1. M/s Liberty Oil Mills filed a petition dated 18-1-1982 to the Government of India under old Section 131 of the Customs Act and this has been transferred to the Tribunal under Section 131-B ibid and is to be treated as an appeal before this Tribunal. The appeal is against the Order No. S/10-58/81/A, dated 24-4-1981 of the Collector of Customs, Bombay, under which he exercised the power under old Section 130 of the Customs Act and reviewed the order of the Assistant Collector of Customs Group 'A' allowing clearance of copra valued at Rs. 20,09,461/- c.i.f. imported by the Appellants under Bill of Entry No. 2368/818, dated 20-2-1981 per s.s. ZINOVIY SOLOYEV. Shri Banatwala submitted that this consignment was by way of replacement under OGL No. 4/80 of goods imported earlier. There was no dispute regarding this fact. Shri Banatwala submitted that the Appellants imported 1000 M/Tons of copra from Zanzibar earlier under Bill of Entry No. 1938/10, dated 1-3-1979.
On 10-3-1979 there was fire in the Bombay Docks and a quantity of 520.304 M/Tons of copra was completely destroyed in fire. The Appellants claimed the insurance against this loss amounting to Rs. 20,09,461/- and this claim was passed by the insurance company. Against this loss the Appellants imported the present consignment and sought its clearance under OGL No. 4. The consignment of copra weighed 348.52 M/Tons. The Asstt. Collector accepted the Appellarits claim for the clearance of the consignment under OGL No. 4 and out of 7,990 bags imported under OGL No. 4, 6,180 bags were cleared by the Appellants.
Thereafter they received a show cause notice from the Collector exercising his powers of suo motu review of the Asstt. Collector's order under old Section 130 of the Customs Act, as the Collector held that the Asstt. Collector's order was bad in law. The Appellants sent a reply to the show cause notice issued by the Collector. But the Collector did not accept the explanation offered and passed the impugned order dated 24-4-1981. The Advocate pointed out that the preamble to this order was wrong as it advised an appeal against it to the Central Board of Customs and Excise instead of an application to the Government of India under old Section 131C(c). The only point in dispute between the Appellants and the Collector was the satisfaction of condition No. 13 of OGL No. 4. The import of copra was canalised in the 1980-81 Policy vide Appendix 9. Therefore the dispute was whether Condition No. 13 of OGL No. 4 was contravened by the present import or not? Shri Banatwala contended that the prohibitions referred to under OGL No. 4 were those outside the Imports and Exports (Control) Act and not those within this. Act. He further argued that the OGL No. 4 was a complete code of Policy. Therefore the short question for consideration was whether the prohibition in Condition No. 13 would imply prohibition under the Act or prohibitions dehorse the act. Shri Banatwala submitted that the policy for interpreting OGL No. 4 was mentioned in Condition No. 5 of it. The OGL was issued under Section 3(1) of the Imports and Exports (Control) Act and it could be revoked only by a statutory order. He relied in this behalf on the decision of the Supreme Court in the case of East India Commercial Corporation. Shri Banatwala argued that the interpretation for the OGL was given in Condition No. 5 thereof and he read out the same. These stipulated conditions were that the reimport of the replacement goods should be made within 24 months of the original import or within the guarantee period of the goods lost on earlier import. Shri Banatwala argued that there was no dispute that condition No. 5 was not fulfilled. Referring to the Collector's order Shri Banatwala pointed out that the Collector had accepted that Sub-clauses (b) and (c) had been satisfied. The OGL was a complete policy for import and it was not therefore co-terminous with the import policy announced from year to year. The OGL permitted import of replacements within 2 years. The only condition was that excess goods could not be imported as replacement. The replaced goods were required to conform to the goods lost earlier. Shri Banatwala referred to the judgment of the Bombay High Court in the case of Jayant Vegoils & Chemicals (P) Ltd. and Ors. and he submitted a copy of this judgment.
Shri Banatwala argued that the phraseology of OGL No. 4 was analogous to the phraseology of OGL in Appendix 10. The OGL in the Appendix 10 had been interpreted by the Bombay High Court in the aforesaid case. He drew my attention to page 10 of the judgment, Condition No. 22 of the OGL No. 4 was the same, as condition No. 24 of Appendix 10 in the policy for the year 1981-82. By issue of a public notice dated 5-6-1981 the Government canalised the import of animal tallow through the State Trading Corporation. The Petitioners before the High Court had imported animal tallow on the basis of licences issued to them earlier to the date of the public notice dated 5-6-1981. The High Court interpreted the provision in para 5 of the judgment and held that the prohibition did not apply to licences issued earlier.
