AJIT KUMAR SENGUPTA, J. - (1.) THE petitioner is a partnership firm which carries on the business, inter alia, of importing various raw materials, components, consumables, stores, etc., from foreign countries and selling the same to actual users in India. One of the items which is being imported by the petitioner and sold to the actual users on high seas sale basis to M/s. Deys Medical Stores (. is tetracycline hydrochloride BP (harmless pharmaceuticals). The said material is used for manufacture of tetracycline capsules/syrup/tablets, etc., which are all life saving medicines. The import of the tetracycline hydrochloride has been made by the petitioner under REP licences issued by the Import Trade Control authorities. Such REP licences were at all material times and till now transferable under the relevant import policies. The petitioner imported the said tetracycline hydrochloride under such REP import licence which was transferred in his favour after complying with the required formalities. For some time the petitioner imported the aforesaid materials under REP licence. The said REP licence permitted import of raw materials, components, consumables, stores and packing materials in accordance with paragraph 30(1) of Part B, Section I of Volume II of the Import Policy 1977 -78.
(2.) THE said paragraph 30(1) of Part B, Section I of Volume II of Import Policy of 1977 -78 is set out hereinbelow for the sake of convenience: 30(1). - -If a manufacturer -exporter obtains the REP licence in his own name against his own exports the licence will be valid for import of any raw materials, components, consumables, stores and packing materials required for use in the licence holder's factory. The licence shall be subject to 'actual user' condition. The import shall be subject to the following restrictions: (a) Annexure I to this part contains a list of banned items. The list is in two parts, viz., Part I and Part II. Items appearing in Part I of the list can be imported for a total value not exceeding 10 per cent of the value of the licence, and, within this limit, the import of a single item should not exceed Rs. One lakh in value within the overall value of the licence. Items appearing in Part II of the list will not be allowed to be imported. (b) In respect of items permissible to actual users on a restricted basis as appearing in appendix 55 in Volume I of the Red Book, the import should not exceed 20 per cent of the value of the REP licence and, within this limit, the import of a single item should not exceed Rs. 2 lakhs in value, within the overall value of the licence. (c) Annexure II to this Part contains export -linked -import list of items. The items appearing in this list will be allowed to be imported only against exports of the products indicated against each. These items will not be allowed to be imported against export of other products. Although paragraph 30(1) of the Import Policy of 1977 -78 provides inter alia, that the goods being required for use in the licence holders' factory and the licence being subject to actual user condition from 1st April, 1978, all the REP licences are freely transferable and the same are also not subject to any actual user condition. Provisions in this regard are contained in all the import policies from the year 1978 -79. A circular dated 26th June, 1980, was issued from the office of the Joint Chief Controller of Imports and Exports clarifying, inter alia, that the REP licences issued against exports made in pursuance of the registered contracts entered into prior to 1st April, 1978, where such exports were made available on or after 1st April, 1978, would not be subject to actual user condition and would be freely transferable. Similarly, Joint Chief Controller of Imports and Exports had issued clarifications to several importers from time to time.
(3.) THE petitioner is not an actual user of the said tetracycline hydrochloride. The customs authorities all along had allowed the clearance of the said item under the REP licences for the last many years to the petitioner. Some of the bills of entry for home consumption showing the clearance of the said item by the customs authorities from time to time had been annexed to the writ application. The said clearance was allowed by the customs authorities by accepting the fact that the REP licence issued in respect of the contracts registered prior to 1st April, 1978, and in respect of the exports made after the said date, would not be subject to actual user condition and would be freely transferable as provided in the Import Policies from the year 1978 -79 and also clarified by the Chief Controller of Imports and Exports as stated hereinbefore.;