Customs, Excise and Gold Tribunal - Mumbai
Rupak Exports vs Collector Of Customs on 3 August, 1987
Equivalent citations: 1988(37)ELT95(TRI-MUMBAI)
ORDER K. Gopal Hegde, Member (J)
1. These reference applications under Section 130(1) of the Customs Act is by M/s. Rupak Exports, the. appellants in Appeal Nos. CD(BOM) 484/85, 485/85, 486/85,487/85, 488/85, 489/85, 490/85, 491/85, 492/85, 493/85, 494/85,495/85,496/85,497/85 and 498/85. They arise out of the common order in the said appeals. They are identically worded. The reliefs claimed are also identical. Hence this common order.
2. By these applications, M/s. Rupak Exports requires the Tribunal to draw up a statement of the case and refer to the Hon'ble High Court the questions set out in their applications which according to the applicants, are questions of law and they arise out of the common order in the above stated appeals.
3. The applicants are Registered Exporters. M/s. East India Hotels Ltd., M/s. Sam Fashion Wear Pvt. Ltd. and M/s. Indo Burma Trading Corporation executed Letters of Authority in favour of the applicants to import goods covered by their respective additional licences. Accordingly, the applicants imported 24 consignments of Tarn Bearings from Singapore, and sought clearance of 8 consignments against additional licences No. P/W/0378987 dated 18-10-1980 issued in the name of M/s. East India Hotels Ltd. They sought clearance of another ten consignments against the additional licence No. P/W/0379308 dated 23-10-1980 issued in the name of Sam Fashion Wear Pvt. Ltd. and the clearance of the remaining 6 consignments were sought against additional licence No. P/W/0379317, dated 27-10-1980 in the name of M/s. Indo Burma Trading Corporation.
4. On 25th November, 1980, the applicants opened a confirmed irrevocable Letter of Credit No. 80668 in favour of M/s. Interspan Pte Ltd. for an aggregate sum of U.S. $ 378300. One of the additional conditions attached to the said Letter of Credit read: This credit is valid at present only for U.S. Dollars 75,660. Further negotiations can be made only on receipt of our amendments". The said Letter of Credit was amended twice, firstly on 9th and secondly on 13th May, 1981.
5. The Customs Authorities objected to the clearance on the ground that there had been a change in the ITC Policy and the goods imported were banned items and are not allowed for import against additional licences. The Policy that governs the import was the Policy A.M. 1982 and since there had been no firm commitment by opening an irrevocable Letter of Credit, prior to 1-4-1981, the imports are unauthorised.
6. The Additional Collector of Customs,, after affording a personal opportunity of being heard, vide his order dated 2-4-1985, ordered confiscation of 15 consignments but allowed redemption on payment of fines. He did not pass any order in respect of the remaining 9 consignments, as the goods in the said consignments could not be identified.
7. Being aggrieved by the order of confiscation, the applicants herein filed 15 appeals before the West Regional Bench of the CEGAT. The Bench consisting of one of us [Shri K.S. Dilipsinhji, Member (Technical) and Shri IP Vasisht, Member (Judicial)] clubbed all the 15 appeals together and passed a common order.
8. At the time of hearing of the appeals, on behalf of the appellants, it was contended that there was an irrevocable Letter of Credit opened prior to 1 -4-1981 for a sum of U.S. Dollars 3,78,300/- and further that the licences are governed by the Policy A.M. 81 and not by the Policy A.M. 1982. It was also contended that the import took place within the validity period of the licences. Further submissions made in the appeals were that while establishing the Letter of Credit for U.S. $ 3,78,300/- the applicants herein had paid the commission on the said amount to the Corporation Bank. The Bank released the entire amount in parts. The decision of the Supreme Court in the United Commercial Bank v. Bank of India AIR 1981 - S.C. 1426 was relied upon to explain the irrevocable nature of the Letter of Credit, The decision of the Tribunal reported in 1985(20) E.L.T. 358 was relied upon to contend that the change of date of shipment did not amount to fresh commitment. In support of the contention that the licences are governed by the Policy A.M. 1981 reliance was placed on an order of the Central Board of Excise and Customs referred to in the case of Mangala Bros. v. Collector of Customs, AIR 1985, Calcutta 122. It was further contended before the Bench that the decision of the Supreme Court AIR 1971 S.C. 704 and the Bombay High Court judgment reported in 1981 E.L.T. 235 are binding on the Tribunal.
