JAIN EXPORTS (P) LTD. & ANR. versus UNION OF INDIA & ORS.

Citation: [1988] 3 S.C.R. 952 · Decided: 05-05-1988 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Dismissed

Judgment (excerpt)

A 
JAIN EXPORTS (P) LTD. & ANR. 
v. 
UNION OF INDIA & ORS. 
MAY 5, 1988. 
B 
[R.S. PATHAK, CJ AND RANGANATH MISRA, J.) 
Customs Act 1962: Sections 111 and 112 & Import and Export 
~
Policy 1980-81 Appendix 9 Para 5 Entry I-Coconut oi/--'Edible' and 
'non edible' i.e. commercial or industrial-Classification of-Canalised 
goods-Determination of-Whether Customs Collector entitled to take 
c view contrary to that of Board and Central Government. 
Administrative Law: Quasi judicial tribunals-Lower authorities 
bound by decisions of higher authorities. 
·Natura/justice-Extent of opportunity of hearing to be given-
D 
Not referable to the quantum of the stake but relatable to the demands of 
the situation. 
· The appellants ar.e a Company and its Managing Director. The 
Company imported two consignments of refined industrial Coconut oil. 
The ships carrying the aforesaid cargo arrived at the port of destination 
~
E on JOth September, 1982 and 22nd September, 1982. The appellant 
No. 1 filed the bills of entry for release of the said cargo in the office of 
the Assistant Collector of Customs. Instead of release of the cargo, 
notices to show cause were received by the appellant on the allegation 
that the import of industrial coconut oil was not legal as it was a 
canalised item. The appellant No. 1 was also called upon to show cause y 
F 
as to why the cargo should not be confiscated under section 11 I ( d) of the 
Customs Act and also as to why he should be not penalised under 
Section 112 thereof. 
The appellant showed cause and took the stand that import of 
industrial coconut oil was not. banned under the import policy of the 
G Government for the relevant period. When personal hearing was alTor-
ded, it was also pointed out that the notices issued hy Respondent No. 3 >
were the outcome of bias, and that the Joint Chief Controller of Imports 
and Exports had taken undue interest in the matter. 
By the adjudication orders dated 17th December, 1982 and 20th 
H December, 1982, the respondent No. 3 came to the conclusion that 
952 
JAIN EXPORTS v. U.0.1. 
953 
"coconut oil", whether edible or not, were canalised items and fell 
within the ambit of Appendix 9 Para 5(1) of the Import Policy of 1980· 
81, and that It was also.not an Item under the O.G.L. of 1980·81 Policy. 
It was held that the Items that were Imported were liable to be con· 
flscated under 11ection lll(d) of the CU1toms Act, but an option was 
given to redeem the goods on payment or Rs.3 crores and Rs.2 crores 
respectively as redemption fines. 
The appellants filed two Writ Petitions challenging the action of 
the Collector. The Writ Petitions were heard by a Full Bench of the 
A 
B 
' High Court. Two Judges held that the writ petitions were liable to be 
J 
dismissed, while the third Judge took the view that the action of the 
Collector was totally untenable and that the writ petitions should be 
allowed and the order of the Collector should be set aside. The majority 
C 
of the Judges were also of the view that the quantum of redemption fine 
• 
should be considered by the Customs Appellate Tribunal. 
In the appeals ·to this Court it was con.tended on behalf of the 
appellants: (I)' The import policy of which year would be applicable- . D 
the period during which the licences 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 industrial variety. (3) Whether in the face 
r of the decision of the Board and Central Government as the statutory 
appellate and revisional authorities, it was open to the Collector func-
E 
tioning in lower tier to take a contrary view of the matter in exercise of 
quasi judicial jurisdiction, and (4) Whether the orders of the Collector 
were vitiated for breach of rules of natural justice, and collateral con-
siderations in the making of the order. 
Dismissing the Appeals, 
HELD: I. The High Court has come to the correct conclusion 
that the terms of the Import Policy of 1980-81 would apply to the facts 
of these cases. [957F] 
F 
In the instant case, the licences were either of 1980 or 1981 and 
G 
-..4. were revalidated froin time to time subject to the condition that items 
which do not appear in Appendices 26, 5 and 7 of the Import Policy of 
1982•83 will not be imported. [957D] 
2(a) Whatever may have been the reason for specifying 'edible 
and non-edible' classification i

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