June 21, 1980 the Collector of Bombay, respondent No. 5, issued show-cause notices to the petitioners under Section 124 of the Customs Act, calling upon them to explain why the stainless steel drums should not be confiscated. The allegations in the show-cause notice, in substance, were that the petitioners were engaged in (not only) acquiring storing, purchasing, harbouring and dealing with the smuggled stainless steel drums and that they were further engaged in destroying its identity to avoid their detection, by cutting and shearing thousands of such drums at the premises of the concerns connected with them. It was further alleged that drums were flattened and re-rolled in cut sheets for the purpose of undetected disposal. On January 22, 1980, the authorities issued supplementary short levy notices under Section 28 of the Customs Act alleging that the authorities had received additional particulars regarding higher price of stainless steel drums. On February 8, 1980 the petitioners filed the present writ petition challenging the show-cause notices under Section 28 and Section 124 of the Customs Act. They also prayed for an appro- priate writ or direction to set aside the seizure and confiscation.
(3) There is no dispute that the importation of stainless steel as such, as a consumer item is banned and prohibited. It is also an admitted fact, that under the relevant rules and instructions, the goods which are permitted to be imported under Open General license are also permitted to be imported in containers. The question for determination is, whether the stainless; steel drums which were used- for importing the Palm Oil in this case, were imported as a separate item of stainless steel or were imported as mere containers for the Palm Oil. Palm Oil, according to the respondents is usually imported in India in mild steel containers. The respondents, thereforee, suspected that the petitioners had used the containers of stainless steel, as an indirect rule to import stainless steel which is a banned item. This they found on inquiry from all traders importing in Palm Oil. According to the respondents this is the normal trade practice. The petitioners, on the other hand, contend that the present international trade practice is to import edible oil in stainless steel containers as stainless steel prevents deterioration and contamination. The petitioners have produced two letters (Annexure H) in support of this claim. The first letter is by the State Trading Corporation. In its letter S.T.C. has said :
'WEhave been importing edible oil both in crude and refined form. A copy of the letter is enclosed for your information which clearly stipulates on merit that refined oil shall be made only either in Stainless Steel tanks or epoxy-coated tanks. Some of the suppliers have been insisting upon making supplies of refined oils in mild steel tanks but we have not agreed to any such proposal and have insisted that supplies must be made either in stainless steel or epoxy-coated tanks as per our standard practice. To the best of our knowledge it is an internationally accepted trade practice to move refined oil only in stainless steel or epoxy-coated tanks as movement in mild steel tank involves the danger of contamination and deterioration in the quality of oil which is ultimately meant for human consumption.'
THISletter was sent by the State Trading Corporation in response to the specific querry made by the petitioners. Another letter is by Scs Control Service Line. New York U.S.A. This letter is worth noting. The letter reads :
'ASconfirmed to you today vide telex, the U. S. market practice for shipping refined edible oil is to use coated or stainless steel drums or tanks to prevent quality deterioration. In. addition, some vessel shipments are made employing a blanket or nitrogen over the surface of the oil in order to prevent oxidation.'
(4) It is common knowledge that goods like oil can be removed from one place to another only in some containers. Modern marketing practice insists upon scientific packing of goods. New and better package materials are being invented and used so as to ensure the quality of goods their attractiveness. Encyclopedia Britanica, 1969 (Edn.), has succinotly summarised importance of packaging in the modern trade is as follows :
PACKAGING: 'MOSTfood and manufactured products must be enclosed in some kind of container if they are to be marketed widely and efficiently. These containers offer a convenient way of handling, help to prevent physical deterioration, making theft, adulteration or substitution more difficult, ensure cleanliness and facilitate measurement labelling and attachment of sales instructions and descriptions. They may also promote sales because of their attractive appearance.'
Asimilar question arose for consideration by a Bench of this Court under Section 5(2) (a) (ii) of the Bengal Finance (Sales Tax) Act, 1941, in (M/s. Palam Potteries v. Commissioner of Sales Tax Lpa No. 82 of 1975 decided on May 9, 1979) (1). The specific question was whether packing material used for packing the goods, was entitled to exemption from sales tax. The bench held that considering a modem marketing practice, containers cannot be treated as separate and independent from the principal goods and they are also exempt from duty. No sale of principal goods was possible without the containers. The goods involved were crockery articles. We agree with the said reasoning of the Division Bench. We hold. that the stainless steel drums used by petitioners to import the Palm Oil, cannot be treated as a separate and independent item of importation. In other words, what was imported by the petitioners, in the present case, was R.D.B. Palm Oil only. Ws do not agree with the respondents that stainless steel was also imported by the petitioners.
(5) It might sound anamolous that stainless steel as such is prohibited item but stainless steel containers for carrying permitted goods are not. It can even be said that this is a lacuna in the law as it stood on the date of the importation in the present case. But neither the Department nor the Court can fill this lacuna by streching the language of law. We are interpreting a taxing statute and subjecting a citizen to a possibility of very heavy customs duties, and other harsh penalities under the Customs Act. Similar problem of importation arose before the Supreme Court in Union of India v. Tara Chand Gupta and brothers : 1983(13)ELT1456(SC) . In that case entry 295 of the schedule fell for consideration. The entry permitted importation of parts and accessories of motor-cycles. The respondents imported parts and accessories in so complete a fashion that when put together they would make motor cycles. The importation of motor cycle was a prohibited item.the customs authorities held that what was imported was not mere parts and accessories but 51 sets of 'Rixe Mopeds' complete in a knocked down condition. The Supreme Court held :
'The result is that when the Collector examines goods imported under a license in respect of the goods covered by entry 295, what he has to ascertain is whether the goods are parts and accessories and not, whether the goods though parts and accessories, are so comprehensive that if put together would constitute motor cycles and scooters in C.K.D. condition. Were he to adopt such an approach, he would be acting contrary to and beyond entry 295 under which he had to find out whether the goods imported were of the description in that entry. Such an approach would in other words, be in non-compliance of entry 295.'