Shri Banatwala submitted that a similar interpretation should be made of OGL No. 4 in the present appeal and that the Appellants should be held as eligible for import of the replacement goods. Shri Banatwala submitted that, in this view the importation was valid and the Collector's contention that the imports offended the restrictions under the Imports (Control) Order was not correct. In the aforesaid view the Collector had not taken into account the OGL No. 4. Shri Banatwala also referred to clause 11 (4) of the Imports (Control) Order, 1955. He submitted that the Collector's order that the import of copra being canalised was accordingly prohibited was not correct. Referring to the Imports and Exports (Control) Act, 1947 and Section 3(1) thereof, Shri Banatwala submitted that this was an enabling section permitting Government to regulate imports of goods. The Imports (Control) Order and OGL No. 4 derive their source of authority from the Act itself.
There was no question of one replacing the other. Hence the Collector's interpretation in this behalf was not correct. However, in making these submissions, Shri Banatwala contended that he was not giving up the other grounds urged in the Memo of Appeal and he requested that the same should be taken into consideration and the appeal should be allowed.
2. On behalf of the Respondent learned Senior Departmental Representative Shri G.D. Pal submitted that the Collector had taken a very lenient view of the offence, by levying a fine of Rs. 20,000/- on goods valued at Rs. 20,09,461/- c.i.f. and by levy of the penalty amounting to Rs. 50,000/-. This amounts to only 3.5% of the c.i.f.
value of the goods. Shri Pal stated that the goods consisted of 460.839 M/Tons of copra imported in 7790 bags valued at Rs. 20,09,461/- c.i.f.
This import was made under Bill of Entry dated 20-2-1981 and was under the Policy for the year 1980-81. Appendix 16 to this policy contains OGL No. 4. This has been issued under Section 3 of the Imports & Exports (Control)- Act, 1947. Condition No. 13 of the OGL was relevant for the purpose of the present appeal. Shri Pal stated that OGL No. 4 was not a complete code as argued by the learned Advocate of the Appellants. Shri Pal referred to page 57 Chapter 15 para 344 on replacement licence in the Handbook of Import-Export Procedures 1980-81. He read Sub-para (3). This provided for issue of replacement licences where sub-paras (1) and (2) were not available. Shri Pal referred to Chapter 6 on canalisation and para 153 of the Handbook which stipulated that in case of any canalised goods the same could be imported only by the canalising agency. Even gifts of such articles were banned for import and the requests for clearance of such gifts were required to be addressed to the Chief Controller of Imports and Exports, who would examine these in the light of general provisions set down in Chapter 16 of the Import Policy for the year 1980-81. Chapter 16 of the policy dealt with import of gifts. But this was not relevant for the present purpose. So far as the import of copra was concerned the same was canalised for import through the State Trading Corporation under Appendix 9 para 5 of the Policy for the year 1980-81. Shri Pal therefore submitted that in view of the aforesaid requirements I.T.C.licence was necessary for permitting the clearance of the consignment of copra and that its clearance under OGL No. 4 could not be allowed.
Shri Pal further submitted that OGL No. 4 was a general provision while the requirement of I.T.C. licence was specific for the clearance of the goods as per para 344(3) of the Handbook. Shri Pal further contended that the specific provisions would over-ride the general provisions of the policy. The earlier consignment was imported by the Appellants as actual users under OGL in Appendix 10 of the Policy for the year 1977-78. But the import being canalised during the relevant policy year when the present consignment was imported, the clearance of the consignment under OGL No. 4 could not be permitted.
However, considering the extenuating circumstances the Collector had taken a lenient view. Shri Pal drew my attention to the Collector's findings on page 6 of his order. Shri Pal relied in this behalf on the judgment of the Punjab and Haryana High Court in the case of Oswal Mills Limited 1984 (18) E.L.T. 694 to the effect that import of beef tallow against R.E.P. Licence was held to be unauthorised if its import was banned and canalised only through the S.T.C. Similarly, he relied on the Delhi High Court's decision in Writ Petition Nos. 4037 and 4038 in the case of Jain Exports Private Ltd. and referred to pages 31 and 35 of the judgment. The ratio of the decision of the Delhi High Court was that the goods permitted for import under OGL No. 10 have to be unrestricted on import upto the date of their importation. Shri Pal argued that the importer had no absolute right for import of any goods.
The imports were governed by the policy at the relevant time. Copra was a canalised item for the STC when the goods under appeal were imported.
