COLLECTOR OF CUSTOMS, CALCUTTAversusM. SHASIDKANT AND CO.

                 COLLECTOR OF CUSTOMS, CALCUTTA                                  A
                                        \/.
                        M. SHASIDKANT AND CO.

                              JANUARY 8, 1992

            [S. RANGANATIIAN, KULDIP SINGH AND N. M.                             B
                          KASLIWAL, JJ .]

          Import-Export Policy 1978-79. Export House-Grant of additional Im-
    port Licence to import goods permitted under the Import Policy or those
    permitted at the time of import-Import of canalised item, Palm acid oil--
    Order confiscating the goods-Validity of-Held import was unauthorised        c
-   because the goods imported were banned under the import policy.

          The respondent-company applied for the grant or Export House
    Certificate under the Import Policy 1978-79 which was denied on the
    ground that it had not diversified its exports. The writ petition filed by
    the respondent in the Bombay High Court was allowed against which the        D
    Union or India rded a Special Leave Petition in this Court. By its order
    dated April 18, 1985 (Union of India v. Rajnikant Bros.) this Court
    dismissed the petition and directed the Union or India to issue the
    necessary Export House Certificate to the respondent. The said order
    stated that "save and except items which are specifically banned under
    the prevalent import policy at the time or import; the respondent shall      E
    be entitled to import all other items whether canalised or otherwise in
    accordance with the relevant rules."

          Py its judgment dated 5th March, 1986 in Raj Prakash G_hemicals v.
    Union of India, (1986) 1 S.C.R. 448 this Court clarified its order dated
    18th April, 1985 stating that only such items could be imported under F
    the additional licence as were permitted under the Import Policy at the
    time of import. However, those additional licence holders who had
    opened and established irrevocable letters of Credit before 18th October,
    1985 should be permitted to clear the imported goods notwithstanding
    the clarification of court's order dated 18th April, 1985. This judgm~nt _ G
    was approved by this Court in its subsequent decisions.

          Pursuant to this court's directions dated 18th April, 1985 the
    respondent was granted Additional Licence for the import of Palm acid
    oil-a canalised item under the Import Policy 1985-88. On 5th May 1986
    it entered into a contract with a Singapore firm and imported 4000 M.T.      H
    of Palm acid oil. The Collector of Customs confJSCated the goods on the
                                        7
    8                   SUPREME COURT REPORTS                  [1992] 1 S. C.R.

A   ground that import was unauthorised because it was a canalised item but
    gave the respondent an option to get the goods released on payment of
    a fine or Rs. 58,00,000.               ~


         The respondent preferred an appeal before the Customs Excise and
    Gold (Control) Appellate Tribunal which. allowed the appeal and set
B   aside the Collector's order on the grounds that : (i) the Additional
    Licence Holders were permitted to import canalised items; (ii) the
    import by respondent was bona fide; and (iii) the respondent's case was
    covered by a judgment of this court in B. Vijay Kumar v. Collector of
    Customs, Civil Appeal Nos. 4445 & 4446 of 1988 decided on December
    16, 1988.
c                                                                                     ~
         Against the judgment of the Tribunal, Union of India filed an
    appeal before this Court.

          Allowing the appeal, this Court,

D         HELD : 1. This court in its order dated April 18, 1985 categori-
    cally stated that "save and except items which are specifically banned
    under the prevalent import policy at the time or import, the respondents
    shall be entitled to import all other items whether canalised or otherwise
    in accordance with the relevant rules." There is no ambiguity in the
    order which makes it clear that the additional licence holders would not
E   be entitled to import ~he items which are specifically banned under the
    import policy 1985-88. No other interpretation is possible. The item
    imported by the respondent was a banned item under the import policy
    1985-88. The import was, thus, on the face of it unauthorised. [110-E,
    12-B]      .

F         2. In the face of clear and unambiguous judgments of this Court
    it was not open for the departmental authorities to entertain a contrary
    opinion. The Departmental officers were not justified in taking the view      .,_
                                                                                  .
    that the order permitted the import of canalised items. Therefore, the
    Tribunal fell into grave error in accepting the plea of bona fide raised by
    the respondent and setting aside the order of the Collector. Accordingly
G   the judgment of the-Tribunal is set aside and the order or the Collector
    of Customs is restored. [14-B, llE, 14-A, GJ

         Union of India v. Mis Godrej Soaps Ltd., [1986) 3 S.C.R. 771; Raj
    Prakash Chemicals v. Union of India, [1986) 1 S.C.R. 448; Indo-Afghan
    Chambers of Commerce & Anr. v. Union of India & Ors. etc., [1986) 3
H   S.C.R. 88; r~lied on.
             COLLECTOR v. SHASIDKANT [KULDIP SINGH, J.]                         9

    B. Vijay Kumar v. Collector of Customs., Civil Appeals Nos. 4445                 A
& 4446 of 1988 decided on 16.12.1988, held no longer good law. ·

       3. The respondent entered into contract with the foreign exporter
on May 5, 1986 much after October 18, 1985 and as such is also not
entitled to relief under the judgment dated 5th March, 1986. (12-F]
                                                                                     B
     CIVIL APPELLATE JURISDICTION: Civil appeal No. 5148 (NM)
of 1990.

