Delhi High Court
M/S. Samrat Industries vs Uoi And Ors. on 2 July, 2014
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on : 02.07.2014
+ W.P.(C) 1617/1997
M/S. SAMRAT INDUSTRIES ..... Petitioner
Through : Sh. G.L. Rawal, Sr. Advocate
with Sh. Rajesh Rawal and Sh. Jagjit Singh,
Advocates.
versus
UOI AND ORS. ..... Respondents
Through : Sh. Ritika Jhurani, for Sh. Sachin
Datta, Advocate.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE VIBHU BAKHRU
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)
%
1. The controversy in this case centres around interpretation
of para 197(2) of the Import-Export Policy 1985-88 (hereafter
"the IE Policy").
2. The petitioner feels aggrieved by an order dated
21.03.1997 made by the Appellate Committee constituted under
the said IE Policy. The Committee affirmed the order of the
adjudicating authority which had determined the penalty
payable by the writ petitioner to be `19 lakhs.
W.P.(C)1617/1997 Page 1
3. The petitioner was issued 45 REP licenses which inter
alia on their face mentioned "seeds" as articles capable of
importation. Relying upon paras 70(2) and 76 read with
Appendix 17 and para 75(1) of the IE Policy, the petitioner
imported consignments - rapeseeds, which was a canalised
item. It is not in dispute that all conditions save and except
those spelt-out in para 197(2) of the IE Policy, i.e. obtaining
prior permission of the Chief Commissioner of Imports and
Exports (hereafter "CCI&E") had been complied with.
4. At the time of importation, the Collector of Customs was
of the opinion that the goods were canalised and, therefore, not
capable of free importation. A Show Cause Notice was issued
which culminated in an adverse order. This was carried in
appeal by the petitioner to the erstwhile Customs, Excise and
Gold (Control) Appellate Tribunal (CEGAT), Madras Bench.
The Bench which comprised of a Technical Member and a
Judicial Member were divided in their opinion as to the
interpretation of various provisions of the IE Policy. The
Technical Member was of the opinion that para 197(2) of the IE
Policy which mandates prior approval of the CCI&E in certain
circumstances in respect of goods mentioned in Appendix 5
Part B but which did not find specific mention in Appendix 17
did not apply and that accordingly, importation was lawful. The
Judicial Member held otherwise. The third Member - Sh.
Gowri Shankar, to which the matter was referred, agreed with
W.P.(C)1617/1997 Page 2
the view of the Technical Member and held that upon an
interpretation of paras 70(2), 75(1) and 76 with relevant entries
in the appendices, the import of rapeseed, a canalised item, was
in the circumstances of the case, permissible without prior
approval.
5. In the meanwhile, Addl. CCI&E, in terms of the
provisions of the IE Policy issued Show Cause Notice as to why
penalty ought not to be imposed. After hearing the petitioner,
the adjudicating authority was of the opinion that the terms of
para 197(2) of the IE Policy had been violated. Accordingly,
penalty of `19 lakhs was imposed. Further consequence by way
of debarment from importation of articles and goods was also
imposed for 11 months. Further appeals to the higher authorities
were of no avail. Eventually, on 21.03.1997, the Appellate
Committee of the Ministry of Commerce too rejected the
petitioner's appeal. Learned counsel for the petitioner relied
upon Appendix 17 and urged that the specific heading "seeds"
contained in it, upon a juxtaposition with Appendix 5 Part B
(5), amply clarifies that both the said provisions contain specific
reference to "seeds" which eliminates the requirement of having
to obtain prior approval from the CCI&E. On the other hand,
learned counsel for the respondents urges that this Court should
not interfere with the impugned order which is well-reasoned
and has been issued concurrently by various authorities
competent to do so. It was urged that the plain text of para
W.P.(C)1617/1997 Page 3
197(2) of the IE Policy pre-supposes that in order to escape its
rigour, the item should specifically be contained in both
Appendix 5 Part B (5) as well as 17. Learned counsel urged that
in this case, since the petitioner wished to import rapeseed,
which was specifically mentioned in Appendix 5 Part B (5), the
corresponding entry of rapeseed ought to have been found in
Appendix 17. On the other hand, what was referred to was a
generic description of "seeds". Therefore, submitted learned
counsel for the respondents, the condition of prior approval
clearly applied.
6. During the submissions, it was brought to the notice of
the Court that the order of the CEGAT made in the light of
opinion dated 28.12.1995 of the third Member - Sh. Gowri
Shankar, was sought to be questioned by way of Reference
Petition. That Reference Petition was rejected by the CEGAT
on 15.07.1996. The respondent, i.e. the Customs Department
approached the Kerala High Court, which on 04.07.2013 (in
O.P. 4866/1997) held that the rejection of the Reference
Petitioner was not warranted. The Kerala High Court further
condoned the delay in preferring the Reference Petition and
remitted that matter to the CEGAT for deciding the reference
on merits. This position appears to be correct as is evident from
a reading of the order dated 04.07.2013 in O.P.4866/1997 by
the Kerala High Court.
W.P.(C)1617/1997 Page 4
7. In the above view of the matter, since as on date, the
order of the CEGAT has not been upset, we are of the opinion
that the impugned order taking a view different from that
adopted by the CEGAT cannot be sustained. Further, we are
also of the opinion that since the decision of the CEGAT is
under challenge, the appropriate course would be to grant
liberty to the respondent authorities to take appropriate action,
if necessary, having regard to any final orders made in the
reference proceedings, by the CEGAT or the High Court, as the
case may be, that may be adverse to the petitioner.
8 Before making any final order adverse to the petitioner,
the respondents shall grant it opportunity of hearing. The copy
of the order of the Kerala High Court dated 04.07.2013 in O.P.
4866/1997 is hereby taken on the record.
9. The writ petition is allowed in the above terms. No costs.
S. RAVINDRA BHAT
(JUDGE)
VIBHU BAKHRU
(JUDGE)
JULY 2, 2014
W.P.(C)1617/1997 Page 5