This was not challenged. In this behalf Shri Pal relied on the Supreme Court's decision in the case of Deputy Iron and Steel Controller, AIR 1972 SC 935. The Collector had considered the mitigating factors of the import and no further leniency could be shown to the Appellants. The other OGL in Appendix 10 of the Policy for the year 1978-79 was also subject to the same conditions. Shri Pal, therefore, submitted that there was no merit in the appeal and that the same should be rejected.
3. In reply Advocate Shri Banatwala referred to Appendix 10 of AM 79 policy. In particular he drew my attention to S.No. 8(vii) relating to copra in Appendix 10. He also drew my attention that the copra was also a canalised item for STC under Appendix 8 S. No. 45 so far as its use in the vanaspati industry and other industrial purposes was concerned.
Being a canalised item there was a condition in para (5) of Appendix 10 for the imports of copra under Appendix 10, S. No. 8. On 17-1-1977 the Government liberalised the policy for the edible oils and oilseeds and issued a Notification on that date, the salient features of which were incorporated in Public Notice No. 6-ITC(PN)/77, dated 17-1-1977. Shri Banatwala submitted a copy of this public notice for my inspection- Shri Banatwala contended that the import was in order and therefore the Collector's order was not legal or proper. So far as the objection raised by the SDR in respect of the Collector's order was concerned, Shri Banatwala argued that OGL No. 4 was a complete code and otherwise the Supreme Court's judgment in AIR 1972 SC 935 for giving vested rights to the importers would not apply. The Supreme Court's judgment dealt with the effect of paras 174(5), 176 and 231(3) of the Policy Book. So far as the Punjab and Haryana High Court judgment in the case of Oswal Mills 1984 (18) E.L.T. 694 was concerned, this was with reference to the implications of transitory provisions in para 231 which invalidated the R.E.P. licences. The final Chapter of the Policy for the year 1980-81 contained the transitory provisions. He drew my attention to para 215(1) on page 42 of the policy 1980-81 and submitted that these were not relevant for the present purposes. The Punjab and Haryana High Court was dealing with the interpretations of these provisions which appeared as para 222 (3) of the policy 1981-82. The Punjab and Haryana High Court in the judgment did not examine the provisions of OGL No. 4. He, therefore, submitted that the Collector's order should be quashed. He repeated the contention that OGL No. 4 was a complete code and referred to it in AM 81 policy. He reiterated his submission that it arose out of the provisions of the Imports and Exports (Control) Act. Clause 5 of OGL No. 4 permitted replacement within 24 months and when two years period was permitted under OGL No.4 it could not mean that it would be co-terminous with the policy. Shri Banatwala further argued that the Imports (Control) Order 1955 would not affect the Appellants rights under OGL No. 4. He also pleaded that the Tribunal should issue the detention certificate to the Appellants for claiming relief from the wharf rent charged by the Bombay Port Trust. With permission Shri Pal submitted that he had mentioned the Bombay High Court's and Punjab and Haryana High Court's decisions on identical issues as the present appeal. The Delhi High Court also considered the same issue. He referred to page 28 of the Delhi" High Court's decision in the case of Jain Exports Pvt. Ltd. These had references to OGL in conditions which were also mentioned. Shri Pal argued that OGL 1 and 2 were for one year and they lapsed with the policy. This was the observation of the Delhi High Court in the case of Jain Exports Pvt. Ltd. 4. I have examined the submissions made on both the sides. As the learned Advocate for the Appellants put it, the narrow compass calling for determination in the present appeal is the interpretation of Condition No. 13 of OGL No. 4. This condition stipulates that the OGL is without prejudice to the application to any goods of any other prohibition or regulation affecting the import that may be in forced at the time when such goods are imported. The Collector interpreted this condition to mean that since the import of copra was canalised through the STC for the policy period 1980-81 when the import took place,' the importer's claim for clearance of the consignment under OGL No. 4 was hit by this prohibition in terms of Condition No. 13 of the OGL. The learned Advocate for the Appellants has argued that this prohibition should be interpreted to mean prohibition under other laws and not under the Imports and Exports (Control) Act or the Imports (Control) Order, 1955. In support of his contention the Advocate relied on para 295 of I.T.C. Handbook of Rules and Procedures 1977-78 which specifically mentions the Health Laws, Drug Control Act, Arms Act, Explosives Act, Excise Act, etc., as examples of prohibitions under other laws. But this paragraph in the Handbook is of a clarificatory nature and is to the effect that an import licence issued is without prejudice to the operation of other prohibitions or laws, to which the imported goods may be subjected. In that context the illustrations of prohibitions under the other acts are given. The import licences, however, do not bear any such endorsement. On the other hand, OGL No. 4 is a specific provision enacted under the Imports and Export (Control) Act, 1947. If a condition of this OGL stipulates that it is without prejudice to the application of any other prohibition or regulation, it could mean only a prohibition or regulation under that act or the Imports (Control) Order only. It would be reduntant to incorporate this provision if it is to be implied that the prohibitions envisaged are those which are not under this act but under other acts. On the other hand, it is seen that OGL permits imports of replacement goods within 24 months or even a longer period if a warrantee permits such a period.
