RSI INDIA PVT LTD Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) The facts of this case are not hi dispute. The facts briefly are as follows: On 14th June 1990 the petitioner applied under the Duty Exemption Scheme for an advance licence for Rs. 6,00,90,6257- for import of 16,750 M/T of Pig iron to office of the Joint Chief Controller of Imports and Exports at Calcutta (hereinafter referred to as the Licensing Authority). An undertaking was given that the petitioner would export 15,227.273 M/T of products of the value of at least the value of Rs. 8,52,72,7287-. On 9th October 1990 the petitioner received an Advance Licence No. P/W73259444/C/XX/18/C/90 dt. 9-10-1990 for Rs. 4,64,48,3% (hereinafter referred to as the said Licence) for import of 12,947.288 Metric Tonnes of pig iron (hereinafter referred to as the said goods). Subsequently on 6-12-1990 the licensing Authority enhanced both the quantity and value of the said licence to 16,750 M/T and Rs. 6,00,90,625/- respectively. In the meanwhile on 11th August 1990 the petitioner company entered into a contract with a foreign concern for importation of 12,750 Metric tonnes of pig iron. The petitioner opened letters of credit in favour of the foreign seller. The said goods were shipped. The petitioner paid Rs. 143.42 lakhs as part payment for the said goods. The petitioner has since paid the entire value of the said goods. On 8th January 1991, the Bills of Entry submitted to Customs were duly processed, scrutinised and passed, by Customs Authorities and the value and quantity of the imported pig iron has been debited by the Customs Authorities upon the said Licence and the Duty Exemption Entitlement Certificate Book. On 19th February 1991 the Customs Authorities issued an order for release of the said goods. On 22nd February 1991 the petitioner Company's office received a telex message from the Joint Chief Controller of Imports & Exports New Delhi (Office of the Chief Controller of Imports & Exports New Delhi) stating "You are not to operate Advance Licence No. P/W/3259444 dt. 9th October 1990 for Rs. 6,00,90,625/- till further advice". On 27th February 1991 the said goods arrived at the Haldia Port. The Customs Authorities refused to release the said goods. In this background this writ application was moved by the petitioners challenging the said telex and the refusal of the Customs Authorities to release the said goods. An interim order was passed by this Court inter alia, directing warehousing of the goods in the petitioner's godown under the lock and key of the Customs Authority. In view of the extreme hardship claimed by the petitioner by a reasoned order dt. 7th March 1991 this Court passed further orders allowing removal of sufficient quantity of the said goods necessary for manufacture of cast iron products in terms of the said licence conditions for 3 weeks upon notice to the Joint Chief Controller of Imports & Exports, Calcutta. This order was subsequently modified and further orders have been passed by this Court directing release of raw materials sufficient for manufacturing for further periods. The only question which is to be resolved in this matter is whether the respondents were justified in issuing the said telex restraining the petitioner company from operating the licence. It is conceded by both parties that the law applicable to this case is the Imports (Control) Order, 1955 (hereinafter referred to as the said order). The licence was issued under the Duty Exemption Scheme contained in Chapter XIX of the Import & Export Policy of April 1990 to March 1993. Under the said Scheme import of goods is allowed duty free subject to an undertaking to Export goods manufactured from such duty free import. As and when the duty free goods are imported endorsements are made on the licence and on the Duty Exemption Entitlement Certificate (DEEC). The said order is in so far as it is relevant provides as follows:

(2.) In Income Tax Officer, Cannanore v. Mohammed Kunhi reported in AIR 1969 SC 430, the Supreme Court was dealing with the question whether the appellate authority under the Income Tax Act, 1961 had the power to stay recovery proceedings pending the Appeal although there was no such power expressly granted by the statute. The Supreme Court held that there was such power. It is to be noted however that the Supreme Court was considering the exercise of power pending an appeal. The court was not called upon to consider whether the appellate authority had the ancillary powers to issue an order for stay even though there was no 'lis' pending before it.

(3.) The following sentence in the Liberty Oil Mills case has also been relied on by the respondents.