SVA UDYOG VINIYOG LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE appellants imported a consignment of almonds-in shell declared as 'seeds of almonds' and claimed clearance against various REP licences for the export product covered under Appendix 17, clause G-2 (i) of Import and Export Policy April 1985-March 1988. The Customs authorities felt that the goods imported are not covered by the licences and thereupon show cause notice was served on the appellants to explain why the goods should not be confiscated under Section 111 of the Customs Act. The three reasons set out in the show cause notice were :

(2.) THE Additional Collector of Customs, Bombay by order dated July 26, 1988 held that the import was not under cover of valid licence and, therefore, the goods are liable to confiscation under Section 111 (d) of the Customs Act. The Additional Collector granted an option to the appellants to clear the goods on payment of redemption find of Rs. 6,00,000/ -. The Additional collector also imposed a penalty of Rs. 50,000/- on the appellants. The Additional Collector held that the goods imported are dry fruits and are not seeds as claimed by the appellants. The additional Collector also held that the goods permitted to be imported under REP licences must have nexus to the goods exported. The decision of the Additional Collector was challenged by the appellants by filing Writ Petition under Article 226 of the Constitution before a Single Judge. The petition was dismissed by impugned judgment dated March 8, 1990. The learned Judge concurred with the findings recorded by the Additional Collector and in addition, referred to the provisions of Chapter 8 and Chapter 12 of the first Schedule to the Customs Tariff Act, 1975. The decision of the learned single Judge is under challenge.

(3.) MR. Vahanvati, learned Counsel appearing on behalf of the appellants submitted that both the additional Collector and the learned Single Judge were in error in holding that the goods imported do not fall within the expression "seeds". The learned Counsel urged that the learned single Judge was in error in referring to the provisions of the Customs Tariff Act to determine whether the goods imported are covered by REP licences. There is considerable merit in the submission of learned Counsel that to determine as to whether the goods imported are covered by REP licences, it is not permissible to refer to the provisions of the Customs Tariff Act. The contention of the appellants that the goods imported are covered by REP licences, however, cannot be accepted. Appendix 17 of the Import and Export Policy deals with the subject of import policy for registered exporters. The appendix contains the description of export products covered by the import policy for registered exporters, the percentage of import replenishment and materials allowed for import against each product as well as other conditions relating thereto. The perusal of the conditions indicate that the object of the policy or what was intended was that only those items will be permitted to be imported which are used for the relevant export product. Condition No. 7 prescribes that where packing materials is allowed for import, the REP licence will be valid for import of only such packing materials or raw materials required for the manufacture of only such packing materials as are normally used for packing the relevant export product. Condition No. 8, inter alia, provides that while applying for REP licence, the export house must submit with the import application the list of items as are actually used as raw materials/components in the manufacture of the products exported. It further provides that a licensing authority may, after due scrutiny of the list, exclude therefrom any item which is not actually used as a raw material/component in the manufacture of products exported. The perusal of these conditions leave no manner of doubt that the object or the intention of the policy makers was to permit import of such articles which had nexus with the articles which were exported by the licence holder. The statement of import replenishment under relevant entry is required to be set out :------------------------------------------------------------------------Sr. Export Import Materials Remarks no. Product replenishment permitted percentage for import------------------------------------------------------------------------1 2 3 4 5------------------------------------------------------------------------G-2 (i) (a) Fresh 10% (a) Packing (1) in case of fruits, material namely item (c)in vegetables EDPE, HDPE, column 4 please and flowers Polypropylene, see para 8 plastic pots, of 'general grp roof lite conditions' in sheets, kraft this appendix. liner and flutting media, grape guard paper, kraft paper, tissue paper for wrapping, peat moss. (b) Sodium metabisulphate (10%) (c) Chemicals appearing in appendix 3 and used in cultivation/growth of fruits, vegetables and flowers, and freshening chemicals for fruits, vegetables and flowers. (d) Seeds/bulbs/mother plant germ plasm. (e) Pearlite horticulture grade and vermiculate. (b) Individually 10% (a) Same as items Same as remark quick frozen (a) to (e) against (1) in column 5 vegetables. Sl. No. G-2 (i) (a) against above. Sl. No. 2 (i) (a)above.------------------------------------------------------------------------