M/S Darshan
Oils Pvt. Ltd. & Anr Vs. Union of India
& Ors [1994] INSC 561 (8 November 1994)
Verma,
Jagdish Saran (J) Verma, Jagdish Saran (J) Paripoornan, K.S.(J)
CITATION:
1995 AIR 370 1995 SCC (1) 345 JT 1995 (1) 219 1994 SCALE (4)840
ACT:
HEAD NOTE:
1.
Leave granted in all the special leave petitions.
Civil
Appeal No. 7153 of 1994 (Arising out of SLP (C) No. 20837 of 1993) 221
2. The
Import and Export Policy for the period 1.4.1983 to 1.4.1994 and 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 users (industrial) subject to certain conditions which included the
following:- "22. 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." "26. Such goods arc shipped on through consignment to
Indian on or before 31st March, 1984 or, in the case of Actual Users
(Industrial) on or about 30th June 1984 against confirmed order for which
irrevocable letters of credit are opened and established on or about 29-2-1984
with no grace period whatsoever. "
3.
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 3.10.1983 opened an irrevocable letter of credit in favour
of the foreign supplier. On 11. 11. 1994, the Central Government issued a
public notice amending the said Policy for the period April to March 1994 where
by 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 :-
"3. 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 and 203 of the Import & Export Policy, 198384 or under any other
provision of the Import & 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. 1993 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 ship- ments
already effected from the 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. This being so, the shipment of fatty
acids in the present case, not being covered by the exceptions 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 amendment.
4. The
appellants filed a writ petition in the Bombay High Court challenging the
amendment made by the public notice dated 11.11. 1993. That writ petition
having been dismissed, this appeal has been filed by special leave.
5. The
challenge to the public notice 222 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 Kanishka Trading & Anr.
etc. v. Union of India & Anr. (C. A. Nos. 4 3
3 6 etc. of 1994 decided on 19.10.1994) JT 1994 (7) SC 362. Accordingly, decision
of the Delhi High Court in Kaptan's Enterprises and Another v. Union of India,
AIR 1986 Delhi 221 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.
6. The
submission of Shri Harish Salve, learned counsel for the appellants is that in
irrevocable letter of credit having been opened by the appellants it 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.
7. We
are unable to accept the submission 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 Kanishka Trading 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, 1992 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, Kanishka Trading 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.
8. In
D. Navinachandra & Co., Bombay & Anr. etc. v. Union of India &
Ors., [1987] 2 S.C.R. 989, it was clearly held that the entitlement to import
items 223 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
items being made after amendment of the Policy of the public notice dated
11.11.1983 in a manner not permitted by the amended Policy, the appellants
cannot claim to avoid the logical con- sequences 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.
9.
Reliance by Shri Harish Salve on the decision in M/s. Universal Imports Agency
and Another v. The Chief Controller of Imports and Exports and Others, [1991] 1
S.C.R. 305, 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.
10.
For the aforesaid reasons, the appeal has no merit and is dismissed with Rs.10,000/-
(Rupees ten thousand) only, as costs, 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 S.L.P.
(C) No. 20837 of 1993), these appeals are also dismissed with Rs.10,000/(Rupees
ten thousand) only as costs in each appeal.
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