JAIN SHUDH VANASPATI LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner company imported 13.500 M.T. of RBD Palm Oil from foreign suppliers. The import of RBD Palm Oil was allowed under open general licence by Import Trade Control Public Notice No. 64 ITC (P&B)/78 issued by Ministry of Commerce, Civil Supplies E and Cooperation, Govt. of India on September 2, 1978. Bills of entry for the total quantity of Palm Oil were duly presented to the authorities after the ship entered Bombay Port. The oil in question was contained in stainless steel drums. The proper officer cleared the goods after physical checking and satisfying himself that the import of goods was not prohibited under section 47 of the Customs Act. There was no restriction, at the time of the import, that Edible Oil should be imported only in a particular type of drum or container. The drum or container could be of steel or iron as referred to inserial No. 73-23 of the First Schedule to the Import Control Order. "Stainless Steel" is included in the expression "Steel", in the said entry. The drums were brought at the Ghaziabad factory of the company and after unpacking the ,oil they were disposed of by the petitioner. company in the normal course of business. Acting on the belief that under Appendix 3 of the Import Policy A. M. 79, importation of stainless steel drums was- banned, the customs authorities effected searches and seized the drums (under Section 110 of the Customs Act) from various places. Respondent No. 2, thereafter, through the Asst. Collector of Revenue and Intelligence, New Delhi, issued summons to the petitioner No. 2 and to the General Manager of petitioner No. I, under Section 108 of the B Customs Act. The statements of petitioner No. 2 and the General Manager were recorded on September 1, 1979. A public notice was issued by the Custom Authorities on September 6, 1979 regarding, the declarations to be made inrespect of packages or containers. The said notification reads as follows : <FRM>JUDGEMENT_222_ILR(DEL)1_1981Html1.htm</FRM>

(2.) In the months of October and November, 1979 the Assistant Collector, Bombay issued short levy notices under section 28 of the Customs Act to the petitioners. The notices stated that the fact that the drums were of stainless steel was suppressed by the petitioners. It was then stated :

(3.) There is no dispute that the importation of stainless steel as such, as a consumer item is banned and prohibited. It is also an admitted fact, that under the relevant rules and instructions, the goods which are permitted to be imported under Open General Licence are also permitted to be imported in containers. The question for determination is, whether the stainless; steel drums which were used- for importing the Palm Oil in this case, were imported as a separate item of stainless steel or were imported as mere containers for the Palm Oil. Palm Oil, according to the respondents is usually imported in India in mild steel containers. The respondents, therefore, suspected that the petitioners had used the containers of stainless steel, as an indirect rule to import stainless steel which is a banned item. This they found on inquiry from all traders importing in Palm Oil. According to the respondents this is the normal trade practice. The petitioners, on the other hand, contend that the present international trade practice is to import edible oil in stainless steel containers as stainless steel prevents deterioration and contamination. The petitioners have produced two letters (Annexure H) in support of this claim. The first letter is by the State Trading Corporation. In its letter S.T.C. has said :