JUDGMENT

KASLIWAL. J. :— Special leave granted.

2. Two important questions are involved in the case out of which one is relating to Import Policy and the other is regarding the duty payable under the Customs Act, 1962.

3. Facts relating to the question of Import Policy are that the Government of India framed Import Policy for the years 1985-88 under which import of items under Open General Licence (in short OGL) have been mentioned under Appendix 6 Entry No. 1 as under:

(1) Raw materials, components and consurnables (non-iron and steel items) other than those included in the Appendices 2, 3 Part (a), 5 & 8.

Appendix 5 Part B provides for petroleum products, fertilizers, drugs, feature films, video films, oil/ seeds, cement, cereals, newsprint, photo assistance etc. Under the head oils/ seeds item No. 5 reads as under:

"In the case of the following items, whether edible or non edible, import will be made by the State Trading Corporation (STC)/ Hindustan Vegetables Oil Corporation, New Delhi (A Govt. of India Undertaking) under Open General Licence on the basis of foreign exchange released by the Government in its favour, imports, distribution and their pricing will be made by the State Trading Corpn./ Hindustan Vegetables Oil Corpn., New Delhi as per the connected policy of the Government in the Ministry of Food & Civil Supplies, Deptt. of Civil Supplies."

Out of the 9 items under this head, we are concerned with SI. No. 4 which provides as under

Palm Oil (all types including Palmolein and other fractions)/ Palm seeds.

Thus according to the above provision Palm seeds were canalised items falling under Append7x 5-B of the said Policy. The Imports & Exports (Control) Act, 1947 empowers the Central Government to prohibit, restrict or otherwise control imports and exports. In exercise of the powers conferred in the above Act, the Imports (Control) Order, 1955 has been issued. Schedule 1(1) to the said Order contains the list of articles of which imports are controlled. The import of such items. is prohibited except: (i) under and in accordance with a licence or a customs clearance permit issued under the said Order, or (ii) if they are covered by an OGL (subject to such conditions as may be stipulated) or (iii) if they are covered by the semi-clause (ii) of the Imports (Control) Order.

4. Open General Licence No. 1/87 dated 1-4-1987 provided as follows:

"Import Trade Control Orders Nos. 68/ 8588, OGL No. 1/87 dated 1-4-87 in exercise of the powers conferred by S. 3 of the Imports & Exports (Control) Act, 1947, the Central Government hereby gives general permission to import into India from any country, except the Union of South Africa/ South -West Africa, raw materials, components and consumables by actual users (industrial) subject to the following conditions:

The item to be imported are not covered by Appendices 2, 3, 5 & 8 of Import & Export Policy for the year 1985-88 Vol. 1 as amended from time to time by issue of a Public Notice in the Official Gazette."

Clause 32 with which we are concerned, reads as under:

Clause 32:-

"Such goods are shipped on through consignment to India on or before 3 1 st March on the licensing Order or, in the case of actual users (industrial), on or before 30th June of the following licensing year against firm order for which irrevocable letters of credit are opened and established on or before last date of February of the licensing year, without any grace period whatsoever."

5. M/s. Priyanka Overseas Private Limited (hereinafter referred to as the appellant) made a contract for import of 35,000 MT of Palm Kernel" on 10-6-87 with the foreign suppliers. The contract was entered as an agent on behalf of various actual users.. On 27-7-87 the Chief Controller of Imports & Exports issued a Public Notice No. 205-ITC (PN)/85-88 canalising import of "any other material from which oil can be extracted." Under the above contract 11,570.570 MT of Palm Kernel was shipped by the foreign seller from Nigeria to the appellant comp