IMPORTANT POINT
Import of Beef Tallow under Open General Licence was not permissible after issue of Import Trade Control Public Notice No 29-ITC (PN/81) on 5.6.1981.

Headnote:(i) Customs Act, 1962-Section 112-Penalty for improper importation of goods etc.-Import of Beef Tallow under Open General Licence by respondent-Collector imposing penalty under Section 112-Tribunal holding it was not unlawful therefore penal action under Section 112 was not called for-Appeal against to Supreme Court-Whether import of Beef Tallow under OGL was permissible after issue of Imports Trade Control Public Notice No. 29-ITC (PN/81) on 5th June 1981 clarifying that existing description "Mutton-Tallow" in Entry 44 shall be read as Tallow of any animal origin including Mutton Tallow ? (No)-Result-Collector was fully justified in imposing penalty under Section 112-Appeal allowed.
       Held : It is to be stated that the Tribunal relied upon its earlier decision by observing that the SLP against the said decision was dismissed by this Court summarily. But it is well settled law that in case where SLP is dismissed without assigning any reason, that order would not constitute a binding precedent. [Re: Ajit Kumar Rath v. State of Orissa [(1999) Supp. 4 SCR 302]. For levying of the fine also, it is to be stated that before issuance of licence to the respondent on 29.6.1981 by Import Trade Control Public Notice, it was clarified that existing description mutton tallow in Entry No.44 shall be read as any tallow of any animal origin including mutton tallow. The bills of entry were tendered only on 16.6.1983 and 1st July, 1983 respectively and at that time Import - Export Policy of 1983-84 was in force which prohibited import of beef tallow. Therefore, respondent has imported a prohibited item. It is also to be stated that respondent was experienced Export House well versed in the policies and procedure in regard to the import and export of goods as noted by this court in other matter of respondent. [Re: Jain Export Ltd. and others v. Union of India [(1993) Supp. 1 SCR 185]. Apart from the aspect that respondent was well versed with import and export policy, section 3 of the Import Control Order 1955, inter alia specifically provides that no person shall import any goods of the description specified in Schedule I except under and in accordance with a licence. The Collector has also referred to the conditions of licence and has observed that:-
       "The first condition on the reverse of the licence states that the import policy in relation to the goods and amendments made thereto up to and including the date of issue will be applicable to the goods. The licence was issued on 29.6.1981 on which date beef tallow was canalised."
       Further, in the Import Policy for April 1981 - March 1982 in paragraph 2, it has been specifically stated that "any amendment to this policy which may become necessary in the course of the year will be notified by means of Public Notices issued by the Chief Controller of Imports and Exports, from time to time". Same thing is stated in Import - Export Policy of the year 1982-83. In this view of the matter, it is apparent that respondent knowing fully well the import policy imported prohibited goods i.e. import of canalised item namely beef tallow and, therefore, the Collector was fully justified in imposing the penalty under Section 112 of the Customs Act. In the result, the appeal is allowed. The impugned judgment and other passed by the Tribunal is set aside and the judgment and order passed by the Collector of Customs is restored. There shall be no order as to costs. (Paras 15 to 20)
       (ii) Customs Act, 1962-Sections 112 and 125-Penalty for improper importation of goods etc. and option to pay fine in lieu of confiscation-Difference between the two.
       Held : From the aforesaid two sections, it is apparent that both operate in different fields, namely, one requires imposition of penalty and other provides for confiscation of improperly imported goods. Section 111 provides that goods brought from the place outside India are liable to confiscation if the goods are improperly imported as provided therein. In cases where goods are liable to confiscation, discretion is given to the authority to impose penalty. Further, Section 125 empowers confiscation of such goods and thereafter, confiscated goods vest in the Central Government. The Section further empowers the authority to give an option to the owner or the person from whom goods are seized to pay fine in lieu of such confiscation for return of the goods and the fine is also limited up to the market price of the goods. Therefore, levy of fine in lieu of confiscation is in addition to levy of penalty imposable under Section 112. (Para 10)

JUDGMENT

Shah, J.-The question involved in this appeal is - whether import of Beef Tallow under Open General Licence (hereinafter referred to as OGL ) was permissible after issue of Import Trade Control Public Notice No. 29-ITC (PN/81) on 5th June, 1981 clarifying that existing description Mutton Tallow in Entry No.44 shall be read as Tallow of any animal origin including Mutton Tallow ?