     From the Order dated 26.3.1990 of the Customs, Excise and Gold
(Control), Appellate Tribunal, New Delhi in Appeal No. 3773/87 CA. Order
No. 773/90-A.                                                                        C
      A. Subba Rao and P. Parmeshwaran for the Appellant

     Anil B. Divan, C.S. Lodha, Sumeet Kachwaha, R.P. Wadhwani and
Abbas Naqvi for the Respandent.
                                                                                     D
      The Judgment of the Court was delivered by

       KULDIP SINGH, J. The respondent, 'Shashikant & Company, had
applied for the grant of Export House Certificate under the Import Policy
1978-79. The Certificate was denied on the ground that the respondent had
not diversified its exports. Against the said order the writ petition filed by the   E
respondent was allowed by the Bombay High Court and the respondent·was
held entitled to the Export House Certificate. Special leave petition filed by
the Union of India against the said order was heard along with a bunch of
similar petitions under the title Union of India v. Rajnikant Brothers. The
petitions were dismissed on April 18, 1985 by an order in the following              F
terms:

            "We have heard counsel for the parties and have gone through
            the judgments of the High Courts of Bombay and Delhi. We are
            unable to find, in the facts and circumstances of the case, any
            requirement of diversification of exports as a condition for the         G
            grant of Export House Certificates in the Import Policy for the
            year 1978-79. While confirming the High Court's Judgment
            quashing the order impugned in the Writ Petitions in the High
            Court we direct the appellants to issue the necessary Export
            House Certificates for the year 1978-79. The Export House
            Certificates shall be granted within 3 months from this date. Save       H
                                                                             I

    10                   SUPREME COURT REPORTS                    [1992] 1 S. C. R.
                                                                                 11




A               and except items which are specifically banned under the preva-
                lent import policy at the time of import, the respondents shall be
                entitled to import all other items whether canalised or otherwise
                in accordance· with the relevant rules. The appeals are disposed of
                accordingly with no order as to costs."

B         Pursuant to the above quoted directions of this Court the respondent
    was granted an additional licence dated September 4, 1985 for the import of
    Palm acid oil which was a canalised item under the Import Policy 1985-88.
    The respondent entered into a contract dated May 5, 1986 with a Singapore
    firm for supply of 4000 M.T. of Palm acid oil. The invoice in-respect of the
    said contract was dated September l, 1986 and the respondent filed the Bill
c   of Entry on September 11, 1986.

          The Collector Customs Calcutta by his order dated.October 31, 1986,
    confiscated the goods on the ground that the import of Palm Acid Oil-a
    canalised item-was unauthorised. The respondent was, however, given the
    option to get the goods released on payment of a fine of Rs. 58,00,000/- iri
D   lieu of confiscation.

          The appeal filed by the respondent before the Customs, Excise & Gold
    (Control) Appellate Tribunal (hereinafter called 'the Tribunal') was allowed
    and the order of Collector confiscating the goods was set aside. The Tribunal
    directed the refund of the redemption fee to the respondent.
E
          The Tribunal decided in favour of the respondent broadly on three
    grounds. It came to the conclusion that till September 12, 1986, when this
    Court delivered judgment in Union of India v. Mis. Godrej Soaps Ltd. [1986)
    3 SCR 771, the cu8toms authorities were interpreting the order of this Court
    dated April 18, 1985 (Rajnikant Case) to mean that the additional licence
F
    holders were pennitted to impart even the canalised items. Secondly the
    import by the respondent was bona fide because of the following factors :

          (a)   On April 3, 1986 in a meeting attended by Mr. Swaminathan,
                Member, Central Board of Excise and Customs, Mr. R.M. Singh,
G               Principal Collector of Customs and the representatives of the
                Federation of Indian Export Organisation, it was decided that the
                import of items, which were under Open General Licence during
                1978-79 and were categorised as canalised under the Import
                Policy 1985-88, would be allowed to the additional licence
                holders.
H
         (b)    The Government of India in its letter dated April 23, 1986 stated
                   COLLECTOR v. SHASHIKANT [ KULDIP SINGH, J.]                     11

--,(
                   that the Chief Controller Imports/exports, in consultation with the   A
                   Additional Solicitor General, has permitted the additional licence
                   holders to import canalised items against their licences.

