M/S. DARSHAN OILS PVT. LTD. AND ANR. ECT. ETC.versusUNION OF INDIA AND ORS.

A          MIS. DARSHAN OILS PVT. LTD. AND ANR. ECT. ETC.
                                       v.
                         UNION OF INDIA AND ORS.

                             NOVEMBER 8, 1994
B                 [J.S. VERMA AND K.S. PARIPOORAN, JJ.]

        Import and Export (Control) Act, 1947-Section 3-lmport and Export
    Policy for period April, 1983 to March, 1984-Public notice amending the
    policy-Import of fatty acids could be made only by State Trading
c   Corporation under Open General Licence-Exception limited to actual
    shipment made prior to issue of public notice dated 11.11.1983-Whether
    amendment could be termed unreasonable or unduly restrictive-Held,
    No-Classification between goods in transit and those of which transit had
    not begun-Held: Neither irrational nor unreasonable.
D      Administrative Law-Promissory estoppel-Export Import Policy-
    Amendment-Applicabi/ity ofdoctrine ofpromissory estoppel.

        The Import an:I Export Policy for the period 1.4.1983 to 31.3.1984
    was declared by the Central Government by issue of an order in
E   exercise of the powers conferred by Section 3 of the Import and Export
    (Control) Act, 1947 giving general permission for Import into India of
    raw materials, components and consumables by actual users
    (industrial) subject to certain conditions.

         Split stear in fatty acids were not a canalised item under that
F   Policy. The appellants entered into a contract with a foreign supplier
    for import of fatty acids and on 3.10.1983 opened an irrevocable letter
    of credit in favour of the foreign supplier. On 11.11.1983, the Central
    Government issued a public notice amending the said Policy whereby
    the import of fatty acids became a canalised item. The only exception
    made for import of the canalised items under import licences already
G   issued was in respect of the shipments already effected from the
    country of origin before the date of said amendment. The shipment of
    fatty acids by appellants, not being covered by the exception made in
    the amendment and the import being not through the State Trading
    Corporation, the appellant was denied the benefit of its import being
H   covered by the Policy prior to its amendment.
                                       278
                   DARSHAN OILS (P) LTD. v. U.0.1                  279

    A writ petition filed in the High Court challenging the amendment A
made by the public notice dated 11.11.1983 was dismissed. Hence, this
appeal.

     Appellants submitted that an irrevocable letter of credit having
been opened by the appellant in favour of foreign supplier on 3.10.1983
prior to amendment of the Policy, it was not feasible for the appellants B
to prevent the shipment of the goods thereafter and, therefore, not
extending the benefit of exception to such cases also, confining the
exception only to actual shipments made prior to issue of public notice
dated 11.11.1983, was unreasonable and violative of Article 14 of the
Constitution of India. It was also submitted that amendment 9f the C
Import Policy by issue of a public notice could be only prospective, but
in this manner it had been made retrospective.

    The respondent contended that the only consequence of the
amendment was an increase in the tax which was not violative of
Articles 14 and 19 of the Constitution of India.                D

    Dismissing the appeal, this Court

     HELD 1.1 The entitlement to import items which were canalised
or not, is governed by the Import Policy prevalent at the time of E
import. In the present case, the import of a canalised item being made
after amendment of the Policy by the public notice dated 11.11.1983 in
a manner not permitted by the amended Policy, the appellant cannot
claim to avoid the logical consequences of the import being made
contrary to the Import Policy prevailing at the time of Import of the
goods. Exemption under the amended Policy being limited to shipment F
already made cannot be termed unreasonable or unduly restrictive.
Obviously, the exception was made to cover only those goods of which
the shipment had been made and were in transit, excluding all such
goods of which no shipment had been made. The classification between
goods in transit and those of which the transit had not begun, cannot be G
called irrational or unreasonable in the context. (283-E-F)

     D. Navinachandra and Co. Anr Etc. v. Union of India and Ors., [1987)
2 SCR 9~?" relied on and Mis Universal Imports Agency and Anr v. Chief
Controller of Imports and Exports and Ors, (1981) 1 SCR 305
distinguished.                                                            H
    280                     SUPREME COURT REPORTS          [1994] SUPP. 5 S.C.R.

