KAJARIA EXPORTS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The appellants imported 5000 metric tonnes of white cement which arrived at the Port of Bombay on or about 17-11-1984. The appellants filed bills of entry for home consumption in respect of the goods so imported and sought clearance of the said goods as an Open General Licence Item under Appendix 6 List 8 Part III Item 33 of the Import and Export Policy for April 1984-March 1985. Clearance, however, was not permitted. The respondents issued a show-cause notice claiming that white cement was not importable under Open General Licence since it was a canalised item under Appendix 5 Part B Serial No. 8 of the Import and Export Policy for April 1984-March 1985. The show-cause notice was challenged by the appellants by filing writ petitions in the High Court.

(2.) Pursuant to an interim order passed in the writ petitions, the appellants were allowed to clear the goods on furnishing a bank guarantee of a nationalised bank for 35% of the C.I.F. value of the goods imported as also an I.T.C. bond for the full C.I.F. value. The appellants also gave an undertaking that in the event of failing in the petition, they will pay interest on the amount covered by the I.T.C. bond at 15%. They also gave certain other undertakings as recorded in the interim order. Under the interim order, the respondents were allowed to proceed with adjudication under the impugned show-cause notice. Accordingly the 5th respondent adjudicated the matter and passed an order dated 13th January, 1986 holding that white cement was covered at Serial No. 8 of Appendix 5 Part B of the Import and Export Policy 1984-85. Hence it could not be imported under Open General Licence. The import of white cement without an import licence, therefore, was not permissible and the goods imported were liable for confiscation under Section 111(d) of the Customs Act, 1962 read with Section 3 of the Import (Control) Order, 1955. Respondent No. 5 passed an order imposing penalty of Rs. 29,57,000/- and directed that the bond/bank guarantee executed by the appellants shall be enforced forthwith as the goods were already cleared and were not available for confiscation.

(3.) The writ petitions challenging the show-cause notice were dismissed by the High Court by its judgment and order dated 23rd of March, 1994. The High Court held that white cement did not fall under Appendix 6 List 8 Part III Item 33 and could not be imported as an Open General Licence Item. The High Court held that white cement was covered by Appendix 5 Part B Serial No. 8 and was a challenged item. The present appeals are from the above judgment and order of the High Court.