SUWIDHI ENTERPRISES Vs. UNION OF INDIA

JUDGEMENT

(1.) The short question that falls for consideration in the present petition depends upon the interpretation of General Note (3) of "O. Readymade Garments, Hosiery and Knitwear Products" of Appendix 17 of the Import and Export Policy for April 1983 to March 1984 (hereinafter referred to as the said Note).

(2.) The undisputed facts are that the Petitioners had placed on their foreign suppliers Messrs Sugano Brothers and order for Snap Fasteners of the value of 5 per cent of the face value their import licence under the Registered Exporters Policy Scheme (REP). Before that the Petitioners had already imported Zip Fasteners on the very same licence to the extent of 5 per cent of the value of the said licence. The respondent - Customs authorities disputed the right of the Petitioners to import the fresh consignment of Snap Fasteners on the ground that under the said note (3), the Snap and Zip Fasteners taken together which could be imported here no more than 5 per cent of the face value of the licence and therefore the present import of the Snap Fasteners which amounted to an additional 5 per cent of the value of the said licence was impermissible. The Petitioners have therefore filed the present petition challenging the interpretation placed by the Customs authorities on the said Note and contending that the Note permits import of each of the item of the Snap Fasteners and the Zip Fasteners to the extent of 5% of the value of the licence and not of both taken together. Hence the only question involved in the Petition is of the correct interpretation to be placed on the said Note.

(3.) In order the appreciate the controversy it is necessary to allude to the following preliminary facts :Appendix 17 in which the said Note appears contains the description of Export Products covered by the Import Policy for Registered Exporters, the percentage of import replenishment, and the materials allowed for import against each product as well as other conditions relating thereto. The Statement of import replenishment is given in the form of a table in the Appendix. The table has five columns. Column No. 1 gives the classification of the export products in various groups. Some of the products have been sub-divided into broad categories and in products in various groups. Some of the products have been sub- divided into broad categories, and in product groups/categories the product have been mentioned with their serial numbers or sub-serial numbers. Column No. 2 gives the description of the specific export product. Column No. 3 gives the import replenishment percentage. Column No. 4 not only mentions the materials of import but also in certain cases gives the percentage of the licence value (i.e. REP entitlement) upon which import of the concerned materials is allowed. The export products have been given alphabetical numbering e.g. 'A' for Engineering Goods, etc. I am concerned in the present case with "O Products" viz. Readymade Garments, Hosiery and Knitwear. Some of these material have General Notes in Column No. 5 which is meant for remarks. In some cases the General Notes also mention the figure of percentage of the licensed value upto which import of the material concerned is allowed. In the case with which I am concerned viz. that of Snap Fasteners and Zip Fasteners, there are General Notes at the beginning of "O Products" governing the percentage of Import entitlement. Hence there is no percentage of import entitlement mentioned in Column No. 4 where Snap and Zip Fasteners are at Item (xii) and (xiv) respectively. That is why the importance of the General Note (3) in the present case.