Oils Pvt. Ltd. Vs. Union of India  INSC 563 (8 November 1994)
Jagdish Saran (J) Verma, Jagdish Saran (J) Paripoornan, K.S.(J)
1995 AIR 370 1995 SCC (1) 345 JT 1995 (1) 219 1994 SCALE (4)840
Judgment of the Court was delivered by J.S. VERMA, J.- Leave granted in all the
special leave petitions.
Appeal No. 7153 of 1994 [arising out of SLP(C) No. 20837 of 1993]
Import and Export Policy for the period 1-4-1983 to 31-3-1984 was declared by
the Central Government by issue of an order in exercise of the powers conferred
by Section 3 of the Import and Export (Control) Act, 1947 giving general
permission for import into India of raw materials, components and consumables
by actual users (industrial) subject to certain conditions which included the
Items covered under Part-III of the Schedule to this licence can be imported
under OGL by Actual Users (Industrial) and others, for stock and sale;
Such goods are shipped on through consignment to India on or before 31-3-1984
or, in the case of Actual Users (Industrial) on or about 30-6-1984 against
confirmed orders for which irrevocable letters of credit are opened and
established on or about 29-2-1984 with no grace period whatsoever."
Split stearin fatty acids were not a canalised item under that Policy. The
appellants entered into a contract with a foreign supplier for import of fatty
acids on 1-8- 1983 and on 3-10-1983
opened an irrevocable letter of credit in favour of the foreign supplier. On 11-11-1983, the Central Government issued a public notice
amending the said Policy for the period April 1983 to March 1984 whereby the
import of fatty acids became a canalised item. The amendment clearly provided
that import of fatty acids could be made only by the State Trading Corporation
under Open General Licence and therein it was stated as under:
Import of items referred to in para 2 of this public notice shall not be
allowed under any import licence already issued or under paras 31, 34, 37, 38,
138, 148 and 203 of the Import and Export Policy, 1983-84 or under any other
provision of the Import and Export Policy 1983-84, except against shipments
from the country of origin already effected before the date of this public
notice. This restriction will not, however, apply to the imports by STC of
India Ltd." (emphasis supplied) Thus, the amended Policy effective from
11-11-1983 made it clear that import of fatty acids was not allowed thereafter
even under any import licence already issued "except against shipments
from the country of origin already effected before the date of this public
notice". In other words, the only exception made for import of the canalised
items under import licences already issued was in respect of the shipments
already effected from the 347 country of origin before the date of said
amendment, that is, of shipments of which transit had already commenced from
the country of origin. The shipment in question arrived at Bombay on 9-2-1984 and it is not the appellants' case that this shipment falls
within the exception indicated above.
being so, the shipment of fatty acids in the present case, not being covered by
the exception made in the amendment to the Policy effective from 11-11-1983 and
the import being not through the State Trading Corporation, the appellant has
been denied the benefit of its import being covered by the Policy prior to its
appellants filed a writ petition in the Bombay High Court challenging the
amendment made by the public notice dated 11-11-1983. That writ petition having
been dismissed, this appeal has been filed by special leave.
challenge to the public notice dated 11 -11- 1983 by the appellants in the High
Court was based mainly on the doctrine of promissory estoppel which has been
rejected by the High Court. A similar challenge on the ground of promissory estoppel
has been rejected by this Court in Kasinka Trading v. Union of India1.
Accordingly, decision of the Delhi High Court in Kaptan's Enterprises v. Union
of India2 cannot furnish any support to the appellants in the present case. Shri
Harish Salve, learned counsel for the appellants made no attempt to support the
appellants' case on the doctrine of promissory estoppel. This point does not,
therefore, require any further consideration.
submission of Shri Harish Salve, learned counsel for the appellants is that an
irrevocable letter of credit having been opened by the appellants in favour of
the foreign supplier on 3-10-1983 prior to amendment of the Policy by the
public notice dated 11 - 11- 1983, it was not feasible for the appellants to
prevent the shipment of the goods thereafter, and, therefore, not extending the
benefit of exception to such cases also, confining the exception only to actual
shipments made prior to issue of public notice dated 11-11-1983, is
unreasonable and violative of Article 14. Learned counsel submits that opening
of an irrevocable letter of credit prior to issue of the public notice being
lawful, its consequence could not be made unlawful by a subsequent amendment of
the Policy. Learned counsel also submitted that amendment of the Import Policy
by issue of a public notice can be only prospective, but in this manner it has
been made retrospective. Shri Subba Rao, learned counsel for the Central
Government submitted that the exception is applicable only to such goods which
were already in transit on account of the shipments having been made; and the
only consequence of the amendment is an increase in the tax which is not violative
of Articles 14 and 19 of the Constitution.
are unable to accept the submissions of the learned counsel for the appellants.
These submissions are merely a different facet of the doctrine of promissory estoppel
which has been held inapplicable in such a situation. In 1 (1995) 1 SCC 274 2
AIR 1986 Del 221 348 Kasinka Trading1 which related to withdrawal of exemption
from payment of duty etc. in exercise of the statutory powers, it was
reiterated that the power to exempt includes the power to modify or withdraw
that benefit; and the liability to pay duty under the Customs Act, 1962 arises
when the taxable event occurs being subject to payment of duty as prevalent on
the date of the entry of the goods. It was held that the doctrine of promissory
estoppel could not be invoked to question the withdrawal of notification issued
under Section 25 of the Customs Act, 1962 when it was done in public interest.
Equities have to be balanced and public interest must outweigh individual
interest. Kasinka Trading1 clearly holds that withdrawal of such a benefit can
be made in public interest during the period for which the benefit had earlier
been intended. In our opinion, this is sufficient to indicate the fallacy
inherent in the submissions made on behalf of the appellant.
D. Navinachandra & Co. v. Union of India3 it was clearly held that the
entitlement to import items which were canalised or not, is governed by the
Import Policy prevalent at the time of import. In the present case, the import
of a canalised item being made after amendment of the Policy by the public
notice dated 11-11-1983 in a manner not permitted by the
amended Policy, the appellants cannot claim to avoid the logical consequences
of the import being made contrary to the Import Policy prevailing at the time
of import of the goods. Exemption under the amended Policy being limited to
shipments already made cannot be termed unreasonable or unduly restrictive.
Obviously, the exception was made to cover only those goods of which the
shipment had been made and were in transit, excluding all such goods of which
no shipment had been made. The classification between goods in transit and those
of which the transit had not begun, cannot be called irrational or unreasonable
in the context.
Reliance by Shri Harish Salve on the decision in M/s Universal Imports Agency
v. Chief Controller of Imports and Exports4 which deals with the meaning of the
expression "things done" in a general sense is misplaced. In the
present case the language of the exception made in the amended Import Policy is
clear and unequivocal excluding from its ambit all such goods, except those in
transit because of the shipment having already been made. That decision does
not, therefore, require any further consideration.
For the aforesaid reasons, the appeal has no merit and is dismissed with Rs
10,000 (Rupees ten thousand) only, as costs.
(1987) 3 SCC 66 :(1987) 2 SCR 989 4 (1961) 1 SCR 305: AIR 1961 SC 41 349 Civil
Appeal Nos. 7154 & 7155 of 1994 [arising out of SLP (C) Nos. 13040 and
14337 of 1994] 11.In view of the decision in Civil Appeal No. 7153 of 1994
(arising out of SLP (C) No. 20837 of 1993), these appeals are also dismissed
with Rs 10,000 (Rupees ten thousand) only as costs in each appeal.