A        1.2. Doctrine of promissory estoppel is inapplicable in the facts and
    circumstances of the case. Equities have to be balanced and public
    interest must outweigh individual interest. Withdrawal of benefit of
    exemption from payment of duty etc. can be made in public interest
    during the period for which the benefit had earlier been intended.
B   Kasinka Trading and Anr. Etc. v. Union Of India, [1994] suppl. 4 SCR,
    448, relied on. (283-A-C).

        Kaplan's Enterprises and Anr. v. Union Of India, AIR (1986) Delhi
    221, distinguished.

C        CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7153of1994
    etc. etc.

       From the Judgment and Order dated 20.8.93 of the Bombay High
    Court in W.P.No 434 of 1984.
D
          H.N. Salve, S.K. Ghambir and Yivek Ghambir for the Appellant.

         A. Subba Rao, R. Sasi Prabhu, V.K.Verma and Ms. Sushma Suri for
    the Respondents.

E         The Judgment of the Court was delivered by

          VERMA, J. Leave granted in all the special leave petitions.

        Civil Appeal No. 7I53 of I994 [arising out of SLP (CJ No. 20837 of
    I993}
F
        The Import and Export Policy for period 1.4.1983 to 31.3.1984 was
    declared by the Central Government by issue of an order in exercise of the
    powers conferred by Section 3 of the Import and Export (Control) Act,
    1947 giving general permission for import into India of raw materials,
G   components and consumables by actual users (industrial) subject to certain
    conditions which included the following :-

                    "22. Items covered under. Part-111 of the Schedule to this
                    licence can be imported under OGL by Actual Users
H                   (Industrial) and others, for stock and sale;"
               DARSHAN OILS (P) LTD. v. U.0.1 [VERMA, J.]                281

               "26. Such goods are shipped on through consignment to A
               India on or before 31st March, 1984 or in the case of Actual
               Users (Industrial) on or about 30th June 1984 against
               confirmed orders for which irrevocable letters of credit are
               opened and established on or about 29-2-1964 with no
               grace period whatsoever."
                                                                               B
     Split stearin fatty acids were not a canalised item under that Policy.
The appellant entered into a contract with a foreign supplier for import of
fatty acids on 1.8.1983 and on 3.10.1983 opened an irrevocable letter of
credit in favour of the foreign supplier. On 11.11.1983, the Central
Government issued a public notice amending the said Policy for the period
April 1983 to March 1984 whereby the Import of fatty acids became a C
canalised item. The amendment clearly provided that import of fatty acids
could be made only by the State Trading Corporation under Open General
Licence and therein it was stated as under :-

               "3. Import of items referred to in para 2 of this public notice
               shall not be allowed under any import licence already D
               issued or under paras 31, 34, 37, 38, 138, 148 and 203 of
               the Import and Export Policy, 198~-84 or under any other
               provision of the Import and Export Policy 1983-84, except
               against shipments from the country of origin already
               effected before the date ofthis public notice. This restriction
               will not, however, apply to the Imports by STC of India E
               Ltd."

                                                        (emphasis supplied)

     Thus the amended Policy effective from 11.11.1983 made it clear that
import of fatty acids was not allowed thereafter even under any import F
licence already issued "except against shipments from the country of origin
already effected before the date of this public notice". In other words, the
only exception made for import of the canalised items under import
licences already issued was in respect of the shipments already effected
from the country of origin before the date of said amendment, that is, of G
shipments of which transit had already commenced from the country of
origin. The shipment in question arrived at Bombay on 9.2.1984 and it is
not the appellants case that this shipment falls within the exception
indicated above. This being so the shipment of fatty acids in the present
case, not being covered by the exception made in the amendment to the
Policy effective from l l. l l .1983 and the import being not through the State H
    282                    SUPREME COURT REPORTS           [1994] SUPP. 5 S.C.R.

A   Trading Corporation, the appellant has been denied the benefit of its import
    being covered by the Policy prior to its amendment:

        The appellants filed a writ petition in the Bombay High Court
    challenging the amendment made by the public notice dated l l.l l.1983.
    That writ petition having been dismissed, this appeal has been filed by
B   special leave.

         The challenge to the public notice dated 11.11.1983 by the appellants
    in the High Court was based mainly on the doctrine of promissory estoppel
    which· has been rejected by the High Court. A similar challenge on the
    ground of promissory estoppal has been rejected by this Court in Kasinka
c   Trading and Anr. etc. v. Union Of India and Anr., [1994) Suppl. 4 SCR
    448. Accordingly, decision of the Delhi High Court in Kaptan's Enterprises
    and Another v. Union of India, AIR (1986) Delhi 221 cannot furnish any
    support to the appellants in the present case. Shri Harish Salve, learned
    counsel for the appellants made no attempt to support the appellants case on
    the doctrine of promissory estoppel. This point does not therefore, require
D
    any further consideration.

