DAB EXPORTS Vs. CC AND CCE

JUDGEMENT

(1.) The issue placed before the Larger Bench for consideration is -

(2.) We hard the learned counsel of the appellant and the learned DR. The appellants brought to our notice a recent decision of the Bombay High Court in Narendra Udeshi Vs. Union of India, 2003 -TAXINDIAONLINE -68 -HC -MUM -EXIM, where the Hon'ble High Court had occasion to consider the power of DGFT in the matter of issuing of the circulars. It was held that circulars and public notice issued by DGFT prohibiting duty free import of natural rubber under advance licence would amount to amendment to the Policy, that power to amend policy being within the exclusive domain of the Central Government. The said powers cannot be usurped by the DGFT in the guise of laying down regulatory measures. In the present case the contention taken by the appellant is that in the guise of clarificatory Circular the DGFT has in effect brought an amendment to the policy by introducing a condition regarding the percentage of water content for qualifying import 'dried garlic' without license. We do not think it is necessary for us to go into the dispute regarding power of DGFT to issue the circular dated 17.9.99 as the dispute in these appeals can be resolved by taking recourse to the alternate contention raised by the appellants.

(3.) It is not disputed that before the issue of the circular dated 17.9.99 there was no condition insisted by the Customs authorities regarding the percentage of water content in respect of 'dried garlic'. If we accept the contention taken by the Revenue that the circular is clarificatory in nature and therefore, it will have retrospective effect from 1.4.97, it will hit import already made before 17.9.99 and thereby rendering such previous imports offences under the Act entailing confiscation and levy of penalties retrospectively. This Tribunal has considered very same question in East Punjab Traders and Others Vs. CC, Bombay, 2002 -TAXINDIAONLINE -104 -CESTAT -DEL -SB. In the above case the issue was whether the imported goods fall within the description of lining material or fabrics, made from man -made fabrics/yarns falling under Item 25 of the list of non -permissible items for import under Appendix 4. If the goods are lining or inter -lining materials excluding coated fabrics (25%) there is no dispute that the said material could be imported under the REP licence held by the importers. The ground on which the Collector of Customs came to the conclusion that the material was not lining material, was that in the Import and Export Policy document of april 1984 -April 1985 Entry (vi) of col. 4 of Appendix 17 was changed, in that it was mentioned lining the inter lining materials of width not exceeding 87.5 can excluding nylon taffeta coated fabrics (10%). The Collector of Customs took the view that the Export Policy April 1982 -March 1983 must also be reads as limiting the width to 87.5 cm as the amendment is clarificatory in nature and therefore has retrospective effect. This Tribunal took the view that no retrospective effect could be given to the amendment for the reason that it would render previous imports illegal entailing penal consequences on the importers. 5. The above decision of the Tribunal was approved by the Hon'ble Supreme Court in Collector of Customs Vs. East Punjab Traders 1989 (89) ELT 11. In paragraph 7 of the above judgment the Hon'ble Supreme Court after referring to the contentions raised by the Revenue that the amendment is clarificatory in nature and therefore, will have retrospective effect observed as follows :