D E I LTD Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) The issue to be considered is as to whether the firm contract was required to be backed by irrevocable letter of credit in order to entitle the appellant to have the benefit of the import licences dated 21.1.1988 and 27.7.1987 of which, the appellant had taken an assignment on 3.9.1989. Prior to the said assignment, orders were placed by the original licensees on 4.1.1988 and 6.6.1988 and those orders had been accepted by the suppliers in Singapore on 11.1.1988 and 21.6.1988. The goods to be imported were Faximilo Transmission Equipment, 39 numbers, valued at Rs. 7,20,379. The import was actually effected on 16.8.1989 and 31.12.1989.

(2.) The import trade control policy for the period April-March, 1988-91 only required that the licensee should place a firm order on the foreign supplier within six months from the date of issue of licence. The licence also contains only that stipulation. It is not a requirement either in the licence or in policy, that in addition to the firm order, an irrevocable letter of credit also should have been opened in favour of the foreign supplier. Such a requirement is provided for in the case of goods which are shifted from the open general licence under a public notice. Admittedly, the goods imported by the appellant remained in open general licence (O.G.L.) list and had not been shifted.

(3.) The assessee had produced before the authorities the order that the original licensee-Champdany Industries Limited, Calcutta, had placed on the foreign supplier in Singapore on 6.6.1988, as also the letter of the foreign supplier accepting the order and agreeing to keep the price firm for the period stipulated in the order and undertaking to deliver the goods on receipt of, and in accordance with the delivery instructions. Admittedly, pursuant to that order, the delivery instructions were given and the goods were despatched to India and resulted in the importation by the appellant. The order which had been placed with the foreign supplier and the acceptance thereof by the foreign supplier, had resulted in a contract, under which, the Indian licence-holder was required to purchase and the foreign supplier required to sell the goods at the prices stipulated therein. What was left undetermined at the time of the exchange of correspondence, was only the date of despatch and the number of items to be despatched. The supplier was bound to maintain the price for the agreed period. The contracts thus concluded between the parties did not require the opening of irrevocable letter of credit by the importer.