9. On behalf of the Department, it was contended that the Letter of Credit opened was not for the entire amount but was valid only for U.S. (dollars) 75.660/-. It was further urged that the subsequent amendment dated 9-5-1981 and 13-5-1981 were In the nature of fresh commitments. It was also contended that the credit of U.S. $ 75.660/- had been utilised prior to 1-4-1.981 and as such, the Letter of Credit dated 25-11 -1980 cannot be considered as an irrevocable for the sum of U.S. $ 3.78.300/-. It was further contended that the goods imported, namely, ball bearings appeared in Appendix 3 of A.M. 82 and in the absence of opening of an irrevocable Letter of Credit before 1 -4-1981 the import of banned items during the Policy Year 1982 was unauthorised. For the Department reliance was placed on a judgment of the Punjab and Haryana High Court in the case of Oswal Woollen Mills Ltd. 1984 (18) E.L.T. 694 and also on the order of the Central Board of Excise and Customs bearing No. 62 of 1979 dated 9-2-1979. Further submissions made for the Department were that the Government had the power and jurisdiction to change the earlier I.T.C. Policy and the change cannot be questioned by an importer. In that connection, the following decisions were relied upon :
(1) 1983 ECR 160, (2) 1983 E.LT. 258, (3) AIR 1973 S.C. 2711, (4) 1984 (3 S.C.) 465, (5) AIR 1972 S.C. 935. 10. The Bench which heard the appeals formulated the following questions: (1) To what extent the L/C dated 25-11-1980 was confirmed and irrevocable, (2) Whether the licences which were issued during the Policy A.M. 81 were valid to cover the goods the shipments of which were effected during November and December, 1981 i.e., during the Policy A.M. 1982.
The Bench, after construing the terms and conditions stipulated in the L/C, recorded a finding that the present applicants were bound only for a sum of U.S. $ 75,660/- upto which the foreign supplier could negotiate the documents against L/C. On point No. 2, the Bench, after construing the terms of the licences as well as the two import policies A.M. 81 and 82 and particularly para 222(1) of the A.M. Policy 1982, held that the changes in the subsequent policy would govern the import. In support of the finding the Bench also relied on one of the conditions in the licences, namely that the grant of licences was without prejudice to the application of any prohibition or regulation affecting the importation of the goods which may be imposed at the time of their arrival.
11. Having regard to its findings, the Bench rejected the appeals.
12. During the hearing of these Reference Applications, Shri J.R. Gagrat referred to the Letter of Credit dated 25-11 -1980. He contended that it is a confirmed irrevocable commercial Letter of Credit issued by the Corporation Bank in favour of M/s. Interspan Pte. Ltd., Singapore it was specifically stated in this Letter of Credit that : "at the request of M/s. Rupak Exports, the Corporation Bank established their confirmed irrevocable Letter of Credit in favour of M/s. Interspan Pte. Ltd. to the aggregate sum of U.S. $ 3,78,300." The additional condition No. 6 was to the effect that the credit was valid at present only for U.S. $ 75.660/- does not, according to Shri Gagrat, whittle down or modify the earlier commitment made in the body of the Letter of Credit. Shri Gagrat submitted that dates of shipment mentioned in the L/C contemplates part shipments and therefore there was need for additional condition No. 6 and L/C itself was to be operated in stages. Shri Gagrat submitted that no other L/C had been opened subsequent to 25th November, 1980 and the Bank on the basis of the L/C dated 25th November, 1980 had made payments. In the said circumstances, the interpretation of L/C by the Bench in the appeals was not correct. Therefore, a question of law does arise as to the correct meaning and legal effect of the L/C and that question is required to be referred to the High Court. Shri Gagrat submitted that construction of document is a question of law as has been held by the Supreme Court in the case of Shree Meenakshi Mills Ltd. v. Commissioner of Income Tax, Madras 31 I.T.R. page 828.