2. Appendix to Import Policy 1981-82 provides for list of items, import of which is canalised through public sector agencies. Item 44 provides that import of tallow of any animal origin including mutton tallow was canalised through State Trading Corporation of India.

3. It is contended by the respondent that OGL item was imported against licence dated 29.6.1981 which was an impress licence issued to M/s B. Arun Kumar and Co., Bombay under the import-export policy for the period 1981-82 and that respondent entered into a contract for import which was notorised on 6.6.1981. Subsequently, the written contract signed by the supplier was submitted to the New Bank of India for issuing letter of credit. However, as Bank refused the same and as on 3rd February 1983 notice was issued by the supplier for cancellation of the contract, Writ Petition No. 313 of 1983 was filed in the High Court of Delhi for various reliefs including the directions to the Bank to open letter of credit. On 30th March, 1983, letter of credit was actually opened. On 16th June, 1983 and 1st July, 1983, bills of entries for import of beef tallow were filed.

4. It is to be stated that before respondent could enter into alleged contract, it was clarified by the Import Trade Control Public Notice dated 5th June, 1981 that existing description mutton tallow under Entry 44 Appendix 8 is to be read as tallow of any animal origin including mutton tallow .

5. Hence, on 15.7.1983, the Department issued show-cause notice to the respondents. After receiving the reply and after hearing the respondents, the Collector of Customs, Bombay on 20th December, 1983 passed an order relevant part of which reads thus:-

"I order that the consignments of beef tallow imported by M/s Jain Shudh Vanaspati Ltd. for which they had presented the Bills of Entry listed in Annexure-I to this order, be confiscated under Section 111(d) of the Customs Act, 1962 read with Section 3(2) of Imports and Exports (Control) Act, 1947 and Section 11 of the Customs Act, 1962. I, however, permit them to re-export the goods within fifteen days of the receipt of this order or such extended time as may be allowed by the adjudicating authority. I impose a penalty of Rs.5 Crores (Rupees five crores only) on M/s Jain Shudh Vanaspati Ltd. under Section 112 of the Customs Act, 1962."

6. Aggrieved by the said order, respondents preferred Appeal No. C 247/84-C before the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi (hereinafter referred to as the Tribunal ). The Tribunal held that the question involved was considered in detail by it in its earlier judgment in Jain Sudh Vanaspati Ltd. v. Collector of Customs, Bombay [1990 (29) ECR 321 (Cegat SB-C)]. In the said decision, the Tribunal held that the right to import the goods under OGL is a statutory right and cannot be over-ruled by a public notice and that the import of Beef Tallow which ceased to be an OGL item when it was canalised by the public notice is governed by the Import Policy when the licence was issued and not by the public notice. Public notice has no statutory force under Section 3 of the Imports and Exports (Control) Act, 1947. The Tribunal also noted that the said decision was challenged before this Court by filing SLP Nos. 14605-06 and those SLPs were summarily dismissed by order dated 10th November, 1990. The Department s reference application against the said order was also dismissed. The Tribunal by its Final Order No.52/92-C dated 18th February, 1992 allowed the appeal and held that the import of beef tallow under OGL was not unlawful and, there

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2003 Supreme(SC) 123

IMPORTANT POINTImport of Beef Tallow under Open General Licence was not permissible after issue of Import Trade Control Public Notice No 29-ITC (PN/81) on 5.6.1981.

Cases Referred (2)

IMPORTANT POINT
Import of Beef Tallow under Open General Licence was not permissible after issue of Import Trade Control Public Notice No 29-ITC (PN/81) on 5.6.1981.