             (c)   The Collector in his letter dated May 14, 1986 observed that
                   clearance of canalised items against the additional licences was
                   being unconditionally allowed.                                        B

             The Tribunal, therefore, found that the respondent, having acted on the
       representation of the Departmental authorities, was justified in importing the
       canalised item. Thirdly the Tribunal relied on the judgment of this Court in
       B. Vijay Kumar v. Collector of Customs, Civil Appeals Nos. 4445 & 4446 of
       1988 decided on December 16, 1988 and granted relief to the respondent in         C
       similar terms.

            This appeal before us is by the Union of India through Collector
       Customs Calcutta against the judgment of the Tribunal.

            We have heard Mr. A. Subba Rao, learned counsel for the appellant and        D
       Mr. Anil Divan, Senior Advocate on behalf of the respondent. This Court in
       its order dated April 18, 1985 (Rajnikant case) categorically stated that "save
       and except items which are specifically banned under the prevalent import
       policy at the time of import, the respondents shatl be entitled to import all
       other items whether canalised or otherwise in accordance with the relevant
       rules." There is no ambiguity in the order which makes it clear that the          E
       additional licence holders would not be entitled to import the items which are
       specifically banned under the import policy 1985-88. No other interpretation
       is possible. Some of the Departmental officers were not justified in taking the
       view that the order permitted the import of canalised items. In any case this
       Court in Raj Prakash Chemicals v. Union of India, [1986] 1 SCR 448                F
       decided on March 5, 1986 authoritatively interpretated the order dated April
.;     18, 1985 (Rajnikant case) as under :

                   "the Additional Licences to be issued to diamond exporters
                   entitled them to import item·s permissible to Export Houses under
                   such Licence under the Import Policy 1978-79 excluding those          G
                   items which fell within Appendices 3 and 4 of the Import Policy
                   1978-79 and also excluding items which fell in Appendix 3 and
                   Appendix 2 Part A of the Import Policy 1984-85. Upon what we
                   have said earlier, that is the meaning which we think must also
                   be given to the teims of the order dated April 18, 1985 of this
                   Court. Where the Import Policy prevailing at the lime of import H
     12                  SUPREME COURT REPORTS                    [1992] 1 s. c. R.

A               is the Import Policy 1985-88, the items excluded are those
                                                                                      ~--
                enumerated in the corresponding Appendix 3 and Appendix 2
                Part A of that Import Policy. That conclusion follows irresistibly
                on the analysis attempted by us and in the context in which the
                order was made."

B         This Court thus clarified that only such items could be imported under
    the additional licence as were permitted under the import policy 1978-79 and
    also at the time of import, which in the present case was the import policy
    1985-88. Admittedly, the item imported by the respondent was a banned item
    under the import policy 1985-88. The import was, thus, on the face of it un-
    authorised. This Court in Raj Prakash' s case, however, granted relief in the
C   following terms, to those importers who had opened irrevocable Letters of
    Credit before October 18, 1985 :

               "We think it appropriate that those diamond exporters who were
               granted Additional Licences under the Import Policy 1978-79
               and had opened and established irrevocable letters of Credit
D              before October 18, 1985 should be permitted, notwithstanding the
               construction we have placed on the order dated April 18, 1985 of
               this Court, to clear the goods imported, or to be imported, by
               them pursuant to such irrevocable Letters of Credit. In other
               words, all imports effected pursuant to such Letters of Credit
               should be deemed to have been legally and properly made, and
E              should entail no adverse consequences whatsoever ............ At
               the same time we make it clear that diamond exporters who
               pursuant to the issue of Additional Licences under the Import
               Policy 1978-79 have opened and established irrevocable Letters
               of Credit on or after October 18, 1985 will not be entitled to the
               benefit of this order."
F
           The respondent in this case entered into contract with the foreign
    exporter on May 5, 1986 much after October 18, 1985 and as such is not
    entitled to relief under the above judgment.

