COLLECTOR OF CUSTOMS Vs. BABA INDUSTRIES

JUDGEMENT

(1.) THESE appeals by the Revenue are from an order of Ramaprasada Rao, J. The respondent for the period April, 1966 to March, 1967 obtained three import licences under the Import and Exports Control Act and the Rules made thereunder. The first was dt. 27th December, 1967. That was for the import of German silver and nickel silver. The value of the licence was Rs. 15, 000/-. The licence had a slip attached to it, which stipulated two conditions. One of them was that the goods imported under the licence should be utilised in the licence-holder's factory for the manufacture of end product for which the licence was issued and that no portion thereof should be sold or otherwise transferred to any other party or utilised for a different end product. This condition is commonly known as the actual user's condition. The other condition in the licence was that the facility for importing permissible steel items as provided in the Ministry of Commerce Public Notice No. 41 ITC/PN/66 dt. 30th March, 1966 would also apply to import licence issued free foreign exchange under the provision of the public notice. In other words, the condition provided for liberty of conversion, that is to say, the licensee would be at liberty to import some other item for the value mentioned in the licence. The second licence was dt. 12th December, 1968, which was for the value of Rs. 33, 060. It related to import of copper. The third licence was dt. 13th December, 1968 which was for the value of Rs. 50, 000 and for the import of copper and lead. The last two licences did not contain the conditions which appeared in the original licence by a slip posted thereto. The conversion in the first licence was allowed under Public Notice No. 41/66 dt. 30th March, 1966 which was superseded by Public Notice No. 88/67 dt. 9th August, 1967. Although the first licence was issued subsequent to that date the slip containing the two clauses relating to actual user and conversion found a place in the first licence. But these conditions were not attached or appended to the two other licences. On the basis of the last two licences, the respondent on the basis of the conversion clause appended to in the first licence took advantage of it and imported cold rolled sheets of steel. The Board of Revenue by its order dt. 3rd March, 1971, allowed the respondent's appeal in respect of the first licence, the ground of the Board being that the conversion clause had been appended to the licence, though it was contrary to the policy contained in Public Notice No. 88/67. As regards the other two licences, the Revenue took a different view and the respondent had the relative orders against him quashed in two petitions which he filed under Art. 226 of the Constitution.

(2.) IN allowing the petitions, the learned Judge opined that the second and third licences were but supplemental to the principal licence and that all of them related to the same period April, 1966-March, 1967. If the first licence relating to the same period contained the conversion clause, no differential treatment would be warranted in relation to the second and third licences as supplemental ones. Also, the learned Judge kept in view in allowing the petitions the fact that to the respondent was granted a licence dt. 17th April, 1971 for a large value of Rs. 14, 98, 584 for importation of non-ferrous metals with the facility of conversion upto 50 per cent endorsed on the licence.