M/S KAJARIA EXPORTS LTD. AND ORS. versus UNION OF INDIA AND ORS.

Citation: [1995] 3 S.C.R. 227 · Decided: 07-04-1995 · Supreme Court of India · Bench: S.C. AGRAWAL, SUJATA V. MANOHAR · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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M/S KAJARIA EXPORTS LTD. AND ORS. 
A 
v. 
UNION OF INDIA AND ORS. 
APRIL 7, 1995 
[S.C. AGRAWAL AND SUJATA V. MANOHAR, JJ.) 
B 
Import and Export Policy 1984-85 : 
White CemenHmport of-Held Open General Licence item covered 
under appendix 6 List 8 Part III Item 33-Held not a canalised item under r, 
Appendix 5 Part B Item at Serial No. 8-'White Cement' 'Ordinary Portland 
Cement'-Distinction between. 
Imported Cement Control Order 1978: Clause 2( aT-'Cement'-Dejini-
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· The appellant imported 5000 metric tonnes of white cement and 
sought its clearance as an Open General Licence item under Appendix 6 
List 8 Part III Item 33 of the Import and Export Policy for 1984-85. The 
clearance was denied on the ground that it was a canalised item under 
Appendix 5 Part B item at serial No. 8 of the Import and Export Policy E 
and a show cause notice was issued to the appellants. The appellants 
challenged the show cause notice before the High Court which by an 
interim order allowed clearance of goods on appellants' funishing of a 
bank guarantee as well as undertaking to pay interest in the event of 
dismissal of their writ petitions. Pursuant to the interim order the respon-
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dent adjudicated the matter and held that white cement could not be 
imported under Open General Licence and consequently imposed a penal-
ty of Rs. 29,57,000 and also directed enforcement of bank guarantee. The 
High Court also dismissed the appellants' petitions by holding that white 
cement could not be imported under Open General Licence and was 
covered by Appendix 5 Part B Item at Serial No. 8 of the Import and Export G 
Policy and was a canalised item. Against tbe Judgment of the High Court 
appeals were preferred before this Court. 
Allowing the appeals and setting aside the impugned judgment, this 
Court 
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227 
228 
SUPREME COURT REPORTS 
(1995] 3 S.C.R. 
A 
HELD : 1. For the purposes of import, white cement is not a 
canalised item under entry at Serial No. 8 of Appendix 5 Part B of the 
Import and Export Policy for 1984·85. [232-H) 
2. In item No. 8 itself there Is a clear reference to the manner In 
which cement which is covered by that Item Is to be Imported. The item 
B refers to the policy or the Government In the Ministry or Industry in 
connection with import or cement and specifically states tbat Import by the 
State Trading Corporation shall be governed by such policy. The policy of 
the Government in the Ministry of Industry Is therefore, directly relevant 
for the purpose or interpreting this Item and Is reflected In the order called 
C the Imported Cement Control Order 1978. The definition or cement under 
clause (2) of the Order excludes white cement from the purview or the 
Order. In other words, white cement Is not considered to be a canalised 
item which can be imported by the State Trading Corporation of India. 
Had it been so cousidered, the Imported Cem.ent Control Order of 1978 
would have included white cement within the scope or Its definition. Fur· 
D ther a Press Note issued by the Government of India, Ministry of Industry 
dated 27th February 1982 also refers, inter alia to the Import of ordinary 
portland cement by the State Trading Corporation and makes no reference 
to the import of white cement. [230-G, H, 231·A, B, F, 232-B) 
E 
Re : M/s. Purbachal International and Anr., (1985) 21 E.L.T. 673 
(Cal.), approved. 
3. The order Imposing penalty is set aside. However, the appellants 
are bound to pay all duties of customs lo relation to this Import with 
interest @ 15% per annum from the date of adJudlcation till payment. 
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[223-CJ 
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CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 4922.23 
of 1994. 
From the Judgment and Order dated 23.3.94 of the Bombay High 
Court in W.P. No. 2506/84 & 15 of 1985. 
K.N. Bhat, U mapathy Gupta and Rakesh K. Sharma for the Appel-
lants. 
K.N. Bajpai, G. Prakash and V.K. Verma for the Respondents. 
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The Judgment of the Court was delivered by 
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!(AJARIAEXPORTS LTD. v. U.O.l. [SUJATA V. MANOHAR, J.] 
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MRS. SUJATA V. MANOHAR, J. The appellants imported 5000 A 
metric tonnes of white cement which arrived at the Port of Bombay on or 
about 17.11.1984. The appellants filed bills of entry for home consumption 
in respect of the goods so imported and sought clearance of the said goods 
as an Open General Licence Item under Appendix 6 List 8 Part III Item 
33 of the Import and Export Policy for April 1984-March 1985. Oearance, B 
however, was no
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