1984 Supreme(Cal) 230

High Court Of Calcutta
AJIT KUMAR SENGUPTA
MANGLA BROS. - Appellant
Versus
COLLECTOR OF CUSTOMS - Respondent
C. O.  9435  Of  1984
Decided On : 07/04/1984

A licence issued during a policy period is governed by that Policy as amended up to the date of the licence and any amendment made after the date of issue cannot have any effect on the licence.

Headnote:

CUSTOMS ACT - IMPORT POLICY - LICENCE - VALIDITY - INTERPRETATION - IMPORT OF CANALISED ITEM UNDER ADDITIONAL LICENCE - PERMISSIBILITY - CUSTOMS AUTHORITIES NOT TO WITHHOLD RELEASE OF GOODS IMPORTED UNDER VALID LICENCE - IMPORT POLICY OF 1979-80 - IMPORT OF AMOXYCILLIN TRIHYDRATE - HELD, PERMISSIBLE UNDER ADDITIONAL LICENCE AS RAW MATERIAL UNDER OPEN GENERAL LICENCE - CUSTOMS AUTHORITIES DIRECTED TO RELEASE GOODS.

Fact of the Case:

Petitioner imported 1,500 kgs. of AMOXYCILLIN TRIHYDRATE (hereinafter referred to as the said goods) from Spain by air flight under Import Licence No. 2826352 dt. 14-3-80. The said import was made under Open General Licence. The Customs Authority released the said goods on 22nd February, 1983. As the consignee of the said goods found it difficult to arrange for nearly Rs. 12,00,000/- at a time, being the Customs Duty on the said goods, at the request of the petitioner the said Bill of Entry for home consumption was converted into Bill of Entry for warehousing. The petitioner was permitted to make part payment of the duty and to take part delivery of the said goods. The said goods being drugs, the customs authorities drew samples from the said goods for test. High Seas Sale Declaration showing the sale of the said goods to M/s. Flemming (India) was produced before the Customs Authorities on 5th May, 1983. Pending testing of the said goods the petitioner gave a letter of guarantee not to dispose of the said goods without the consent of the Collector of Customs. The samples drawn from the said goods were found to be of standard quality. By a letter dt. 27th November, 1983 addressed to the Assistant Collector of Customs, Air Cargo Complex (Import), the respondent No. 3, Assistant Drugs Controller (India) stated that the letter of guarantee-pertaining to the said import be cancelled and the said goods be released to the petitioner. Between 12th May, 1983 and 18th December, 1983 the petitioner took delivery of 900 kgs. of the said goods after making payment of proportionate customs duty thereon amounting to more than Rs. 7,00,000/-. ON 18th April, 1984 and 25th April, 1984 the petitioner filed two Bills of entry for Ex-Bond Clearance for home consumption with the respondent No. 3 in respect of the balance quantity (600 kgs.) of the said goods lying in the bonded warehouse. The Customs Authorities however did not return the said Bill of Entry to the petitioner. By a letter dt. 10th May, 1984 addressed to the Deputy Collector of Customs Incharge of Air Cargo Complex (Import), the respondent No. 2, the petitioner requested the said respondent for taking appropriate action at an early date inasmuch as the said goods being drugs were urgently required by the consignee who are facing acute shortage of the said goods. A reminder was sent on 16th May, 1984 intimating the respondent No. 2 that the materials in question were essential basic drugs and their expiry date were nearing. After the expiry of the said date the use of the said goods are not permissible. The respondents neither released the said goods nor intimated the reasons for withholding the said goods.

Finding of the Court:

The licence in question is an additional licence granted to the Export House. Para 174 (5) of the Import Policy of 1979-1980 provides that the additional licence will also be valid for import of raw materials, component and spares which have been placed on Open General Licence for Actual Users (Industrial ). Thus the said licence permits import of items appearing in Appendices 5 and 7 excluding items in Appendix 26. The said licence is also valid for import of items placed under the Open General Licence for Actual Users (Industrial ). Appendix 10 specifies the categories of items which can be imported under Open General Licence. Item 1 of Appendix 10 of 1979-80 policy is in the following terms: "raw Materials and Components (Non-Iron and Steel Items) other than those included in the Appendices 3, 5, 8 and 9". Drugs come under Appendix 9 and any drugs falling under Appendix 9 could only be imported by the State Chemical and Pharmaceuticals Corporation of India Limited under Open General Licence under 1979-80 Policy. In Appendix 9 an item described as Amoxycillin appears. It does not however expressly or otherwise include Amoxycillin trihydrate. This item is not mentioned in any of the Apendices 3, 5, 6, 7, 8 and 9 and can be imported under the Open General Licence being a raw materials for manufacture of specified drugs. This conclusion logically follows from the reading of para 174 (5) of 1979-80 Policy to the Appendix 10 S. L No. 1 thereof.

Issues: 1. Whether the import of AMOXYCILLIN TRIHYDRATE was permissible under the additional licence as a raw material under Open General Licence? 2. Whether the Customs Authorities were justified in withholding the release of the goods imported under a valid licence?

Ratio Decidendi: 1. Yes, the import of AMOXYCILLIN TRIHYDRATE was permissible under the additional licence as a raw material under Open General Licence. The licence in question is an additional licence granted to the Export House. Para 174 (5) of the Import Policy of 1979-1980 provides that the additional licence will also be valid for import of raw materials, component and spares which have been placed on Open General Licence for Actual Users (Industrial ). Thus the said licence permits import of items appearing in Appendices 5 and 7 excluding items in Appendix 26. The said licence is also valid for import of items placed under the Open General Licence for Actual Users (Industrial ). Appendix 10 specifies the categories of items which can be imported under Open General Licence. Item 1 of Appendix 10 of 1979-80 policy is in the following terms: "raw Materials and Components (Non-Iron and Steel Items) other than those included in the Appendices 3, 5, 8 and 9". Drugs come under Appendix 9 and any drugs falling under Appendix 9 could only be imported by the State Chemical and Pharmaceuticals Corporation of India Limited under Open General Licence under 1979-80 Policy. In Appendix 9 an item described as Amoxycillin appears. It does not however expressly or otherwise include Amoxycillin trihydrate. This item is not mentioned in any of the Apendices 3, 5, 6, 7, 8 and 9 and can be imported under the Open General Licence being a raw materials for manufacture of specified drugs. This conclusion logically follows from the reading of para 174 (5) of 1979-80 Policy to the Appendix 10 S. L No. 1 thereof. 2. No, the Customs Authorities were not justified in withholding the release of the goods imported under a valid licence. A licence issued during a policy period is governed by that Policy as amended up to the date of the licence and any amendment made after the date of issue cannot have any effect on the licence.

Final Decision: The Customs Authorities were directed to forthwith release the goods to the petitioner upon payment of the duty already assessed.