13. Shri Gagrat then contended that the Bench had not properly understood the scope and ambit of para 222(1) of the A.M. 1982 Policy. The requirement of firm commitment in that paragraph was intended to exclude nominal and sham commitments and therefore while interpreting para 222 the Tribunal cannot construe the legality or validity of the Letter of Credit. All that the Tribunal could do was that whether an irrevocable L/C had been opened prior to 1 -4-1981. If such a L/C had been opened in pursuance to firm commitment then the import of goods effected during the Polilcy Period A.M. 1982 would not be unauthorised. Shri Gagrat urged that a question of law as to whether the additional licences held by the applicants continue to be valid for the import of the goods after 1-4-1981 would arise from the order of the Tribunal.
14. It was further submitted by Shri Gagrat that the licences were issued during the Policy A.M. 1981; the licences are governed by the said Policy. The Policy A.M. 1981 permitted import of ball bearings. They became impermissible for import only during the Policy period A.M. 1982 which was not applicable to the licences issued during the year 1981. Shri Gagrat submitted that the Policy cannot alter the terms and conditions of the licence which was issued under the Import (Control) Order. The finding of the Tribunal, that the licences are not valid to cover the shipments effected during the months of November and December, 1981 is not correct. And, therefore, a question of law, namely, whether the licence issued during the Policy year 1980-81 were valid to cover the goods, the shipments which were effected during November-December, 1981 would arise.
15. Shri Pal, appearing for the Collector, submitted that the points set out in paragraph 8 of the applications are not questions of law but only statements of facts. The Tribunal had considered all those statements in the appeals and therefore, the present applications were not maintainable.
16. We have carefully considered the submissions made on both the sides. We have already set out (vide para 10 above) the two questions which were formulated by the Bench. As regards the first question, the Bench, after construing the terms and conditions, stipulated in the L/C, recorded a finding that the present applicants were bound only for a sum of U.S. $ 75.660/- upto which the foreign supplier could negotiate the documents against the L/C. As seen earlier, Shri Gagrat had contended that the interpretation of the L/C by the Bench was not correct. Therefore, a question as to the interpretation of the L/C does arise for consideration. In the case of Meenakshi Mills Ltd. v. Commissioner of Income Tax, Madras the Supreme Court considered what constitutes a question of law. The following are considered by the Supreme Court as questions of law:
(1) When the point for determination is a pure question of law such as construction of a statute or document of title, the decision of the Tribunal is open to reference to the Court under Section 66(1), (2) When the point of determination is a mixed question of law and fact, while the finding of the Tribunal on the facts found is final, its decision as to the legality of those finding is a question of law, (3) A finding on a question of fact is open to attack under Section 66(1) as erroneous in law when there is no evidence to support it or if it is perverse.
17. The Letter of Credit in this case is the direct formulation of right of the applicant. Having regard to the facts and circumstances of the case, the validity of the import depends upon the construction of this document. And therefore, we agree with the contention of Shri Gagrat that a question of law does arise as to the correct meaning and effect of the L/C dated 25-11-1980.
18. As regards question No. 2, the Bench which decided the appeals had held that the licences are not valid firstly because that there had not been valid L/C opened before 1-4-1981. The Bench also held that the licences in question have been endorsed with the requirement that the grant of licences was without prejudice to the application of any prohibition or regulation affecting the importation of the goods which may be imposed at the time of their arrival. The goods have been shipped in November and December, 1981 and imported subsequently, during the currency of A.M. 1982 Policy. Therefore, in view of the endorsement on the licences the importation of the goods was prohibited at the time of arrival in India. Shri Gagrat, however, contended that since the licences were issued during the Policy A.M. 81 and the licensing period being A.M. 81 the licence will be governed by the policy under which they were issued and the new Policy namely A.M. 82 will have no retrospective effect so as to govern the licences issued during the previous policy. In that connection, Shri Gagrat had also relied on the conditions in the licence which was to the effect that "This licence will be subject to the condition in force relating to the goods covered by the licence, as described in the Import Trade Control Policy Book for the period during which the licence has been issued, or any amendments thereof made upto and including the date of issue of the licence, unless otherwise specified". We are satisfied that the Bench did interpret the additional licences and also the provisions of the Policy A.M. 81 -82 and therefore the question of law does arise as to whether the additional licences held by the applicants continue to be valid for the import of goods effected after 1st April, 1981.
