- (1.) Two separate consignments of Refined Industrial Coconut Oil were imported by the appellants/ petitioners M/s. Jain Exports Private Ltd., hereinafter called 'the importers', on the 10th and 22nd of September 1982 at Kandla Port from Colombo weighing about 3002.552 M. Tons and 5342.369 M. Tons of the CIF value of Rs. 1,63,67.050 and Rs. 2,91,21,450, respectively. Different Bills of Entry for clearance of the said . The importers claimed the benefit of preferential rate of duty in terms of Customs Notification No. 431 dated 1st November, 1976 as amended from time to time. Permission to discharge the cargo from the vessels to the shore tanks was allowed in terms of S. 49 of the Customs Act, 1962 after obtaining representative samples. After the cargo was thus discharged the shore tanks were sealed. Now under the import policy of 1980-81 whereunder the two consignments were imported, 'coconut oil' was mentioned under Entry 5 of Appendix 9 thereof as a canalised item which could be imported through the State Trading Corporation (STC) only. Admittedly, these imports were not made through STC. Even though the imports are stated to have been made under the import policy of 1980-81, the Letter of Credit was opened on 31st July, 1982. The importers being merely holders of Letters of Authority were expected to import the goods and deliver them to the licenc holders who in turn would dispose of the goods to actual users. Indisputably the goods were sold on high-seas basis. The importers contended that only the edible variety of coconut oil was a canalised item, a contention which was disputed by the department. Giving detailed reasons the Customs Collectorate, Ahmedabad, issued notices dated 24th and 26th November, 1982 requiring the importers to show cause why the said two consignments should not be confiscated under S. 111(d) of the Customs Act since the import was illegal, in that, it was in contravention of S. 3(1) of the Imports and Exports (Control) Act, 1947 read with S. 11 of the Customs Act. The notices also threatened imposition of penalty under S. 112 of the said Act besides recovery of leviable duty. The importers were given 15 days to show cause, supported by documentary evidence on which reliance may be placed, and to indicate if a personal hearing was desired. The importers sent detailed replies dated 30th November, 1982 and 2nd December, 1982 to the said show cause notices wherein it was averred that the import was legal and valid and in any case bona fide and the various grounds on which the show cause notices were based were totally misconceived and ill-founded. The importers, therefore, prayed that the threatened action may be dropped. Two separate adjudication orders, bearing Nos. 6 and 7 of 1982, were made by the Collector of Customs and Central Excise, Ahmedabad, whereby he ordered confiscation of both the consignments under S. 111 (d) of the Customs Act with an option to redeem the goods on payment of a fine of Rs. 2,00,00,000 (Rupees two crores only) and Rs. 3,00,00,000 (Rupees three crores only), respectively. No penalty was levied under S. 112 of the said Act even though the Collector found that the 'import policy and its provisions were deliberately flouted' as in his view the redemption of fine imposed in lieu of confiscation of the impugned goods was sufficient to meet the ends of justice. Lastly, it was said that if the importers exercise their option to redeem the goods they may clear the goods on payment of duty at preferential rates applicable to goods of Sri Lanka origin. Both these orders passed on 17th and 18th December, 1982, respectively, were issued on 20th December, 1982. Both these orders were challenged by way of Writ Petitions Nos. 4037 and 4038 of 1982 under Arts. 226/227 of the Constitution of India in the High Court of Delhi which petitions were referred to the Full Bench of the High Court and were disposed of by a common judgment dated 20th December, 1984. The High Court by majority dismissed the writ petitions but permitted the importers to approach the Central Excise and Gold Control Tribunal, hereinafter called 'the Tribunal', by way of appeals insofar as the order in regard to the redemption of fine was concerned. The judgment of the High Court is reported in (1987) 29 ELT 753.
(2.) Against the judgment of the High Court insofar as it related to the validity of the import, the importers approached this Court by way of Special Leave. The two appeals being Civil Appeals Nos. 2705 and 5383 of 1985 were disposed of by a common judgment on 5th May, 1988, vide Jain Exports (P) Ltd. v. Union of India, (1988) 3 SCR 952. Before this Court the following four points were raised : "(1) The import policy of which year would be applicable to the facts of the present case - the period during which the licence were issued or the time when import actually took place. (2) Whether "coconut oil" appearing in para 5 of Appendix 9 of the Import Policy of 1980-81 was confined to the edible variety or covered the individual variety. (3) Whether in the face of the decision of the Board and Central Government as the statutory appellate and revisional authorities, it was open to the Collector functioning in lower ties to take a contrary view of the matter in exercise of quasi judicial jurisdiction; and (4) Whether the order of the Collector was vitiated for breach of rules of natural justice, and collateral considerations in the making of the orders." It may be noticed that the importers did not challenge that part of the High Court order whereby the importers were permitted to approach the Tribunal in regard to the redemption fine. This Court noted that that part of the High Court's order had become final. In fact in response to that order the importers had preferred two appeals to the Tribunal, being appeals Nos. 863 and 864 of 1985. On the four questions raised before this Court, this Court held (i) the terms of the import policy of 1980-81 applied to the facts of the case; (ii) under the said import policy of 1980-81, all varities of coconut oil, edible as well as non-edible, were included in Paragraph 5 of Appendix 9 and hence there was no warrant for the assumption that it covered the edible variety only; (iii) on a true interpretation of Entry 5 of Appendix 9 of the import policy in question, if it is found that the entry 'Coconut Oil' covered both the edible and non-edible variety, the letter of the State Trading Corporation was of no avail and the fact that the Collector of Customs was bound by the decision of the Board and Central Government could not alter the situation since the matter had crossed that stage and this Court was free to place its own interpretation on the concerned entry; and (iv) the Collector's order does not suffer from vice of breach of principles of natural justice. In this view of the matter the appeals were dismissed.
(3.) The two appeals arising in consequence of the majority judgment of the Delhi High Court on the question of the quantum of the redemption fine came up for hearing before a two member bench of the Tribunal at Bombay. The Technical Member by his judgment and order dated 4th April, 1986 took the view that the appeals deserved to be dismissed both on merits and as barred by limitation. The Judicial Member by his judgment and order dated 4th June, 1986 took the view that the appeal should be partly allowed by reducing the redemption fine to 35% of the landing cost of the two consignments. In view of this difference of opinion between the two members, the matter was placed before the President of the Tribunal in terms of S. 129C(5) of the Customs Act. Thereupon, on the directions of the President, the appeals were placed for disposal before a three-member Bench at New Delhi. The Bench by its order dated 5th December, 1986 took the view that since the Delhi High Court had remitted the matters to the Tribunal for consideration of the question of quantum of redemption fines levied by the Collector of Customs, it was not open to the Tribunal to dismiss the appeals as barred by limitation. However, on the merits of the matters the Tribunal concurred with the view of the Member (Technical) that both the appeals should be dismissed. In other words the three-member Bench of the Tribunal did not, in the facts and circumstances of the cases, favour any reduction in the redemption fine in either case. In view of the opinion so expressed by the larger Bench, the appeals were ultimately dismissed by the Tribunal.;