JAIN EXPORTS PVT. LTD. AND ANR. versus UNION OF INDIA AND ORS.

Citation: [1993] SUPP. 1 S.C.R. 185 · Decided: 14-07-1993 · Supreme Court of India · Bench: M.N. VENKATACHALIAH, A.M. AHMADI, J.S. VERMA · Disposal: Dismissed

Judgment (excerpt)

JAIN EXPORTS PVT. LTD. AND ANR. 
v. 
UNION OF INDIA AND ORS. 
JULY 14, 1993 
[M.N. VENKATACHALIAH, CJ. A.M. AHMADI 
AND J.S. VERMA, JJ.] 
Customs Act, 1962: Sections 11 l(d) and 125. 
A 
B 
Import-Violation of Import Policy-Confiscation-Redemption C 
fine-Factors relevant for determining quantum of-Relevance of bona 
fide-Bona fide alone not sufficient for waiver of fine-Totality of circumstan-
ces should be borne in mind. 
Imports an_d Exports (Control) Act, 1947: Section 3(1). Canalised 
item-Import under Open General Licence-Validity of-Plea of bona D 
fid..,_Re/evant material relating to bona fide not placed on record-Import 
held illegal and not bona fide. 
Import and Export Policy 1980-81. Appendix 9 Entry 5-'Coconut 
Oil'--Cornpetent authority to interpret-'-Who is-Held : Chief Cotroller of 
Imports and Exports is competent and not State Trading Corporation. 
E 
Constitution of India, 1950: Articles 32 and 136. 
Custom Authorities-Redemption fine imposed by-Power of Supreme 
Court to inteifere with. 
Practice and Procedure 
Appeal-Demand for re- hearing-Relevant document not submitted 
during hearing of appeal but after conclusion of hearing-Demand held not 
justified. 
The appellants imported two consignments of Refined Indnstrial 
Coconut Oil. The imports in question, though under the 1980-81 Import 
Policy, took place in 1982 under the Letter of Credit dated 31st July, 1982 
F 
G 
and the consignments were sold on high-seas bas~.s. Since Coconut oil was 
mentioned under Entry 5 of Appendix-9 of 1980-81 Policy as a canalised H 
185 
186 
SUPREME COURT REPORTS [1993] SUPP. 1 S.C.R. 
A item which could be imported through State Trading Corporation only, 
the Collector of Customs, Ahmedabad issued show-cause notice to the 
appellants stating that the import was illegal. The appellants contested the 
notice stating that the import was legal and valid and in any case it was 
bona fide as they had in good faith assumed that the non-edible variety of 
B coconut oil was not a canalised item and as such could be imported under 
the Open General Licence. However, the Collector rejected the appellants' 
case and ordered confiscation but gave option to them to redeem the goods 
on payment of fine of rupees two crores and three crores respectively. The 
appellants filed writ petitions in the Delhi High Court challenging the 
Collector's orders which were dismissed with liberty to the appellants to 
C file appelas, confined to the question of redemption fine, before the Central 
Excise and Gold Control Tribunal. 
D 
Against the judgment of the High Court, in so far as it related to the 
·· validity of the import, the appellants filed apeals in this Court which were 
dismissed holding inter alia that the terms of the import policy of 1980-81 
were applicable to the case and that all varieties of coconut oil, edible as 
well as non-edible were canalised items under the 1980-81 policy. 
Against the imposition of redemption fine, the appellants preferred 
appeals before the Tribunal which were dismissed without favouring any 
E reduction in the fine. The Tribunal's order was challenged in this Court 
which remitted the matter to the Tribunal to reconsider the case and 
determine the bona fide of the appellant's action. However, after re-hearing 
the Tribunal dismissed the appeals holding that the appellants' action was 
not bona fide. Against the decision of the Tribunal, appeals were filed in 
this Court which were allowed and the redemption fine was reduced to 35% 
F holdng that some of the circumstances relied on by the appellants in 
support of the bona fide plea were relevant. Thereafter the respondents 
filed review petitions which were allowed and the appeals and writ petition 
were directed to be reheard. 
G 
The appellants-petitioners contended that the redemption fine 
should be wholly waived or substantially reduced as their action in import-
ing the goods under Open Geneal Licence was bona fide. The circumstan-
ces relied upon in support of the bona fide were : (1) the import was made _ 
against the additional licences issue during the policy period 1980-81 and 
hence the fact that the Letter of Credit was opened on 31st July, 1982 and 
H the import was made in September 1982 was of no consequence; (ii) they 
( 
JAIN EXPORTS v. U.0.1. 
187 
were informed by the Chief Marketing Manager of State Trading Corpora-
A 
tion by his letter dated 30th October, 1980 that the non-edible variety of 
coconut oil was not a cana

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