J.P. Devadhar, J.
1. In this petition, the Petitioners have challenged the order in original passed by the Collector of Customs, Nhava Sheva on 20th December, 1990 wherein a consignment of Poppy Seeds imported by the Petitioners have been confiscated and the Petitioners were permitted to redeem the said goods on payment of redemption fine of Rs. 1,00,000/- and penalty of Rs. 50,000/-.
2. The Petitioners had imported 44,730 Kgs. of Poppy Seeds from Hongkong at the rate of Rs. 6/- per Kg. The Petitioners sought clearance of the said goods under the REP licence acquired by them. Under the said REP licence, the Petitioners were entitled to import the 'seeds of vegetable/flowers (excluding oil seeds and dry fruits)'.
3. By a show cause notice dated 21-3-1990 the Assistant Collector of Customs called upon the Petitioners to show cause as to why the said goods should not be confiscated, inter alia on the ground that the imported goods being in the nature of consumer goods of agricultural original are covered by the Appendix 2B, serial No. 145 of the Import Policy 88-91 and, therefore, cannot be cleared under the REP licence furnished by them. It was further stated that cultivation of Poppy plant and product thereof are controlled and monitored by the Central Government and only those persons who have such permission of the Central Government are entitled to grow to Poppy plants. It was also stated that the valuation of the goods were grossly misdeclared by the Petitioners. The Petitioners in their reply contended that the licence procured by them is a specific licence valid to cover the imports of the Seeds of vegetable flowers and, therefore, Poppy seeds were liable to be cleared under the said REP licence.
4. By the impugned order in original dated 20-12-1990, the Collector of Customs held that the Poppy seeds were consumer goods and covered under para 7(10) of the Import Policy. The collector of Customs also held that the Poppy Seeds are capable of yielding oil and, therefore, the same would fall outside the category of the item permissible under the advance licence furnished by the Petitioner. The Collector of Customs also noticed that the Petitioners have themselves classified the goods under Heading 1207.91 of the Customs Tariff, which refers to the oil seeds. The Commissioner also found that that the value of the goods was grossly misdeclared. Accordingly, the Collector enhanced the value of the goods from Rs. 6/- to Rs. 12/- per Kg. For all the aforesaid reasons, the Collector confiscated the said goods under Section 111(d) of the Customs Act and permitted the Petitioners to redeem the goods on payment of fine in lieu of confiscation of Rs. 1,00,000/- and penalty of Rs. 50,000/-. Challenging the said order, the present petition is filed.
5. Mr. V. S. Nankani, learned Counsel appearing on behalf of the Petitioners submitted that the Petitioners do not have any grievance regarding the enhancement of the value of the Poppy Seeds declared by the Petitioners. However, the grievance of the Petitioners is that in the show cause notice, it is stated that the poppy seeds being consumer goods cannot be allowed clearance but in the impugned order it is held that the poppy seeds are oil seeds and therefore, not covered by the REP licence furnished by the petitioners. Mr. Nankani submitted that the impugned order which goes beyond the scope of the show cause notice and seeks to decide an issue which is not raised in the show cause notice, cannot be sustained in law. He submitted that even though Poppy seeds were consumer goods, in view of the specific endorsement made on the licence to the effect that the seeds of vegetable/flower were permitted to be imported under the REP licence, the Customs authorities could not have held that the importation of Poppy seeds was unauthorised. He relied upon the Judgment of the Tribunal in the case of Bombay Pharma Products v. Collector of Customs, Nhava Sheva reported in 1996(87) E.L.T. 625 Tri, wherein it is held that though Poppy seeds are 'consumer goods', it does not mean that they are not 'seeds'. It was held that even if Poppy seeds are consumer goods as per the items appearing in Appendix 2 Part B which are specifically described for import under the REP licence can be imported. In the light of the aforesaid decision, Mr. Nankani submitted that the Petitioners were entitled to clear the Poppy seeds imported by them under the REP licence furnished by the Petitioners and, therefore, the confiscation of the goods with redemption fine and penalty, is unjustified.
6. Mr. Desai, learned Senior Advocate appearing on behalf of the Respondents on the other hand relied upon the decision of the Tribunal in the case of Maxa Laboratories (P) Ltd. v. Collector of Customs, New Delhi reported in 1974 (73) E.L.T. 749 (Tri) and Maxa Laboratories (P) Ltd. v. Collector of Customs, New Delhi reported in 1995(80) E.L.T. 720 Tri. In the said decisions, the Tribunal had held that the Poppy seedsbeing consumer items used in every household in India, the import of Poppyseed is not allowed under Appendix 2 Part B of the Import Policy. Accordingto Mr. Desai, once it is held that Poppy seeds imported by the Petitionerswere consumer goods, the importation of the same was unauthorised and theCollector of Customs was justified in confiscating the goods and allowingthe petitioners to redeem the same on payment of redemption fine andpenalty.
7. After considering the rival contentions, we are of the opinion that the REP licence produced by the Petitioners did not authorise importation of Poppy seeds for more than one reasons. Firstly, the REP licence furnished by the Petitioner did not specifically permit the importation of Poppy seeds. Secondly, Poppy seeds are not seeds for vegetables/flowers. Admittedly the Poppy seeds are not used for cultivating vegetables. It may be that the flowers of the Poppy seeds may have some medical use. However, cultivation of Poppy seeds is regulated and cannot be cultivated without obtaining requisite permission from the Competent authority. Thirdly, the fact that the Poppy seeds are consumer goods is not disputed. Merely because the flowers of Poppy seeds as and when cultivated could be used for medicinal purposes, is no ground to hold that the Poppy seeds are covered within the meaning of 'seeds of vegetables/flowers'. Fourthly, it was not even the case of the Petitioners that the Poppy seeds were imported by them for the purpose of cultivating and obtaining flowers thereof. The view taken by CEGAT in the case of Bombay Pharma Products (supra) does not support the contention of the Petitioners, because, in that case the endorsement on the licence was 'seeds', whereas in the present case, the endorsement made on the licence is 'seeds of vegetables/flowers'. Therefore, under the REP licence in question, only those seeds for the purpose of vegetables/flowers could be imported. Admittedly, the Petitioners did not import Poppy seeds for cultivation of flowers. Under the circumstances, the importation being not covered by the licence, the Customs authorities were justified in confiscating the goods.
8. For all the aforesaid reasons, the petition fails Rule is discharged with no order as to costs.