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1. The Revision Application filed before the Government of India against the Order No. 117 of 1981, dated 31.1.1981 passed by the Central Board of Excise and Customs statutorily stood transferred to this Tribunal for being heard as an appeal.

2. The brief facts necessary for the disposal of this appeal are :

The Appellants M/s. Raj Copper and Cable Industries imported six Amine Pencil-lanic Acid valued at Rs. 36,45,402/- and sought clearance against the additional licence dated 19.1.1979 granted to M/s. Sawhney Brothers, exporters of readymade garments, which was valid for import of "items appearing in Appendices 5 and 7 excluding items appearing in Appendix 26 and subject to the condition that the import of a single item shall not exceed Rs. 2 lakhs in value as per para 176 of AM 79 Policy Book". The customs objected to the clearance, firstly, on the ground that the goods imported are not covered by items appearing in Appendices 5 and 7; secondly on the ground that goods are imported are canalised falling under Item 4 under the heading "drugs" of Appendix 9 and it can be imported only by the State Chemicals and Pharmaceuticals of India Ltd., thirdly, that the importers had not entered into a firm commitment with the foreign suppliers by opening an irrevocable letter of credit before 1.5.1979. Show cause notice was issued to the Appellants as to why the goods should not be confiscated and why penalty should not be levied under Section 112. They replied to the show cause. In this the Appellants inter alia contended that as early as on 15.3.1979 orders were placed with M/s. Mitsui & Company for the supply of 6 Amine Pencillinic Acid and the said company had agreed to supply the material within the validity period of the licence and the remittances will be made within 60 days from the date of Airway Bill. Due to scarcity of material in international market the suppliers requested to extend the validity of the licence to give effect to the contract and the licence holder got revalidated the licence. Thereafter letter of credit was opened and in the circumstances they pleaded that there had been no violtion of ITC Regulations. The Addl. Collector of Customs, however, rejected the contentions urged on behalf of the Appellants. He held that the import was not valid and therefore, ordered confiscation of the goods, but allowed redemption on payment of fine of Rs. 10 lakhs.
(1) 1984(18)E.LT. 694 (2) 1980 S.C. 1149 (3) 1983 E.C.R. 1607 D (4) 1973 S.C. 2711.
(5) 1983 E.LT. 258 (6) 1983 E.C.R. 784 (7) 1986 (25) E.LT. 817 (Tribunal)
5. The short question for consideration is whether the licence dated 19.1.1979 was valid to cover the goods imported, the shipment of which took place after the coming into force of the Policy AM 80.
6. The following facts are undisputed : The licence was issued to the appellants during the Policy period AM 79. It is an additional licence. It is dated 19.1.1979. It was valid for 12 months form the date of licence. By reason of the provisions contained in Handbook of Import Export Procedures the import effected within 60 days from the date of expiry of the licence could also be valid. Before the expiry of the licence period, the licence was revalidated for a further period of six months. Thus the licence period be- comes 18 months instead of 12 months. The licence was valid for import of items appearing in Appendices 5 and 7 excluding items appearing in Appendix 26 and also subject to the condition that the import of a single item shall not exceed Rs. 2 lakhs in value as per para 176 of AM 79 Policy. In the licence, the licensing period is mentioned as AM 79. By reason of para 176 of the Policy AM 79 the additional licences became valid for import of raw materials, components and spares which have been placed on open general licence for actual users (Industrial). But then the export houses are required to dispose of the goods imported against their additional licence to eligible actual users (see para 176 ended upto 31.10.78). The appellants placed orders with M/s. Mitsui & Co. Ltd., Japan, for the supply of 5,000 kgs. of 6 A. P.A. The said company vide its letter dated 15.3.1979 accepted to supply the quantity in respect of which order was placed. The contract so entered into required that the shipment should take place during the validity of the licence and payment should be made within 60 days from the date of airway bill. It is stated that due to scarcity the suppliers could not make the shipment within the validity period and therefore the licence-holders got revalidated the licence for a further period of six months, thereby the shipment that are effected within 18 months from the date of issue of licence would be valid. The actual shipment also took place before the validity period of the license, namely, during the month of March 1980.

35. The only other aspect that remained for consideration is the contention of Shri Pal that import of OGL items are subjected to conditions specified in the Appendix 10 of AM 79 and one of the conditions imposed was that the shipment should take place on or before 31.3.1979: But then the actual shipment took place on 31.3.1980 and therefore the OGL condition had not been satisfied and on this ground the import has to be held as invalid. Shri Pal's contention is altogether a new contention. This contention was not raised in the show cause notice. Even during the adjudication this objection was not taken. When the matter was before the Board also this objection was not taken. In the circumstances, it would not be open for Shri Pal to contend that the import is invalid because there had been no compliance with one of the conditions incorporated in Appendix 10. Otherwise also, there is no merit in this contention. The licence was originally valid for a period of 12 months from 19.1.1979. Therefore, if the shipment takes place on or before 31.1.1980 it would be covered by the licence. Since the licence has been revalidated extending the validity period by six months, the shipment taking place during the revalidated period would be covered by the licence. The import of OGL items was on account of the additional licence issued to the export house. If the OGL items are sought to be cleared against a licence the condition regarding the period of shipment stipulated in the policy would not apply, but only the period of validity mentioned in the licence govern the shipment. The condition regarding shipment on or before 31.3.1979 would apply to those importers who import under OGL and not against any licence issued which authorised import of OGL items.

39. The appellant's main contention in the appeal is that the change in the Policy in the subsequent year 1979-80 should not affect the validity of the licence issued during the period 1978-79. In support of this contention, the learned Consultant put forward several pleas and relied on several pronouncements which have been incorporated in Brother Hegde's order. However, scrutinising the main contention that the provisions of the subsequent Policy for the year 1979-80 would not apply to the import of the goods under the licence for the 1978-79 Policy, it is seen that the description of goods permitted to be imported refers to the items included in Appendices 5 & 7. As regards the appellants claim to import raw materials etc. which were OGL items, it is seen that during the Policy 1979-80, the import of the goods in question was covered by Appendix 9, Sr. No. 3 (4), which was a canalised item and hence ceased to be an OGL item. The appellants, however, claim that during the 1978-79 Policy the import of the goods was allowed under the OGL for Actual Users and hence the licence submitted by them was valid to cover the goods. They further submitted that the changes made in the Policy for the subsequent year should not affect the validity of the licence issued to them. However, this argument is fallacious and ignores an important condition under which the licence is issued. This condition printed on the face of the licence is as follows :