(6) So far as the market practice is concerned, we are inclined to rely on the evidence produced by the petitioner then the one cited by the respondents. It is so, particularly because, the State Trading Corporation, which is an agency of the Central Government has itself certified that the normal international practice is to import edible oil in stainless steel containers. The reasons for importing the edible oil in stainless steel containers are scientific and appeal to reason. Edible oil can be imported in any steel container. No fault can be found if oil is imported in stainless steel container, simply on the ground that the steel containers on resale would give very high profit to -the importer. We hold that the respondents have failed to prove that the stainless steel containers are not normally used in international trade or that -the mild steel containers are alone used normally in international trade. The petitioners have thus not violated any conditions of exemption contained in the Notification No. 184(76 dated 2nd August, 1976 or the Market Control Trade Order, 1955.
(7) The question can be approached from another angle. Suppose chocolates are imported in silver boxes or cigarettes are imported in gold boxes. Importing chocolates and cigarettes in silver or gold boxes so unusual that this can never be done in normal trade. Can it besaid that the use of stainless steel is so unusual or prepostrous, especially when the State Trading Corporation certifies that on the ground of health and hygine, that stainless steel is preferred in international trade ?
(8) The petitioners attack short levy notices and confiscation notices on two grounds. One is on the merits which we have already dealth with. The other is that once the goods are cleared by the custom authorities after physical verification and check up under Section 47 of the Customs Act issuing of such notices amounts to review of the order under Section 47 of the Act. It is submitted that the order of clearance passed under Section 47 of the Act can be revised by the Collector of Customs or Board under Section 130. There are no inherent powers to review the order under Section 47 as all review powers must be expressly conferred by a statute. Section 47 of the Customs Act, 1962 reads as follows :
CLEARANCEof goods for home consumption : 'WHEREthe proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this officer may make an order permitting clearance of the goods for home consumption.'
(9) An order under Section 47 is one of the orders against which a revision can lie under section 130 of the Act. Section 130 required that before revising any order, party affected, should be heard. It is thus clear that the Act does not provide for any review of an order passed under Section 47 of the Act. Admittedly, there is no order passed by the concerned authorities under Section 130 of the Act. Respondents, however, contend that notices under section 28 or section 124 are not in nature of review. They further contend that power to issue such notices is an independent power and can be issued even after the goods are cleared under Section 47. Respondents rely upon a judgment of the Calcutta High Court reported in : AIR1961Cal616 . This ruling is of no assistance to the respondents, The said decision was rendered of interpretation of Section 89 of the Sea Customs Act, 1978. Section 89 of the Sea Customs Act is different from Section 47 of the Customs Act, 1962, in material particulars. So also the Sea Customs Act did not contain any provision of revision similar to Section 130 of the Customs Act. Section 89 the Sea Customs Act can be noted in this context :
'SECTION89 : When the owner of any goods enterec for home consumption, and (if such goods be liable to duty) assessed under Section 87, has paid the import duty (if any) assessed on such goods and any charges payable under this Act in respect of the same the Customs Officer may make an order clearing the same; and such order shall be sufficient authority for the removal of such goods by the owner.'
(10) In the statement of objects and reasons of the Customs Mill, 1962 it was clarified :
'CLAUSE47 corresponds to existing Section 89 with an amendment which provides specifically that the officer shall allow clearance of the goods, if he is satisfied that the import of the goods is not prohibited.'
Considering Section 47 of the Customs Act in the light of the legislative history, we are clear that the section attachesfinality to the satisfaction of the officer that the goods are not prohibited. The finality cannot be disturbed unless the Department successfully shows that there was fraud or deliberate suppression. The respondents have alleged that the containers were painted and thus the original identity of the drums was suppressed by the petitioners. This allegation is on the assumption that stainless steel drums was a prohibited item. We do not agree. The law as it then stood, did not require of an importer to disclose the nature of the material or the price of the containers. A new requirement in this regard was introduced for the first time by public notice dated September, 6, 1979 i.e. after the importation of oil by the petitioner. We, -therefore, hold that the proper officer's satisfaction, that the -goods ware not prohibited goods, had reached finality by the time the goods were cleared.
(11) In the facts and circumstances of the case, the notice under Section 28 and Section 124 of the Customs Act amount to review of the customs officer's order under Section 47 as they proceed on -an assumption contrary to the said order. We, thereforee, hold that the impugned notices under Sections 28 and 124 of the Customs Act are contrary to law and should be set aside. The use or disposal of the permitted containers for the resale by changing their form by way of normal trade is not prohibited by any provisions of the Customs Act or the Import-Export Act or Orders. There is no substance in the allegation in the show-cause notices that the petitioners had smuggled the prohibited goods or that they attempted to do away with the evidence of smuggling by flattening the drums or by re-rolling.
(12) In the result, the impugned show-cause notices under Sections 28 and 124 are quashed and set aside. The goods confiscated under the show-cause notices should be returned to the petitioners forthwith. The writ petition is allowed with costs. Rule made absolute.