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1989 Supreme(Cal) 201
High Court Of Calcutta
Sachi Kanta Hazari
JAIN SHUDH VANASPATI LTD. - Appellant
Versus
COLLECTOR OF CUSTOMS - Respondent
Writ 1838 Of 1983
Decided On : 04/19/1989
The court emphasized the validity of the import license, the legality of the contract, and the violation of Article 14 of the Constitution of India in quashing the order of confiscation and the imposition of the personal penalty.
Headnote:
Customs Act - Jurisdiction - Import Policy - O. G. L. Order - Validity of Import License - Confiscation of Goods - Personal Penalty - Article 14 Violation
Fact of the Case:
The petitioner entered into a contract on 2nd June, 1981 to import inedible beef tallow. The import was governed by open general licence (O. G. L.) Order No. 1/81 dated 3rd April, 1981. The petitioner requested a Letter of Credit for the import, but faced delays and restrictions. The goods arrived in India, but the Customs did not permit clearance. Show-cause notices were issued, and the goods were confiscated under the Customs Act. The petitioner challenged the legality of the order and the imposition of a personal penalty of Rs. 5 crores under Section 112 of the Customs Act.
Finding of the Court:
The court held that the import was valid and lawful, and the contract was legally entered into. The import license was also valid. The court quashed the order of confiscation and the imposition of the personal penalty, citing the violation of Article 14 of the Constitution of India. The court also issued a writ of mandamus commanding the respondent not to act upon the order.
Issues: Validity of import license, Confiscation of goods, Imposition of personal penalty, Jurisdiction of the court
Ratio Decidendi: The court held that the import was valid and lawful, and the contract was legally entered into. The import license was also valid. The court quashed the order of confiscation and the imposition of the personal penalty, citing the violation of Article 14 of the Constitution of India. The court also issued a writ of mandamus commanding the respondent not to act upon the order.
Final Decision: The court quashed the order of confiscation and the imposition of the personal penalty, citing the violation of Article 14 of the Constitution of India. The court also issued a writ of mandamus commanding the respondent not to act upon the order.
( 1 ) THIS is an application under Article 226 of the Constitution of India filed by M/s. Jain Shudh Vanaspati Ltd. and Sri Niranjan Lal Jain against the Collector of Customs and the Union of India, inter alia, praying for an order for the following : (a) a writ and/or order and/or direction in the nature of Certiorari commanding the respondents to transmit the records relating to the said order dated December 20, 1983 in so far as it imposes the penalty and/or puts conditions on the re-export of the consignment of 10495. 408 metric tonnes of beef tallow belonging to the petitioner company and all proceedings relating thereto so that the same may be set aside and/or quashed and conscionable justice might be rendered; (b) a writ and/or order and/or direction in the nature of Mandamus commanding the respondents to allow the petitioner company: (i) to re-export 3,000 metric tonnes 1-5% beef tallow per vessel M. T. JULIND in terms of Public Notice dated September 1, 1983 at a price of US $ 410 F. O. B. Bombay port against Letters of Credit dated 18th November, 1983 and 9th December, 1983 of Belgolaise Brussel to Bank of Baroda for amounts of US $ 820,000 and US $ 410,000 respectively and consequently immediately release revenue deposit in respect thereof. (ii) to re-export the balance quantity against confirmed Letter of Credit issued in favour of the petitioner company at a price of US $ 410 F. O. B. Bombay Port and consequently release revenue deposit in respect thereof immediately. (c) Rule Nisi in terms of prayers (a) and (b) above; (d) Stay of the operation of the said order dated December 20, 1983 in so far as it imposes penalty and/or puts conditions on the re-export of the consignment of 10945. 408 metric tonnes of beef tallow belonging to the petitioner company. (e) An order be issued and/or direction be made commanding the respondents to forthwith permit the petitioner company; (i) to re-export 3,000 metric tonnes 1-5% beef tallow per vessel M. T. JULIND or any other vessel in terms of Public Notice dated September 1983 at a price of US $ 410 F. O. B. Bombay Port against the Letters of Credit dated 18th November 1983 and 9th December 1983 of Belgolaise Brussels to Bank of Baroda for amounts of US $ 820,000 and US $ 410,000 respectively and consequently release within 24 hours the revenue deposit in respect thereof; (ii) to re-export the balance quantity against confirmed Letter of Credit in favour of the petitioner company at the US $ 410 F. O. B. Bombay Port and consequently release the revenue deposit in respect thereof immediately.
( 2 ) THE case of the petitioner is that the petitioner entered into a contract on 2nd June, 1981 to import 25 thousand metric tonnes of inedible beef tallow from a Singapore Party. The import of the said inedible beef tallow was governed by open general licence. Inedible beef tallow is a raw material which is used in the manufacture of soap and import of the said inedible beef tallow was governed by the O. G. L. Order by Order No. 1/81 dated 3rd April, 1981. From and after 5th June, 1981 under the import policy for the year 1980-81 inedible beef tallow of animal origin, was covered by appended Item No. 44 Appendix-10 of Import Policy for the year 1980-81 enumerated a list of items the import of which was governed by O. G. L.
( 3 ) AS per contract dated 2nd June, 1981 the petitioners were required to pay to the foreign supplier for supply of inedible beef tallow @ US $ 485/- per metric tonne (C. I. F. ). Pursuant to the said contract, the petitioner company requested New Bank of India to open a Letter of Credit for US $ 122,46,250/- for import of 25 thousand metric tonnes inedible beef tallow by letter dated 3rd June, 1981. New Bank of India on the said date, i. e. , 3rd June, 1981 wrote back to the petitioner company that the Letter of Credit cannot be opened until a copy of the contract is submitted to them. On 6th June, 1983 the petitioner company received the c
