ORDER
K.L. Rekhi, Member
1. The respondents herein imported the drug Amoxycillin Trihydrate. By his order dated 12.4.1983, the Collector of Customs, Cochin accepted the import licences produced by them and ordered release of the goods. The Central Board of Excise and Customs felt that the Collector’s order was not legal and proper and accordingly, in exercise of the power under Section 129-D of the Customs Act, 1962, the Board directed the Collector to apply to this Tribunal for determination of the question whether the import licences were valid to cover the importation of the goods. Thereupon, the Collector has filed the present application. The prayer made in the application is that this Tribunal should declare that the order dated 12.4.1983 of the Collector was not correct in law, that the goods had been imported in contravention of the Import Trade Control regulations and that, therefore, they were liable for confiscation.
2. Before starting the discussion, it would be worthwhile to notice the Collector’s order and the material portion of the Board’s direction under Section 129-D. We reproduce below the order dated 12.4.1983 of the Collector. The first three paragraphs of the order were the note put up by the Office for the Collector’s approval. The Collector approved the same and also added the fourth paragraph in his own hand.
The party seeks clearance of 2375 kgs. of Amoxycillin Trihydrate valued at Rs. 18,62,019.63 against two R.E.P. Export licences–Licence (1) Sl. No. 2871219 dated 23.9.1981 revalidated for 6 months from 27.9.1982 and (2) Licence No. 2890574 dated 16.7.1981 revalidated upto 27.12.1982. The clearance is claimed under OGL in terms of para 186(7) of the Policy for 81-82.
Amoxycillin Trihydrate became a canalised item on 16.10.1981 vide Public Notice No. 51-1TC (P.N. 81) dated 16.10.1981. Prior to that only Amoxycillin was a canalised item. The party claims that as on date of issue of the licence the item was not canalised. Therefore irrespective of the year of import, the policy to be applied is the policy as on date of issue of the licence. As such both the licences are valid for the import of the goods in question.
From the documents produced, it is seen that firm order was placed on 23.12.1972 and L.C. was opened on 3.1.1983. If we are to apply the provisions of para 231(3) page 57 of the Policy 82-83 neither of the two licences are valid for the import. However, the department’s view on earlier occasions has been that the Policy as on date of issue of the licence in the case of R.E.P. Export licence. Viewed in this light, and also considering the fact that the revalidation has been made without any conditions attached, licence at Sl. No. 1 above may be held to be valid since L/C was opened during the currency of the licence. Regarding licence at Sl. No. 2 the L/C. was opened during the grace period of the licence which is not allowed vide para 209(4) of the Hand Book of Import Export Policy. As such clearances against the second licence cannot be allowed.
Seen para 209 of the Hand Book in this case the order was placed for the goods before the grace period started. Only the L.C. was opened soon after the commencement of the grace period. The short delay in opening the L.C. is condoned. The second licence may also be accepted.
Sd/- (Bhujangaswamy)
Collector of Customs
12.44.1983
3. In paragraph 3 of their direction made on 25.4.1984 under Section 129-D, the Board recorded the following grounds for which the Board felt that the Collector’s order was not legal and proper and that the goods had been imported in contravention of Import Trade Control restrictions:
(i) It is a fact that the licences were issued on 23.9.1981 and 16.7.1981 i.e. prior to the issue of Public Notice No. 51/ITC dated 16.10.1981 and as per endorsement for revalidation they were valid upto 26.3.1983 and 27.12.1982 respectively. But the Authorities who are empowered Under Section 3(i) of the Import and Export Control Act, 1947 to prohibit or restrict the import and export taking into consideration the public interest, in this regard, had restricted the import of the item Amoxycillin Trihydrate by canalising it w.e.f. 16.10.1981 and the Public Notice for the canalisation of this item did rot provide for any exemption regarding the import of the same under O.G.L. in respect of licences already issued prior to 16.10.1981. Such being the case, the additional licences in question are not valid for import of the subject goods.
(ii) By issue of I.T.C. Public Notice No. 11/82 dated 25.2.1982 import of O.G.L. items by Export Houses against R.E.P./Additional licence was restricted upto 31.3.1982 or till the expiry of the validity of the licences (without grace period) whichever is earlier. The dates of the expiry of the validity of the licences in question were 26.3.1983 and 27.12.1983 (revalidated dates) and hence the import of the goods in question could be made only upto 31.3.1982. But the shipment of the goods was effected only on 25.2.1983. The endorsement for revalidation of the licences did not indicate any special provision for the import of the goods in question. Therefore, the licences produced by the importer were not valid for the import of the subject goods.
(iii) According to para 231(3) of the Import Policy for 1982-83, R.E.P. licences/additional licences issued to Export Houses/Trading Houses during 1981-82 policy period would cease to be valid for the import of any item which could be imported under O.G.L. during 1981-82 policy period, but no longer so during 1982-83 policy period. In this case, both the licences had been issued during 1981-82 policy period but since Amoxycillin Trihydrate became canalised item w.e.f. 16.10.1981 and continued to be so during 1982-83 policy period, this item could not be imported by the party against the import licences in question during 1982-83 policy period.