19. In the applications, the following questions of law were set out:
(1) Whether the confiscated goods were imported pursuant to the firm commitments prior to 1 -4-1981 as evidenced by opening irrevocable Letter of Credit through various dealers in foreign exchange before 1-4-1981.
(2) Whether the applicants had opened an irrevocable Letter of Credit prior to 1-4-1981 to cover the entire quantity of goods imported by them even after 1-4-1981.
(3) Whether the L/C dated 25-11 -1980 issued by the Corporation Bank in favour of M/s. Interspan Re Ltd., Singapore, was an irrevocable Letter of Credit for the entire sum of U.S. $ 3,78,300/-.
(4) In view of the provisions of paragarph 222(1) of Import Policy A.M. 81-82 whether the additional licence held by the applicants continue to be valid for the import of the said goods after 1 -4-1981.
(5) Whether the confiscation of the said goods imported by the applicant was justified.
20. During the hearing, Shri Gagrat conceded that question No. 5 is not a question of law arising out of the order and further conceded that the other questions are overlapping and has left the matter to the Bench for formulating the questions that would appropriately arise from the order.
21. In our opinion, the questions of law that appropriately arise from the common order in the appeals are :
(1) Whether on the facts and in the circumstances of the case the L/C dated 25-11-1980 is a confirmed irrevocable Letter of Credit for U.S. $ 3.78.300/- is sued by the Corporation Bank in favour of M/s. Interspan Pte. Ltd., Singapore.
(2) Whether on the facts and in the circumstances of the case there was firm commitment prior to 1 -4-1981 by opening an irrevocable Letter of Credit to cover the goods ordered to be confiscated.
(3) Whether on the facts and in the circumstances of the case the additional licences of which the applicants are the Letter of Authority holders are valid to cover the goods the shipment of which were effected after the coming into force of the Policy A.M. 1982.
(4) Whether on the facts and in the circumstances of the case the imports effected are governed by the policy year 1980-81 or by the policy year 1981 -82.
22. In terms of Section 130(1) of the Customs Act, we hereby refer the questions set out in the above paragraph to the Hon'ble High Court of Bombay or its opinion.
K.S. Dilipsinhji, Member (T)
23. I have given the deepest consideration to Brother Hegde's proposed order on the Reference Applications of M/s. Rupak Exports under Section 130(1) of the C.A. but for the reasons which follow, I am not able to accept his point of view and hence this differing order. The facts of the appeals and the Reference Applications as well as the arguments of both the sides on the Reference Applications have been recorded in Brother Hegde's order and hence in the interest of brevity it is not necessary for me to repeat them here. In fact, since the points of reference framed in the applications dated 11-7-1986 of M/s. Rupak Exports were not in order and appeared to be points of facts as contended by the SDR, the learned advocate of the applicants had sought permission to file the revised points to be referred to the High Court. The revised points have not been received from the learned advocate and hence we are to dispose of the applications as they are. Brother Hegde in Para 21 of his order has set out 4 points in lieu of 5 contained in the applications. Points (1) and (2) in Para 21 are overlapping. These relate to point (1) which was considered by the Bench while passing the order on the appeals of M/s. Rupak Exports, vide para 10 of the order. Similarly, points (3) and (4) in para 21 of Brother Hegde's order cover point No. 2 in the order-in-appeal, which has been set out in para 10. However, in my view, the points which arise out of the Tribunal's order in appeal are only 2 and these are listed below.
