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Judgment
M.L. Pendse, J.—By this petition filed under Article 226 of the Constitution, the petitioners are challenging legality of order dated August 28, 1984 passed by Additional Collector of Customs confiscating the goods imported by the petitioners in exercise of powers conferred u/s 111(d) of Customs Act, 1962 read with Section 3(2) of Imports and Exports (Control) Act, 1947. The Additional Collector permitted the petitioners to redeem the goods on payment of fine, which is about Rs. Ten lacs. The facts, which gave rise to passing of the order, are as follows:
The petitioners imported copper wire rods from Zambia and France valued at Rs. 53,90,821/-. The petitioners filed nine Bills of Entry against licence dated May 11, 1981 for clearance for home consumption. The licence was valid till May 31, 1982, but was revalidated for further duration of six months i.e. till November 29, 1983 including grace period. At the time of renewal of licence, an OGL slip was attached stating that licence in question was valid for OGL items only under para 185 of Import Policy 1982-83. Paragraph 185 of Import Policy, inter alia, prescribes that Export Houses will be allowed to import OGL items against REP licences issued in their own name or transferred to them by others. This facility is available for the import of raw materials, components, consumables and spares (excluding items covered by Appendix 5) which have been placed on Open General Licence for Actual Users Industrial, as per conditions laid down.
The Collector of Customs declined to grant clearance of imported consignment and served show cause notice dated March 2, 1984 as to why the imported goods should not be confiscated. The show cause notice, inter alia, claims that the consignment was covered by Serial No. 15 of Appendix 8 of Import and Export Policy and hence not permissible under Open General Licence. The petitioners filed objection and claimed that the Policy applicable is of year 1982-83 and not of year 1983-84, as claimed by the Department. After considering the claim of the petitioners, especially footnote No. (2) to Appendix 8 of Policy for year 1982-83, the Collector held that the said footnote has no application and the import by the petitioners as an OGL item was not permissible. The Collector thereupon passed impugned order of confiscation of imported consignment and the said order is under challenge.
Shri Parsurampuria, learned Counsel appearing on behalf of the petitioners, submitted that the finding of the Collector that the consignment was not permissible under OGL, as the goods were covered by Item No. 15 of Appendix 8 of the relevant policy, is entirely incorrect. We find considerable merit in the submission of the learned Counsel. Items included in Appendix 8 could be imported only through a canalising agency. Item 15 deals with copper including copper rods (wrought or unwrought). The consignment imported by the petitioners is copper wire rods and it is not in dispute that these copper wire rods are not unwrought. Shri Parsurampuria submitted that the Collector was in error in holding that the imported consignment falls within Item No. 15 of Appendix 8 and was in error in ignoring footnote No. (2) to Appendix 8. Footnote No. (2) to Appendix 8 reads as follows:
Non-ferrous metals canalised for import through MMTC will be in ''unwrought'' form. Only the import in wrought form will be governed by respective entries in other Appendices.
The plain reading of the footnote makes it clear that the Collector was in error in ignoring the impact of the footnote. It is futile to suggest that the footnote can be ignored by the Customs Department and import of even copper wire rods can be confiscated. Shri Bulchandani, learned Counsel appearing on behalf of the Department, very fairly conceded that the finding of the Collector that footnote can be ignored and is not applicable is not correct. The learned Counsel urged that the footnote is not applicable in respect of import consignment covered by Item No. 15. It was urged that the foot note is in respect of only non-ferrous metals and as Item No. 15 refers to copper including copper rods, the said footnote has no application. It is not possible to accede to the submission. The plain reading of list of items in Appendix 8 indicates that the expression "wrought or unwrought" is referred to only in Item No. 15 and in none of other 65 items. It is, therefore, obvious that the intention of the policy makers was to make footnote to applicable to Item No. 15. It is not necessary to state that neither the Government of India, who are policy makers, nor the Department filed any return to suggest what purpose of footnote was different in Appendix 8. In our judgement, the conclusion of the Additional Collector that the goods could not have been imported under OGL is clearly erroneous and the impugned order is required to be set aside.
Accordingly, rule is made absolute in terms of prayer (a). As the consignment was already cleared by interim order of this Court, the only direction required is for cancellation of Bank guarantee and bond furnished by the petitioners. In the circumstances of the case, there will be no order as to costs.