It is well known that the import policies are changed from year to year and often within one year itself. Any prohibitions or restrictions taken in the interest of the foreign trade of the country would be nullified if this condition is not stipulated in OGL No. 4. Therefore, the framers of the policy seemed to have taken good care to ensure that while trade is facilitated in respect of importing replacement goods and the trade does not have to seek an import licence, the imports do not defeat the policy relevant at the time of import. Therefore, it is immaterial whether the OGL is a complete code or not as contended by the learned Advocate of the Appellants. The other contention of the learned Advocate that both the OGL No. 4 and the Imports and Exports (Control) Order derive their source of existence or authority from Section 3 is also not relevant. While it is true that as per Clause 11(4) of the Imports (Control) Order no prohibition under the Imports (Control) Order applies to any goods covered by the OGL, it does not affect the validity of Condition No. 13 of the OGL, The Advocate's contention that both OGL No. 4 In Appendix 16 and the OGL in Appendix 10 have to be given identical meaning on account of common phraseology is really not helpful to the Advocate in enterpreting OGL No. 4 in the way he desires. The OGL in Appendix 10 also has an identical condition No. 12 corresponding to Condition No. 13 of OGL No. 4. So far as the prohibitions under the other Acts are concerned, the trade control authorities would not have the power to enforce them and therefore, it would be not necessary for them to incorporate this aspect either in the OGL or in the licence to be issued by the trade control authorities. The Advocate has also relied on Clause 11(4) of the Imports (Control) Order. This states that the provisions of the order do not apply to the import of any goods covered by the OGL. Relying on these provisions the Advocate has contended that the import in the present case is not hit by the restrictions under Condition No. 13 of OGL No. 4. This is really not a correct interpretation. The Import (Control) Order bans the import of all goods unless they are covered by the OGL or a specific licence. While the goods are covered by the OGL in the present case they do not satisfy the condition of the OGL.
Therefore the Collector has taken objection to the clearance of the goods in question not because the import is banned by the Imports (Control) Order, but because their import is not allowed by organisations other than the STC as per Condition No. 13 of the OGL. In other words, the matter involves interpretation of the condition of the OGL and not an interpretation as to what is permissible on import or otherwise. Shri Banatwala as also Shri Pal have relied on various judgments of the Supreme Court and the High Courts. These are mentioned in their respective submissions. By and large, they deal with validity of imports under licences or validity of imports under OGL in Appendix 10 wherein the import policy either subsequent to the placing of the order or at the time of importation of the goods has undergone a change. The judgments relied upon by the two sides are not specifically relating to importation under OGL No. 4. Though, therefore, they have validity by analogy only, they do not have a direct bearing on the issue under question. However, I am inclined to agree with the learned SDR's submission that the judicial pronouncements stipulate that if the goods are either prohibited or restricted at the time of their import the benefit of clearnace either under the OGL or a licence cannot be given to the goods. The ratio of these decisions would apply in the present case. So far as the present case is concerned, it is an undisputed fact that import of copra was canalised through the STC under Appendix 9, para No. 5(ii) of the Import Policy for the year 1980-81. Therefore this restriction would not permit the import of copra under OGL No. 4 in terms of condition No. 13. In this view, the Collector's order for confiscating the goods and levy of penalty on the Appellants is correct. Accordingly I confirm the same and reject the appeal.
5. The Appellants have also requested for issue of a detention certificate so that the Appellants could claim relief from the wharf rent from the Bombay Port Trust. It is seen that this aspect does not form a part of the Collector's order against which M/s Liberty Oil Mills approached the Government. Besides the issue of the certificate is not decided under the Customs Act and therefore this Tribunal does not have any jurisdiction to deal with the Appellants request for the issue of a wharf rent exemption certificate. Accordingly, this request of the Appellants is also rejected.