4. We have heard both sides and have carefully considered their submissions and the records of the case. The respondents made a preliminary objection saying that the order of the Collector dated 12.4.1983 was an administrative order, that it had not been made by the Collector “as an adjudicating authority” and that, therefore, the Board was not competent to review it under Section 129-D. We find from the Collector’s order that he considered the question whether the import licences tendered by the respondents were valid to cover the importation of the goods or not. For reasons recorded in writing, the Collector concluded that the licences were valid. He noted certain other deficiencies vis-a-vis the Import Control regulations but he condoned the same. The order was, therefore, clearly one passed on a point of dispute relating to validity of import licences. It was passed by the Collector in exercise of his powers under the Customs Act, 1962 read with Imports and Exports (Control) Act, 1947. It was not an order passed by the Collector in his administrative capacity. It is quite another matter that the Collector’s conclusion went in favour of the respondents and there was, therefore, no occasion to issue a show cause notice to the respondents or to hear them. But that would not make the order as anything other than an order of adjudication. We, therefore, over-rule the preliminary objection of the respondents.
5. Coming to the three specific grounds set out in the Board’s direction, the respondents relied on Mangla Brothers v. Collector of Customs and Ors. In that case, the same drug Amoxycillin Trihydrate had been imported and objection was taken by the Department on the ground that after the issue of the import licence in that case but before importation of the goods the import of the drug had been canalised. The High Court held that the licence issued during a Policy period was governed by that Policy as amended upto the date of the licence and any amendment made after the date of issue of the licence could not have any effect on the licence. In the case before us also, import of the drug was not canalised as on the date of issue of the import licences to the respondents. It was canalised later on 16.10.1981. Respectfully following the Calcutta High Court judgment, we hold that no objection could be taken to the importation made by the respondents on the ground of subsequent canalisation. So far as the ground (i) and (ii) listed in the Board’s direction are concerned, we notice that I.T.C. Public Notice No. 11/82 dated 25.2.1982 and para 231(3) of the Import Policy for 1982-83 expressly placed certain restrictions in respect of the licences already issued. The respondents fairly conceded that this Tribunal was not the forum before which they could challenge the vires of the said Public Notice or the said para or take the plea that the authority issuing them was not competent to impose such restrictions. The Public Notice and the para have, therefore, to be interpreted on their plain meaning and the restriction contained therein given effect to because, if that is not done, the Public Notice and the para of the Policy would be rendered nugatory and infructuous. It is not open to this Tribunal to adopt an interpretation which would make a provision ineffective or meaningless.
6. ThePublicNoticeNo.il/82enabled the respondents to import the drug in question only upto 31.3.1982. This Public Notice was not before the Calcutta High Court in the aforesaid case of ‘Mangla Brothers’ but a similar restriction as to the time-limit made in the next year’s Import Policy i.e. para 185(7) of Import Policy for 1982-83, was brought to the High Court’s notice. The High Court observed:
The time-limit can always be prescribed by Import Policy as has been done in para 185(7) of 1982-83 Policy.
The Public Notice was, therefore, legal and it applied to the respondent’s licences even though the said licences had been issued earlier when the restriction as to the time-limit did not exist. Inasmuch as the respondents imported the drug long after the cut-off date (31.3.1982) was over, the import has to be held in contravention of the Import Control regulations.
7. We now come to ground (iii) contained in the Board’s direction. This ground is with reference to para 231(3) of the Import Policy for 1982-83. In the case of ‘Mangla Brothers’ the import licence of the importer for the drug had been revalidated but while the revalidation endorsement specifically invoked the restrictions imposed under para 231(1), 232(2) and 231(4) of the Policy, it omitted para 231(3). The Calcutta High Court held that this omission was significant and because of the deliberate omission the restriction of para 231(3) could not be applied to the licence in their case. In the case before us, there is no such omission, The restriction of para 231(3) therefore, applied to the import licences of the respondents and the said licences were no longer valid for import of the drug in question.
8. Certain other points were also made before us, such as whether the respondents had opened the Letter of Credit during the normal period of the licences of during the grace period, whether the Collector was competent to condone opening of the Letter of Credit during the grace period or not, etc. Since these points fall outside the ambit of the Board’s direction made under Section 129D, we do not consider it necessary to go into them.
9. In the light of our above discussion, we declare that the order made by the Collector on 12.4.1983 was not legal and proper and we, therefore, annul the same. We also declare that for the grounds (ii) and (iii) [but not (i)] contained in the Board’s direction made under Section 129D, the import licences produced by the respondents were not valid to cover import of the drug Amoxycillin Trihydrate and the goods were, therefore, liable to confiscation and the respondents were liable to a penalty. The application made by the Collector in pursuance to the Board’s direction (and deemed as an appeal by the Collector before the Tribunal) is allowed in these terms.