LexSTEEL AUTHORITY OF INDIA LTD. versus SHRI AMBICA MILLS LTD. AND ORS.
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STEEL AUTHORITY OF INDIA LTD. A v. SHRI AMBICA MILLS LTD. AND ORS. OCTOBER 17, 1997 [M.M. PUNCHHI AND K. VENKATASWAMI, JJ.] B Import & Export Policy-Scheme under-Import licence holder to have certain conditions fulfilled in order to get supply of raw material-Application furnished on a particular date for supply of raw material defective and not C accompanied by requisite documents-Corrected documents filed only after _the price of the raw material enhanced -Held, the sale price chargeable is price ruling on the date on which acceptable and operative financial arrangements are made in favour of supplier by import licence holder eligible to get supplies under the Scheme. Companies Act, 1956 : Appellant company-Incorporated under the Companies Act-Entirely owned by Government of India-Held, a separate entity and not a department of the Union of India. The first-respondent (importer) was manufacturer of steel tubes for which hot rolled strips in coils were required as raw material. This raw material was being supplied by the appellant. For supply of the raw material, D E the importer was required to have import licence and have to carry out certain export obligations for the period in question under the Scheme published under the Import & Export Policy. The importer becomes eligible for supply F of raw materials on compliance of the conditions fixed in the Scheme in particular, the conditions of procuring advance licence, duty exemption entitlement certificate, legal undertaking/execution of export bond and furnishing of irrevocable letter of credit. The appellant as an indigenous supplier made an announcement of the prices at which the raw material will G be supplied against valid import licences. Pursuant to this announcement, the importer submitted licences requiring raw material. However in the licence submitted by the importer, there was no mention that it was an advance import licence nor was it accompanied by duty exemption entitlement certificate and the bond. The letter of credit submitted by the importer (on 20.8.1983) ~1 H 502 SUPREME COURT REPORTS [1997) SUPP. 4 S.C.R. A contained certain infirmities and when the same was pointed out the same were rectified and submitted before 25.8.1983. In the meantime the appellant enhanced the price of the raw material w.e.f. 25.8.1983. The importer furnished the relevant documents after corrections with necessary enclosures only on 26.8.1983, and was required to pay the price for the release of the B raw materials at an enhanced price. The importer moved the High Court for quashing the announcement and the refund of difference between the pre- revised and the revised prices. Though the main question before the High Court was the challenge to the right of the appellant to fix the price of the raw material from time to time, however, the High Col!rt on a wrong premise that the appellant was a department of the Union of India, held that the licence C though defective must be deemed to have been presented on 20.8.1983 long before the price was revised. Hence this appeal. Allowing the appeal, this Court HELD : 1.1. The High Court erred in thinking that SAIL was a D department of the Union of India and most of the reasons given in the judgment are based on this wrong premise. E 1.2. A company though fully owned by Union of India when incorporated takes its own entity/identity and cannot be considered as department of the Union of India. [511-GJ Dr. S.L. Agarwal v. The General Manager, Hindustan Steel, Ltd., AIR (1970) SC 1150 and Western Coalfields Ltd. v. Special Area Development Authority, Korba & Anr., AIR (1982) SC 697, relied on. 2.LThe importer in this case is not a new entrant to plead ignorance F though that may not be an excuse. Importer has presented application for registration before and after the application in question and, therefore, it must be taken that the importer knew fully well the requirements for registering the indent. It is also relevant to note that the appellant on receipt of the application for registration expressly and in writing replied not only G pointing out the defects but also stated that they are not taking any action on the Letter of Credit enclosed along with the licence. It is also an admitted fact that the indent was registered only on 28.8,1983 when all the relevant documents after curing the defects was presented on that date. Under these circumstances and in th
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