(1) Whether there was a firm commitment through an irrevocable Letter of Credit before 1-4-1981 for U.S. $ 3,78,300/-.
(2) Whether the imports should be governed by the policy for the year 1980-81 or 1981-82.
Only these two points, which arise out of the Tribunal's order under Section 129B, can be considered for reference to the High Court in terms of Section 130 of the C.A. provided these are otherwise in order
24. While arguing the points on behalf of the applicants, the learned advocate was asked to explain how the interpretation of the letter of credit dated 25-11 -1980 can be treated as a point of law requiring reference to and clarification from the High Court. The learned advocate stated that the interpretation of a document was a mixed question of law and fact which could be referred to the High Court for clarification. The advocate relied on the Supreme Court's decision in the case of Minakshi Mills Ltd. 31 ITR 828 to urge this proposition. The advocate was next asked as to whether Section 130 of the C.A. envisages any points of law or interpretation of a document not covered under the C.A. but under other laws to be referred to the High Court. The learned advocate's answer was in the affirmative, though he could not cite any authority in support. Basing his argument on the phraseology of Section 130 of the C A., he mentioned that "any" question of law arising out of the Tribunal's order can be referred to the High Court. In his view, the points as listed in the application fully justified such a reference in terms of Section 130 of the C.A.
25. Similarly, the second point deals with the interpretation of Para 222(1) of the Import Policy 1981 -82. In Shri Gagrat's opinion this point also could be referred to the High Court for clarification as this was "any" point of law in terms of Section 130.
26. Scrutinising the contentions of the learned advocate, it is seen that the ambit of Section 130 is not so wide as to cover interpretation of points of law under acts other than the C.A. 1962 or the documents not required to be filed under the C.A. 1962. Such a wide interpretation would not be in keeping with the provision of the C.A. 1962. It is seen the. as per Section 130 of the C.A., the Appellate Tribunal can be required to refer to the High Court any point of law which has arisen out of the Tribunal's order under Section 129B ibid. Section 129B of the C.A. deals with the orders of the Appellate Tribunal in respect of the appeals to be filed to the Tribunal under Section 129A of the C.A. Sub-section (1) of Section 129A envisages four types of appeals to the Tribunal. All these four categories leave no doubt that the orders, against which appeals can be filed to the Tribunal under Section 129A are those which are passed under the C.A. Therefore, the decision of the Tribunal in terms of Section 1296 can be with reference to these appeals and these would be in respect of the decisions or orders passed under the C.A. There is no question of any other orders being passed by the Tribunal in terms of Section 129B of the C.A. Therefore any reference in terms of Section 130 of the C.A. can be only with reference to the point of law which arises out of the C.A. and not under any other Act, or any other law or regulations. Similarly, if any interpretation of a document is required to be obtained from the High Court, it would be with relation to any document which is required to be filed under the C.A. before the Proper Officer of Customs. Following the Supreme Court's decisions in similar matters the full bench of the Tribunal has held in the case of Miles India Ltd., 1983 E.L.T. 1023, vide para 33 that the Tribunal is a creature of the Customs Act and it cannot deal with issues outside this Act. Otherwise it would be inconceivable to accept that parties can seek interpretation in respect of points of law covered by some other Acts and administered by other authorities or documents which are required to be filed before the other authorities in terms of the provisioins of law which have no relationship with the Customs Department. Appying the above-mentioned criterion, it has to be examined whether point No. 1 requires a reference to the High Court as submitted by the applicants. The learned advocate was at pains to explain that in passing the order No. 505-519/86 WRB, dated 2-5-1986, the Tribunal misinterpreted the letter of credit dated 25-11-1980. The advocate was therefore asked as to whether the Tribunal had committed an error in the order and therefore a rectification application in terms of Section 129B(2) would not be apt instead. The advocate stated that it was not so as it involved a question of interpretation of the L/C. While arguing the point, the advocate accepted the fact that the annexure to the L/C dated 25-11-1980 issued by the Corporation Bank was a part of the arrangement arrived at on the same day, namely, 25-11-1980 and was issued on that day only, though the advocate described this annexure as an arrangement between the two banks and not between the Corporation Bank and their client M/s. Rupak Exports. In other