ORDER
P.K. Desai, Member (J)
1. The present appeal is directed against the Order-in-Original No S/10-98/84C dated 25.10.1984 of the Additional Collector of Customs, Bombay, ordering confiscation of the import consignment alleged to contain ceto stearyl alcohol, vide Section 111(d) of the Customs Act, but granting an option to the importer to pay Rs. 50000/- as fine in lieu of confiscation.
2. The appellants an Export House, filed four Bills of Entries on 30.3.1984, seeking clearance of the subject consignment with CIF value of Rs. 1,36,615/- as OGL item against Export House additional licence issued to them on 9.3.1983 i.e. during the policy period 1982-83 AM. The clearance was however objected to, amongst others, on the ground that the subject import was governed by the provisions of Para 185(7) of the Policy 1982-83 AM, whereunder the shipment ought to have taken place prior to 31.3.1983 whereas the subject item was shipped only on 30.3.1984. An objection was also raised that vide para 255(4) of 1983-84 AM policy, the licence was valid for items specified as OGL items in 1983-84 policy and as per para 185(1)(a) of the said Policy Book, the items importable were, raw material components and consumable figuring in Part II List 8 of Appx 10 but the items imported did not figure there. According to the department the item imported figured in Appx 3 Sr No. 10 as amended vide Public Notice No. 13/23-4-83-ITC. According to the department, the date of indent being 12.3.1984, date of opening of Letter of Credit being 19.3.1984 and date of shipment being 30.3.1984, the import was subsequent to the issue of the said Public Notice amending the Policy, and as such governed by the amended policy, making the import as not permissible under OGL. Notice to show cause dt 22.8.1984 as to why the consignment should not be confiscated vide Section 111(d) of C.A. 62 and penalty should not be imposed under Section 112 of the Customs Act, was therefore served on the appellants. In reply thereto the appellants contended that the licence having been issued during the Policy period AM 1982-83, the transitional arrangement contained in Para 255(4) of the Policy 1983-84 announced on 15.4.1983 was applicable, keeping such licences valid for import of OGL items in the said policy excluding those covered under Appx. 5. They pleaded that the Policy as announced on 15.4.1983, had only alcohols C-6 to C-12 included in Appx 3 at item No. 10 and it was only at a subsequent date that alcohols up to C-18 were included in the said Appx by issue of a Public Notice, which could not affect their licence. They also contended that even otherwise Para 185(1)(a) would not stand attracted as shipment had already taken place before 31.3.1984, and provisions of Para 185(5) permitted the same. They also pleaded that notwithstanding anything the item imported was different from alcohol C-16 and C-18 nor was it a simple mixture of the two, but was an item in itself having distinct characteristic duly classified separately under T.I. under heading 15.10.
3. The adjudicating authority after grant of personal hearing though observed that there was considerable strength in the contention of the appellants that the licence would be governed by Para 255 of Policy 1983-84, held that the item imported was put under Appx 3 Sr No. 10 in the Policy vide Public Notice dt 23.4.1983, and the date of shipment being subsequent thereto, when the importer was well aware that the licence had become non available for the said item, no clearance could be permitted. As regards the identity of the item imported, whether the same was covered by item No. 10 of Appx 3 of Policy 1983-84 he obtained and relied upon the report of Dy Chief Chemist in whose opinion the item could be ascertained from the predominant contents, which was alcohol C-18, and as such fell within the purview of item 10 Appx 3 of Policy 1983-84. In his opinion, if the restrictions were meant only for pure alcohols, a specific mention ought to have been made. As a result he passed the impugned order.
4. Shri JC Patel, the Ld Advocate for the appellants submitted that undisputedly, the item imported, assuming the same being only a mixture of alcohol C-16 and C-18, was under OGL during Policy 1982-83 under which the licence was issued to the appellants and they could have imported the same without any objection, vide Para 185(8) of the said policy, and pleaded that when the Policy for 1983-84 was announced on 15.4.1983 the same remained under OGL, the same remained as OGL item till the Public Notice dated 23.4.1983 came to be issued. In his submission, transitional arrangements were specified in Para 255 of the Policy 1983-84. Emphasising on the words “this Import Export Policy” in para 255(3) of the Policy Book 1983-84, he pleaded that prohibition as laid down in the Policy on the date of its announcement would determine the validity of the licence issued during the previous policy period, and would not stand affected by any subsequent amendment in the Policy. In support of the said submission, Shri Patel referred to and relied upon this Bench’s decision in Collector of Customs, Bombay v. Babubhai Patel, Order No. 1190/86 WRB dt 13.11.1986, in Appeal No. CD(T)(BOM) 366/80, as also on the decision of the Bombay High Court in Jayant Vegoils and Chemicals (P) Ltd and Ors. v. Union of India and Ors . He further pleaded that the appellants’ rights and availability of the licence stood determined on 15.4.1983, as the Public Notice cannot have any retrospective effect and placed reliance on the decisions cited hereabove. He also pleaded that even otherwise, the Policy could not be modified by any Public Notice, and relied upon the decision of the Bombay High Court in American Dry Fruit Stores v. Union of India and Ors. (Writ Petition No. 3422 of 1986, decided on 3.4.1990). He also pleaded that even otherwise, the item imported was neither alcohol C-16 or C-18 or mixture thereof but was a distinct item separately identified as distinct Tariff Item not obtained only by mixture of two alcohols but by a special process and for this he relied upon the certificate issued by Prof. VVR Subramanian, Professor of Oil Technology and Head of the Oil, Fats and Waxes Section of the Bombay University. He pleaded that taking all the factors into consideration the order of the adjudicating authority was not sustained.
