UNION OF INDIA versus M/S. GODREJ SOAPS PVT. LTD. AND ANR.

Citation: [1986] 3 S.C.R. 771 · Decided: 12-09-1986 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

I 
k 
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UNION OF INDIA 
v. 
M/S. GODREJ SOAPS PVT. LTD. AND ANR. 
SEPTEMBER 12, 1986 
[R.S. PATHAK & SABYASACHI MUKHARJI, JJ.] 
Import Policy 1985-88: 
List 8 of Part 2 of Appendix 6-Additional licence holders-
import of 'canalised' items-Permissibility of-This Court's order dated 
April 18, 1985-'Whether canalised or otherwise'-lnterpretation of. 
The respondents purchased certain quantity of palm kernel fatty 
acid on high seas basis from a firm which had imported it on the 
strength ·of an additional licence issued to it pursuant to the order of this 
Court dated 18th April.1985 in C.A. No. 1423 of 1984-o-Union of India 
v. Rajnikant Brothers. The Customs authorities refused to permit clear-
ance of the goods on the ground that they were canalised items and 
could not be imported even under such additional licences: 
The respondents filed a petition under Art; 226 challenging the 
action of the Customs authorities. A Single Judge of the High Court 
permitted the clearance of the goods, which order was affirmed by the 
Division Bench. 
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B 
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D 
E 
In the appeal to this Court on behalf of the appellant-Union of 
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India it was contended that the direction given by the High Court was 
~ . contrary to the directions given by this Court in Raj Prakash's and Jndo 
( 
Afghan Chamber's cases. 
On behalf of the respondents it was contended: (l) that the 
holders of the additional licences would be entitled to import items 
permissible to export houses under the additional lieence category· as 
per para 176 of the Import Policy for 1978-79; (2) that in any event 
under Item l of Appendix 6 (import of items under Open Genera) Li-
cence) of the Import Policy 198S-88, raw-materials, components' and 
consumables (non"iron and steel items) other than those includell in the 
Appendices 2, 3 Part A, 5 and s·wm be permissible by the-actual user 
771 
G 
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B 
c 
D 
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H 
772 
SUPREME COURT REPORTS 
[1986] 3 S.CR. 
(industrial); and (3) that the respondents were actual users (industrial) 
because these were used by them for their production. 
Allowing the appeal of the Union of India, 
HELD: I. A diamond exporter can import the items he was en-
titled to import under the Import Policy 1978-79 provided they are 
importable also under the Import Policy ruling at the time of import. 
They are items which are open to import by an Export House holding an 
Additional Licence for sale to eligible Actual Users (Industrial). These 
are items which could be directly imported, for example, the items 
enumerated in Part 2 of List 8 of Appendix VI of the Import Polic) 
1985-88. These are items which are not 'canalised'. [776F -HJ 
2. 'Canalised' items are those items which are ordinarily open to 
import only through a public sector agency. Now although generally 
they are importable through a public.sector agency only, it is permissi-
ble for the Import Policy to provide an exception to that rule, and to 
declare that an impo~r may import a canalised item directly. [776H; 777 A] 
3. Paragraph 75(1) of the Import Policy 1985-88 entitles a Trad-
ing House holding an Additional Licence to directly import canalised 
items in Appendix V Part A to the extent laid down in that Policy. There 
is nothing to prevent an Import Policy from providing in the future that 
an Export House holding an Additional Licence can directly import. 
")'.' 
certain canalised items also. In that event an Export Hou~e holding an 
Additional Licence will be entitled to import items open ordinarily to 
direct import (non-canalised items) as well as items directly importable 
although on the canalised list. It is in that sense that th•• Court could 
have intended to define the entitlement of a diamond exporter. He 
J. 
would be entitled to import items "whether canalised or not", if the · · \ 
Import Policy prevailing at the time of import permitted him to import 
items falling under each category. The Court would not lmow whether 
) 
in the future certain canalised items could be imported directly by an 
Export House holding an Additional Licence. The possibility of a policy 
being framed in the future enabling an Export House holding an Addi· 
tional Licence to directly import items which are 'non-canalised' and 
also items which are 'canalised' cannot be ruled out. It is in this light 
that the Court can be said to have used the wotds "whether canalised or 
otherwise" in its order dated 18th April, 1985. [777B-E] 
Raj Prakash Chemical's case, I 1986[ 2 S

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