words, the applicants seek the remedy of the C.A., interpret this L/C. It is to be borne in mind that the L/C is not required to be filed in terms of the C.A., before a Proper Officer of Customs. The terms and conditions of opening the L/C are also not governed by the C.A. Therefore, it is not a document which is required under the C.A. 62. Though under Section 17 of the C.A., the Proper Officer of the Customs is empowered to require the importer to produce any documents considered necessary by him for the purpose of assessment of Customs duty, it is to be seen that the L/C in question was not a document required by the Proper Officer in terms of Section 17. Therefore, there is no question of the Proper Officer of Customs calling for this document in terms of the C.A. The letters of credit have been a recognised mode of remittance since the institution and development of banking in our country. They are governed by their own law. On the other hand, the provisions of Section 130 of the C.A. have been brought into existence only from 11 -10-1982. It would be too much to concede that this specific provision of Section 130 could be invoked to seek interpretations of letters of credits. The provisions of Chapter XV of the C.A. have been introduced with effect from 11 -10-1982 and it could not be the intention that these provisions can be used for intepreting some other documents which are prescribed by other laws. Nor do the wordings of Section 130 permit such an interpretation. Therefore, with great deference to the advocate's point of view, I am unable to accept his contention that the phraseology of Section 130 is wide enough to permit the Tribunal to seek the interpretation of the letter of credit from the High Court.
27. Apart from this fact, the interpretation as to whether the letter of credit was for the confirmed amount of U.S. $ 3.78.300/- or for U.S. $ 75.660/- initially is a question of fact and not one of law. The annexure to the L/C was a part of the L/C itself and the applicants were well aware of the content. The lower limit was the confirmed amount when the L/C was opened on 25-11-1980 and this was utilised before 1-4-1980. Therefore by seeking to re-open this issue, the applicant has for all practical purposes attempted to argue the appeal once again, as contended by the learned SDR. Such an invidious attempt to re-open closed issues has to be rejected very firmly and cannot be allowed to succeed. Otherwise it would lead to a plethora of applications which is not the intention of the enactment. In this behalf, I rely on the case of Trustees Corporation (India) Ltd. v. C/T, 4 I.T.C. 378.
28. Similarly, it is seen that the Import Policy for 1981 -82 has been issued by the Ministry of Commerce. The policy is an annual document issued by the Department of Commerce in the Ministry of Foreign Trade by virtue of the powers vested in that Ministry under the Imports and the Exports (Control) Act, 1947. The policy is administered by the Chief Controller of Imports and Exports and his subordinate staff. The Chief Controller of Imports and Exports works under the supervision and control of the Ministry of Foreign Trade. It would be therefore incongrouous to believe that the provisions of such a document can be interpreted through a reference under the C. A. The Imports and Exports (Control) Act is a self contained Act and there are no provisions in that Act which would permit such an interpretation as urged by the learned advocate. Besides the Customs Department is under the control of the Ministry of Finance and the Customs Department administers the Customs Act. Under the Allocation of Business Rules, 1961 framed by the President of India in terms of Article 77(3) of the Constitution, the administration of all matters relating to Customs Act has been made the responsibility of the Department of Revenue in the Ministry of Finance. On the other hand, all matters relating to Import and Export Trade policy and control and the Chief Controller of imports and Exports have been assigned to the Department of Commerce. Therefore, it would be against the principles of Article 77 to concede the learned advocate's point that the provisions of the Import policy can be interpreted through a reference under the Customs Act. To complete the examination of the advocate's contention, it is necessary to mention that the Banking Division in the Department of Economic Affairs in the Ministry of Finance oversees the work of all banks whether nationalised or not and the administration of all statutes, regulations and other laws connected therewith. Therefore, there is not an iota of doubt that a letter of credit which concerns banking falling under the assignment of the Economic Affairs Department can be interpreted under the Customs Act which falls under the Revenue Department of the Ministry of Finance. In view of the aforesaid facts there is no substance in the advocate's contention that the provisions of Para 222 of the Import Policy 1981-82 can be clarified through a reference under Section 130 of the C.A., and I reject such a contention.
