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High Court Of Calcutta
DIPAK KUMAR SEN, SUHAS CHANDRA SEN
UNION OF INDIA (UOI) - Appellant
Versus
JAIN EXPORTS PVT.LTD. - Respondent
Appeal In Matter 401 Of 1984
Decided On : 09/04/1984
IMPORT CONTROL - Import of palm stearine - Validity of license - Extension of license - Canalised item - Release of goods - Conditions - Customs duty - Assessment - Provisional assessment - Bank guarantee - Cash deposit - Adjudication proceedings - Initiation and completion.
Fact of the Case:
The importer obtained a license to import palm stearine under the Open General License (OGL) scheme. The license was extended for six months, taking into account the grace period. However, the consignment could not be shipped within the prescribed time due to a port strike. The importer moved a writ petition seeking a direction to the Customs authorities to release the goods. The Customs authorities contended that the goods were not covered by the license, as palm stearine had become a canalised item and could only be imported through the State Trading Corporation.
Finding of the Court:
The court held that the license was validly extended and that the importer was entitled to import palm stearine under the OGL scheme. The court also held that the Customs authorities were justified in provisionally assessing the goods and obtaining a Bank guarantee from the importer. However, the court directed the Customs authorities to initiate adjudication proceedings within three weeks and complete the same as expeditiously as possible.
Issues: 1. Whether the license was validly extended? 2. Whether the importer was entitled to import palm stearine under the OGL scheme? 3. Whether the Customs authorities were justified in provisionally assessing the goods and obtaining a Bank guarantee from the importer?
Ratio Decidendi: 1. The court held that the license was validly extended as the grace period was taken into account. 2. The court held that the importer was entitled to import palm stearine under the OGL scheme as it was a validly issued license and successive Import Policies have kept alive the right to import of OGL items under the said license. 3. The court held that the Customs authorities were justified in provisionally assessing the goods and obtaining a Bank guarantee from the importer as the goods were canalised and could only be imported through the State Trading Corporation.
Final Decision: The court disposed of the application and the appeal by directing the importer to furnish a Bank guarantee for 30% of the F. O. B. value of the goods and to deposit in cash with the Collector of Customs 10% of the F. O. B. value. The court also directed the Customs authorities to initiate adjudication proceedings within three weeks and complete the same as expeditiously as possible.
( 1 ) THE dispute before us arises out of an import of a consignment of palm stearine by 3ain Exports Private Limited, a registered Export House, under a licence issued against three registered export contracts. The said licence was acquired by the importer on the 27th July, 1982.
( 2 ) THE import which was from Malaysia was arranged for sometime in January, 1984 and the shipment was to be effected during the first half of March, 1984 subject to availability of vessel.
( 3 ) PORT workers, all over India, struck work from the 15th March, 1984 for an indefinite period. The strike however continued only till the 15th April, 1984. In view of the said strike which was announced in advance the consignment was not shipped as arranged.
( 4 ) THE importer moved a writ application on the 12th April, 1984 when a Rule nisi was issued. An interim order was passed as follows :"an interim order directing respondent No. 3 by itself, through its employees, officials, servants to clear the petitioner's goods within 3 days of their arrival which have been shipped within 4 weeks from the date of the lifting of the ports strike under contract of 4th January, 1984. ""an interim order directing respondent No. 2 from issuing any direction to respondent No. 3 not to release the goods or issuing any notice under Clause 10c of the Import (Control) Order, 1955. "liberty is given to the petitioner to have the same extended or to apply for further interim order on the same application with notice to the respondents. Liberty is also given to the respondents to apply for vacating or varying the interim order. This matter will appear as an "application" on 26. 4. 1984. In the event the petitioners clear the goods by paying full customs duty applicable before this application comes up for extension of interim order the petitioner must keep the goods in a bonded ware- house.
( 5 ) ON the 2nd May, 1984 learned Advocate appeared for the Customs and the Import Control Authorities and obtained directions for filing of affidavits. On that date, the interim order passed earlier was modified as follows :-"the interim order dated 12th April, 1984 shall continue till the disposal of the Rule subject to the modification that after clearance of the goods the petitioners shall no longer be required to keep them in Bonded Warehouse and subject further to the modification that the petitioners will be allowed the benefit of non-debit facility. "
( 6 ) THE consignment arrived at the Port of Calcutta in or about the third week of May, 1984 during the pendency of the proceeding but could not be discharged at Calcutta. The vessel left Calcutta for Kandla and the consignment was discharged at the Port of Kandla.
( 7 ) BY an order passed on the 30th May, 1984, the Collector of Customs, Kandla Part; the Assistant Collector of Customs, Kandla and the Deputy Collector of Customs, Kandla were impleaded in the writ proceedings as respondents. The interim orders passed earlier were continued.
( 8 ) IT is on record that the authorities at Kandla provisionally assessed the consignment on the 29th June, 1984. Levying Customs duty at the rate of 15% and obtained from the importer a Bank guarantee for 20% of the differential amount of duty. This appears to have been done on the basis of an earlier decision of the authorities in a similar case. The duty as assessed has been paid by the importer, which has also furnished the Bond.
( 9 ) THEREAFTER, on or about the 9th of July, 1984 an oral application was made on behalf of the Customs Authorities before the first Court for vacating the interim orders. By an order passed on the 17th 3uly, 1984 the said prayer was refused. The present appeal has been preferred from the said order.
( 10 ) THE contentions of the authorities in this appeal are, inter alia, that - (a) the goods imported were not covered by the licence; (b) Palm stearine was a canalised item which could be imported only through the State Trading Corporatio
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