JUDGMENT

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 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 terms (1986 Supp SCC 692) :

"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 grant of Export House Certificates in the Import Policy for the year 1978-79. While confirming the High Courts 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 and except items which are specifically banned under the prevalent 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."

2. 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 1, 1986 and the respondent filed the Bill of Entry on September 11, 1986.

3. 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/ - in lieu of confiscation.

4. 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.

5. 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. M/s. Godrej Soaps Ltd., (1986) 3 SCR 771, the Customs authorities were interpreting the order of this Court dated April 18, 1985 (Rajnikant case) (1986 Supp SCC 692) to mean that the additional licence holders were permitted to import 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, 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.

(b) The Government of India in its letter dated April 23, 1986 stated that the Chief Controller, Imports/Exports, in consultation with the 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 obse