29. Coming to the merits of the advocate's contention, he has relied on the judgment of the Calcutta High Court in the case of Mangala Brothers, AIR 1985 Calcutta 122, to urge that the licences issued during the year 1980-81 cannot be subjected to the provisions of the Import Policy for the subsequent year 1981-82. The Calcutta High Court's judgment no longer holds the field. The Supreme Court has laid down in the case of Raj Prakash Chemicals Ltd. Civil Appeal No. 4978/85 that for an import to be valid, it should not only be in accordance with the import licence for the policy year in which it is issued, but also in accordance with the provisions of the policy when the import is made. Therefore, in view of the Supreme Court's judgment in the case of Raj Prakash Chemicals, the reliance by the applicants on the Calcutta High Court's judgment in the case of Mangala Brothers becomes obsolete. In fact, the Supreme Court's judgment in the case of Raj Prakash Chemicals clarifies Point (2) in the application. When this is taken into account, we have the Supreme Court's ruling on the point in question and therefore no further clarification need be sought from the Hon. Bombay High Court on the point in question. In fact, the Supreme Court's judgments in the case of flay Prakash Chemicals Ltd. and the identical cases of Indo Afghan Chamber of Commerce, AIR 1986 S.C. 1567 and M/s. Godrej Soaps Private Ltd. 1986 (26) E.L.T. 465 have been passed in the year 1986 and they have taken into account the Supreme Court's decisions in similar matters in the past and considered all the relevant facts. They lay down the law in terms of Article 141 of the Constitution. These judgments have been quoted a number of times before this Bench. Brother Hegde's order does not take them into consideration. But since these judgments lay down the law of the land they hold the field; and as per these pronouncements there is not an iota of doubt that the imports of Rupak Exports are subject to the requirements of the import policy for the year 1981 -82 as per Para 222 of the policy. In this view the imports were hit by entry at Serial No. 557 of Appendix 3 and hence the imports were unauthorised. Therefore from practical point of view also, no useful purpose can be served by making a reference to the High Court for interpreting the letter of credit as urged by the applicants.
30. Thus both on points of law and on merits, I find that the applications of M/s. Rupak Exports are mis-placed and they deserve to be rejected. I order accordingly.
31. Since there has been a difference of opinion between the two Members of this Bench, the following point of difference is referred to the President in terms of Section 129-C(5) of the Customs Act :-
Whether in the facts and circumstances of the case, the Reference Applications of M/s. Rupak Exports should be allowed as held by Member (J) or whether they should be rejected as held by Member (T).
P.C. Jain, Member (T)
32. The points of difference of opinion occurring between the two learned Member (Technical) and (Judicial) - Shri K.S. Dilipsinhji and Shri K. Gopal Hegde, has been referred to me by the Hon'ble President in terms of Section 129-C(5) of the Customs Act is as follows :
"Whether the Reference Application should be rejected as held by Member (T) or whether the Reference Application should be allowed and the points of law set out in the order of Member (J) should be referred to the Hon'ble High Court of Bombay."
33. Member (J) has formulated the following 4 questions for reference to the Hon'ble High Court of Bombay for its opinion :-
(1) Whether on the facts and in the circumstances of the case the L/C dated 25-11 -1980 is a confirmed irrevocable Letter of Credit for U.S. $ 3,78,300/- issued by the Corporation Bank in favour of M/s. Interspan Pte. Std., Singapore, (2) Whether on the facts and in the circumstances of the case there was firm commitment prior to 1 -4-1981 by opening an irrevocable Letter of Credit to cover the goods ordered to be confiscated, (3) Whether on the facts and in the circumstances of the case the additional licences of which the applicants are the Letter of Authority holders are valid to cover the goods the shipment of which were effected after the coming into force of the Policy A.M. 1982, (4) Whether on the facts and in the circumstances of the case the imports effected are governed by the policy year 1980-81 or by the policy year 1981 -82.