5. Shri CP Arya, the Ld. SDR for the respondent, however, supported the order, and pleaded that the Policy stood amended as early as on 23.4.1983, and the import was about one year thereafter, and in spile of having knowledge about the same, the appellants imported the item. He stated that the import at all times remains subject to the prevailing policy provisions. The decisions cited, in his submission, could not stand attracted here.
6. Considering the submissions made, and the order of the adjudicating authority, there appears no dispute on the point that the appellant could have imported the subject consignment as OGL item during the policy period AM 1982-83 when the licence was issued. Further even assuming that the item imported was merely a mixture of alcohol C-16 and C-18 and criteria of principal ingredient was made applicable import of alcohol C-18, even under the subsequent policy period could have been made as OGL item, when the Policy for 1983-84 came to be announced on 15.4.1983 and it was only by virtue of the Public Notice dt 23.4.1983, that the said item was included in Appx. 3 and made not permissible under OGL.
6. Para 255(3) of the Policy 1983-84, on which much reliance is placed reads thus:
REP licences and Additional licences held by Export Houses/Trading Houses will cease to be valid for import of any item which could be imported under Open General Licence during 1982-83 but is no longer so in this Import-Export policy.
The authority below has referred to Para 255(4) of the said Policy which reads thus:
(4) Additional licences issued to Export Houses/Trading Houses during J982-83 will also be valid within their overall value, for import of raw materials, components, consumables and spares (excluding the items covered by Appendix 5), which can be imported under Open General Licence by Actual Users (Industrial) under the Import-Export Policy, 1983-84. This facility will also be available to Export Houses and Trading Houses holding REP licences which were endorsed during 1982-83 for import of OGL items.
Significantly the authority below has also held that there was a lot of strength in party’s contention that the licence would be covered by para 255(4) of the Policy 1983-84. The only point on which however he has refused clearance and ordered confiscation is that, with amendment in the Policy before the shipment, the licence did not remain valid for import of the item. This indicates that if such an amendment in the Policy, by issuance of the Public notice was not made, the clearance of the consignment would have been allowed.
7. It may be noted that para 255(3) and (4) cover up both REP licences and Additional licences.
8. The Bombay High Court, in Jayant Vegoils and Chemicals (P) Ltd v. Union of India had before it an identical issue pertaining to REP licence issued during the Policy period 1980-81 and similar provisions contained in para 222 of the Import and Export Policy 1981-82. The item under dispute was Beef tallow, which was importable under OGL when the Policy 1981-82 was announced, but became a canalised item vide Public Notice issued on 5.6.1981. The Bombay High Court, while negativing the contention from the department that once the item was made canalised, the import under OGL became not permissible, and in absence of specific provision to the contrary in para 222(3) of the said Policy, the import under the licence issued during the previous policy period, could not be made, held thus:
In my judgment, this paragraph deals with a situation existing at the time of declaration or publication of Import Policy of AM 82 and this paragraph cannot be attracted to an amendment carried out in the Import Policy of AM 82 for the first time on June 5, 1981. It is futile for the respondents to suggest that as soon as the policy was amended on June 5,1981, the import of beef tallow would be prohibited under the licences issued during 1980-81 unless firm commitment made by opening irrevocable Letters of Credit are established prior to April 1,1981.
Hon. Mr Justice Pendse, delivering the said judgment did visualise the possibility that holders of licence issued prior to the amendment and during the previous policy period could import under OGL whereas others had to go through canalising agency, and observed that:
but that would not prevent the licence holders who has secured the licence prior to that date. As there is no specific prohibition in the public notice affecting the earlier licence holders, it is not possible to disturb their rights.
The ratio of the said decision would mutatis mutandis apply here. The decision of the Bombay High Court, besides having a binding effect on this Tribunal is not shown by the Ld SDR to have been set aside or overruled or that the contrary view is held by High Court in some other judgement of a larger Bench, or by any other High Court.
8A. The question of allied nature was also before this Tribunal in Collector of Customs v. Babubhai Patel & Co. Order No. 1190/86 WRB dt 13.11.1986 where dealing with the provisions of Para 209 of the Policy 1978-79, laying emphasis on the words “in this Policy” and absence of the words “during this Policy”, held that it was clear that prohibitions imposed on the date of announcement of Policy could affect the licences issued during the previous Policy period.
9. Basing its conclusion on the Supreme Court judgement in East India Commercial Co Ltd v. Collector of Customs 1983-ELT 1342 : 1984 ECR 138 (SQ : ECR C Cus 269 SC this Bench in the aforementioned decision also held that Public Notices were not the orders issued under Section 3 of the Import and Export (Control) Act.
10. When the position is duly clarified by the Bombay High Court, in Re: Jayant Vegoils and Chemicals (P) Ltd (supra), and when the situation here is identical. inasmuch, as, the item imported (taking that to be the item as described by the department) was under OGL in Policy AM 1982-83 and import under Advance Licence issued during the said Policy period, and also remained under OGL in subsequent Policy 1983-84 when the same was announced, by virtue of Para 255(3) and (4) of the subsequent policy, the licence remained valid for import of the said item despite the fact that by subsequent public notice, the same was taken out from OGL.
11. The reasoning adopted by the authority below in rejecting clearance and ordering confiscation under the circumstances, does not appear proper and cannot be sustained.
12. When the appeal could be disposed of only on this point, it is not felt necessary to discus the other points urged including the one whether item is not the one covered under Appx 3 Item No. 10, though a mention may be made that considering the evidence produced, the submission made could not have been dismissed as baseless.
13. In the result, the order of the authority below is set aside and appeal is allowed with consequential reliefs.