G         The order dated April 18, 1985 (Rajnikant case) and also the judgment
    dated March 3, 1986 in Raj Prakash' s case were considered by this Court in
    Indo-Afghan Chambers of Commerce'& Anr. v. Union of India & Ors. etc.,
    (1986) 3 SCR 88. Pathak, J. (as he then was) speaking for the Court summed-
    up the legal position as under :

H              "only such items could be imported by diamond exporters under
               COLLECTOR v. SHASHIKANT [ KULDIP SINGH, J. ]                         13

               the Additional Licences granted to them as could have been A
               imported under the Import Policy 1978-79, the period during
               which the diamond exporters had applied for Export House
               Certificates and h~ been wrongfully refused, and were also
               importable under the Import Policy prevailing at the time of
               import, which in the present case is the Import Policy 1985-88.
               These were the items which had not been "specifically banned" B
               under the prevalent Import Policy. The items had to pass through
               two tests. They should have been importable under the Import
               Policy 1978-79. They should also have been importable under the
               Import Policy 1985-88 in terms of the order dated April 18, 1985
               . . . . . . . . . . . . . . . In our opinion the respondents diamond exporters
               are not entitled to import dry fruits under the Import Policy 1985- C
               88 under the Additional Licences possessed by them. They are
               also not entitled to the benefit extended by the judgment of this
               Court dated March 5, 1986 to those diamond exporters who had
               imported items under irrevocable Letters of Credit opened and
               established before October 18, 1985. It appears from the record
               before us that the respondents diamond exporters opened and D
               established the irrevocable Letters of Credit after that date."

          In Union of India v. Mis. Godrej Soaps Pvt. Ltd, [1986) 3 SCR 771
f   decided on September 12, 1986 this Court finally considered the judgments
    in Raj Prakash and Afghan Chambers cases and approved the ratio therein
    in the following words :                                                              E

               "In respect of Palm Kernel Fatty Acid which is a canalised item
               listed as item 9(v) in Appendix V Part B of the Import Policy
               1985-88, there is no provision in that Policy which permits the
               import of such item by an Export House holding an Additional F
               Licence. Therefore, the claim of the diamond exporters, or, as in
               this case a purchaser from the diamond exporter, must fail
)              because it is not open to import by the diamond exporter, under
               any provision of the Import Policy 198~-88 ......... In this case'
               no injustice would be done by this order. The goods were
               purchased by the present petitioners only on 27th June, 1986 after G
               they were aware of the judgment of this Court in Raj Prakash' s
               case (supra) as well as lndo-Afghan Chambers of Commerce's
               case (supra). No question of any restitution of rights arises."

          There was no ambiguity in the order dated April 18, 1985 (Rajnikant' s
    case). Assuming it needed clarification, the same was done by this Court on           H
    14                    SUPREME COURT REPORTS                      (1992) 1 S. C.R.

A   March S, 1986 in Raj Prakash's case. The respondent entered into contract           ~-
    for the import of the item on May S, 1986 much after the judgment in Raj
    Prakash case. We are of the view that the Tribunal fell into grave error in
    accepting the plea of bona fide raised by the respondent and setting aside the
    order of the Collector. The opinions expressed by the officers in interdepart-
    mental communications is of no consequence. In the face of clear and
B   unambiguous judgments of this Court it was not open for the departmental
    authorities to entertain a contrary opinion.

          It is no doubt correct that the facts in B. Vijay Kumar's case relied upon
    by the Tribunal are somewhat similar to the facts in this case. This Court
    decided Vijay Kumar's case on the special facts ai1d circumstances of the said
C   case. This Court while deciding Vijay Kumar's case observed as under :

                "We do not consider it necessary to deal with these submissions
                in detail as we are of the opinion that in view of the special facts
                and circumstances of the case specially having regard to the
                findings of the Tribunal that the appellants imported the canalised
D               items of goods bonafide under the additional import licence
                granted to them in pursuance of the express conditions contained
                in the orders of this Court, which finding has not been challenged
                before us rather the Additional Solicitor General has fairly con-
                ceded the correctness of the findings of the Tribunal relating to
                the bonafide of the appellants in importing the disputed goods,
E               we are of the view that the Collector and the Tribunal both were
                not justified in confiscating the goods or in imposing redemption
                fine ............... We would like to emphasise that since we have
                decided the matter in view of the special facts and circumstances
                available in these cases this order will not be treated as a prece-
                dent."
F
         Even otherwise, in view of the judgments of this Court discussed
    above, we hold that B. Vijay Kumar's case does not lay-down correct law.

          We, therefore, allow the appeal with costs, set aside the judgment of the.
    Tribunal and restore the order of the Collector Customs Calcutta confiscating
    the goods and giving an option to the respondent to get the goods released
    on payment of fine of Rs. 58,00,000 (fifty eight lacs). We quantify the costs
    as Rs. 11,000.                                                   ·

    T.N.A.                                                        Appeal Allowed.