34. Learned Member (Technical) on the other hand has held that letter of credit is not a document filed under the Customs law, nor is interpretation of Import Policy a matter for reference to the Hon'ble High Court in terms of Section 130 of the Customs Act. That section, according to learned Member (T), is applicable only in respect of documents required to be filed under the Customs Act, 1962 or to cover interpretation of points of law arising out of the Customs Act alone. Apart from the aforesaid view, the learned Member (T) has also held that the questions relating to interpretation of Import Policy are settled by the Hon'ble Supreme Court by a number of judgments such as in the case of Raj Prakash Chemicals 1987 (30) E.LT. 45, Godrej Soaps Pvt. Ltd. 1986 (26) E.L.T. 465 and Indo Afghan Chamber of Commerce (AIR 1986 S.C. 1567) and, therefore, it has been held by the learned Member (T) that the law being settled, there is no need for a reference to the Hon'ble High Court.
35. Learned advocate for the applicant Shri J.R. Gagrat has stated that all the 4 questions are clearly questions of law inasmuch as they involve interpretation of a document, whether the letter of credit opened by the applicant is a firm commitment or not and secondly interpretation of Policy is also a question of law. As regards the scope of Section 130, as held by the learned Member (T), the learned advocate Shri Gagrat has stated that this point now stands settled by the opinion of the learned Third Member Shri S.D. Jha, Vice-President (J) in the case of Espi Industrial Corporation v. Collector of Customs, Bombay, [RA(Bom.)49/86]. That opinion forms part of the Order No. 806/87 WRB. That opinion has also held that interpretation of document and interpretation of Import Policy are questions of law and once the questions of law arise out of the order of the Tribunal, the Tribunal cannot refuse to refer those questions to the Hon'ble High Court.
36. Learned SDR Shri G.D. Pal appearing for the non-applicant has reiterated the findings of the learned Member (T) and has stated that apart from the scope of Section 130 of the Customs Act, it has been clearly held by learned Member (T) that the questions raised in the application and as formulated by the learned Member (J) are clearly questions of fact.
37. I have carefully considered the pleas advanced on both sides, as also gone through the opinions of my learned brothers. I am inclined to agree with the learned Member (Judicial) that the questions raised in the application and as finally formulated by him in his opinion are all questions of law and required to be referred to the Hon'ble High Court of Bombay. As rightly observed by the learned advocate for applicant, opinion of the learned Third Member Shri S.D. Jha in the case of Espl Industrial Corporation mentioned supra is very apt in the facts and circumstances of this application. Accordingly, I respectfully hold that the four questions as formulated by the learned Member (Judicial) be referred to the Hon'ble High Court of Bombay, for its opinion.
FINAL ORDER
38. The point of difference between the two Members of this Bench was referred by the President in terms of Section 129-C of the Customs Act to the third Member Shri P.C. Jain who has since recorded his opinion. The Reference applications are required to be disposed of in accordance with the aforesaid provisions of law on the basis of the majority view. In majority view, the following questions of law arising out of the Tribunal's order are required to be referred to the Hon'ble High Court in terms of Section 130 of the Customs Act:
(1) Whether on the facts and in the circumstances of the case the L/C dated 25-11 -1980 is a confirmed irrevocable Letter of Credit for U.S. $ 3.78.300/- issued by the Corporation Bank in favour of M/s. Interspan Pte. Std., Singapore, (2) Whether on the facts and in the circumstances of the case there was firm commitment prior to 1-4-1981 by opening an irrevocable letter of credit to cover the goods ordered to be confiscated, (3) Whether on the facts and in the circumstances of the case the additional licences of which the applicants are the Letter of Authority holders are valid to cover the goods the shipment of which were effected after the coming into force of the Policy A.M. 1982, (4) Whether on the facts and in the circumstances of the case the imports effected are governed by the policy year 1980-81 or by the policy year 1981 -82.
39. Accordingly, we allow the Reference Applications and refer the aforesaid questions of law to the Hon'ble Bombay High Court for opinion.