         The submission of Shri Harish Salve, learned counsel for the appellants
    is that an irrevocable letter of credit having been opened by the appellants
    in favour of the foreign supplier on 3. l 0.1983 prior to amendment of the
E   Policy by the public notice dated l l.l l.1983, it was not feasible for the
    appellants to prevent the shipment of the goods thereafter, and therefore,
    not extending · the benefit of exception to such cases also, confining the
    exception only to actual shipments made prior· to issue of public notice
    dated l l.ll.1983, is unreasonable and violative of Article 14. Learned
    counsel submit that opening of an irrevocable letter of credit prior to issue
F   of the public notice being lawful, its consequence could not be made
    unlawful by a subsequent amendment of the Policy. Learned counsel also
    submitted that amendement of the Import Policy by issue of a public notice
     can be only prospective, but in this manner it has been made retrospective.
     Shri Subba Rao, learned counsel for the Central Government submitted that
G   the exception is applicable only to such goods which were already in transit
     on account of the shipments having been made and the only consequence of
    the amendment is an increase in the tax which is not violative of Articles 14
    and 19 of the Constitution.

        We are unable to accept the submissions of the learned counsel for the
H   appellants. These submissions are merely a different facet of the doctrine of
               DARSHAN OILS (P) LTD. v. U.0.1 [VERMA, J.]               283

promissory estoppel which has been held inapplicable in such a situation. In A
Kanish/ca Trading which related to withdrawal of exemption from payment
of duty etc., in exercise of the statutory powers, it was reiterated that the
power to exempt includes the power to modify or withdraw that benefit and
the liability to pay duty under the Customs Act, 1982 arises when the
taxable event occurs being subject to payment of duty as prevent on the B
data of the entry of the goods: It was held that the doctrine of promissory
estoppel could not be invoked to question the withdrawal of notification
issued under Section 25 of the Customs Act, 1982 when it was done in
public interest. Equities have to be balanced and public interest must
outweigh individual interest, Kanish/ca Trading clearly holds that
withdrawal of such a benefit can be made in public interest during the C
period for which the benefit had earlier been intended, in our opinion, this
is sufficient to indicate the fallacy inherent in the submissions made on
behalf of the appellant.

    In D. Navinachandra and Co. Bombay and Anr. etc. v. Union of India
and Ors., [1987] 2 S.C.R. 989, it was clearly held that the entitlement to D
import items which were canalised or not, is governed by the Import Policy
prevalent at the time of Import. In the present case, the import of a
canalised item being made after amendment of the Policy by the public
notice dated 11.11.1983 in a manner not permitted by the amended Policy,
the appellants cannot claim to avoid the logical consequences of the import E
being made contrary to the Import Policy prevailing at the time of import of
the goods. Exemption under the amended Policy being limited to shipments
already made cannot be termed unreasonable or unduly restrictive.
Obviously, the exception was made to cover only those goods of which the
shipment had been made and were in transit, excluding all such goods of
which no shipment had been made. The classification between goods in F
transit and those of which the transit had not begun, cannot be called
irrational or unreasonable in the context.

    Reliance by Shri Harish Salve on the decision in Mis. Universal
Imports Agency and Another v. The Chief Control/er ofImports and Others, G
[1981] l S.C.R. 305, which deals with the meaning of the expression
"things done" in a general sense is misplaced. In the present case the
language of the exception made in the amended Import Policy is clear and
unequivocal excluding from its ambit all such goods, except those in transit
because of the shipment having already been made. That decision does not,
therefore, require any further consideration.                                  H
    284                    SUPREME COURT REPORTS          [1994] SUPP. 5 S.C.R.

A       For the aforesaid reason, the appeal has no merit and is dismissed with
    Rs. 10,000 (Rupees ten thousand) only as costs

        Civil Appeal Nos. 7154 and 7155. of 1994 (arising out ofSLP (C) Nos.
    13040 and 14337of1994).

B       In view of the decision in Civil Appeal No. 7153of1994 [arising out
    ofS.L.P. (C) No. 20837of1993], these appeals are also dismissed with Rs.
    10,000 (Rupees ten thousand) only as costs in each appeal.

    A.G.                                                    Appeals dismissed.