PRIYANKA OVERSEAS PVT. LTD. AND ANR versus UNION OF INDIA AND ORS.

Citation: [1990] SUPP. 3 S.C.R. 138 · Decided: 15-11-1990 · Supreme Court of India · Bench: K.N. SINGH · Disposal: Dismissed

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Judgment (excerpt)

A 
B 
PRIYANKA OVERSEAS PVT. LTD. AND ANR. 
v. 
UNION OF INDIA AND ORS. 
NOVEMBER 15, 1990 
[K.N. SINGH AND N.M. KASLIWAL, JJ.] 
Customs Act, 1962-Sections 26, 60, 68, 112(a)-Palm Kerne/-
Import of-Whether permissible-Duty payable-What is. 
The appellant company made a contract on 10.6.87 with the 
C 
foreign suppliers to Import under Open General Licence 35 ,000 MT of 
"Palm Kernel". Under the above contract 10681.832 MT of palm 
kernel was shipped from Nigeria on 26.6.87 and 25. 7 .87 under different 
bills of lading. The goods arrived in the territorial waters of India on 
2 /3rd October, 1987. 
D 
Prior to 27. 7 .1987 Import of palm seeds was canalised under the 
Import Policy for the years 1985-88. On 27.7.1987 the Chief Controller 
of Imports & Exports issued a Public Notice Cl!Jlalising _import of "any 
other material from which oil can be extracted" also. 
As the appellant was apprehending some dispute on the import of 
E 
palm kernel, it filed a writ petition in the High Court on 28.7.87, and 
the learned Single Judge passed two interim orders. On BJ:lpeal 11gainst 
these orders, the Division Bench on 2.12.87 set aside the interim orders 
with the consent of the parties and expedited the proceedings already 
initiated under section 124 of the Customs Act, 1962 for conf"iscation of 
the goods. 
F 
The Collector of Customs by adjudication order passed on 
7.12.1987 held that the item "Palm Kernel" was a prohibited item for 
import except through canalisation by the State Trading Corporation in 
terms of the Import Policy and, consequently its import without a valid 
licence was in contravention of the provisions of the Customs Act, 1962 
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read with the Imports and Exports (Control) Act, 1947. The Collector 
in these circumstances directed· the confiscation of the entire goods but 
gave an option to the appellant company to redeem the goods on 
payment of f"me of Rs.90 lacs. The Collector also imposed a personal 
penalty on the appellant. 
H 
The customs duty as applicable on the date of the arrival of the 
138 
PRIYANKA OVERSEAS v. U.0.1. 
139 
ships, i.e. 2/3rd October, 1987 was 105%. The said customs duty was 
withdrawn on 4.12.87 and as such there was oil duty on palm Kernel, 
and this position remained opto 28.1.88. The exemption from customs 
duty was however withdrawn from 29.1.88 as a result of which the 
earlier duty of 105% came into effect. The customs duty was further 
increased from 1.3.88 and the new customs duty was at 245%. 
The appellant company removed 3935.364 MT of Palm Kernel on 
17.12.87 by paying proportionate amount of penalty and nil customs 
duty. The appellant then f'I)ed bills of entry for the remaining1i746.468 
MT of Palm Kernel on 28.1.88 but did not depoit the redemption fme. 
On merits, the learned Single Judge by his order dated 19.4.88 
held that the Palm Kernel was an item different and distinguished from 
Palm seeds, and the same could be imported under OGL as it was 
covered under item no. 1, Appendix 4 of the Import Policy. Accordingly, 
the learned Judge ordered the goods to be cleared on payment of such 
duties as were Ieviable on 28.1.88, when the appellant had entered the 
bill of entry seeking clearance of the goods. 
The Division Bench on appeal affirmed the order of the Trial 
Court in so far as the setting aside of the adjudication order was con-
cerned. The Division Bench however held that the appellant shall be 
entitled to get delivery of the balance goods on payment of duty at the 
rate prevailing in October, 1987. 
Both the parties preferred appeal before the Court by special 
leave, 
A 
B 
c 
D 
E 
Before the Court it was inter alia contended on behalf of the 
appellant company that (i) Palm seed and Palm Kernel were two diffe-
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rent items as shown in the commercial transactions in the trading com-
munity and Palm seeds alone was a canalised item; (ii) a f1SCal statute 
had to be construed strictly and in favour of a citizen especially when 
the question of imposing rme and penalties was involved, and (iii) the 
Palm Kernel having been shipped by the foreign seller from Nigeria on 
or before 27. 7.87 the appellant was legally entitled to import the same 
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under the OGL. 
It was further contended that the rate of duty of the imported 
goods, as provided in section 15 of the Customs Act, 1962 shall be the 
rate and valuation in force, in the case of goods cleared from a 
warehouse under section 68, on the date on which the goods were acto-
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140 
SUPREME

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