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4. The case of the first and third respondents before the second respondent was that Amoxycillin Trihydrate became a canalised item on 16.10.1981 and on the date of placing of order and opening of the letter of credit, the said good has become a canalised item. Under the provisions of Section 3(1) of the Imports and Exports Act, Amoxycillin Trihydrate could not be imported under OGL licence, as the said item became canalised item and brought under Appendix IX (iii)(2) of the Import and Export Policy, 1982-83 with effect from 16.10.1991. The case of the first and thrid respondents was that the additional licence in question was not valid for the import of the goods in question. It is also stated that by virtue of the public notice No. 11/82 dated 25.2.1982, import of O.G.L. item by export house under R.E.P. and additional licences was restricted upto 31.3.1982 or the expiry of the validity of the licence (without any grace period) whichever is earlier. Though the licences in question have expired on 26.3.1983 and on 27.12.1982, the import could have been made only upto 31.3.1982, whereas the shipment of the goods was effected on 13.2.1983, long after the expiry of the date prescribed in the public notice. The further contention was that the endorsement for the revalidation did not indicate any provision or condition for the goods in question. Hence, the contention was that the licences were not valid for the import of the goods in question. Further, it was also pleaded that when the letter of credit was opened on 3.1.1983, the goods became a canalised item and the petitioner should not have entered into any firm commitment for the import of the goods. It is also stated that under the provisions of paragraph 231(3) of the Import and Export Policy, 1982-83, the petitioner could not import under the open general licence the goods in question.

7. In the counter affidavit filed by the thrid respondent, after setting out the facts relating to the import of the consignment of Amoxycillin Trihydrate, it is stated that according to paragraph 231(3) of 1982-83 Imports Policy, R.E.P. licences or additional licences held by the export houses/trading houses would cease to be valid for import of any item which would be imported under O.G.L. during 1981-82 policy period but no longer so during 1982-83 period. Since Amoxycillin Trihydrate became a canalised item with effect from 16.10.1981 and continued to be so during 1982-83 policy, the said importation under O.G.L. cannot be allowed as claimed by the petitioner. According to the third respondent, I.T.C. public notice No. 11/82 dated 25.2.1982 restricted the import of O.G.L. items by export houses / trading houses against REP licences or additional licences upto 31.3.1982 or till the expiry of the validity of the licence without grace period whichever is earlier, and the tune prescribed was only upto 31.3.1982 and the shipment of the goods was made on 25.2.1983, and it was in violation of the import policy. Since the endorsement for revalidation did not indicate any special provision for importing the goods in question, the restrictions contained in public notice No. 11/82 and para 231(3) of 1982-83 would apply.

9. Mr. Habibulla Badsha, learned senior counsel appearing for the petitioner submitted that the public notice No. 51/ITC-81 dated 16.10.1981 and the public notice No. 11/ITC-82, dated 25.2.1982 read with public notice No. 64/ITC(TN)81, dated 16.12.1981 (hereinafter to be referred to as public notice No. 11) have no retrospective effect. Learned senior counsel submitted that the import licence granted by the Chief Controller of Imports and Exports is to be governed by the import policy as on the date of issue, and as such the subsequent amendment made to the import policy has no effect to the import licence already granted. He relied upon a decision of the Supreme Court in the case of Bharat Barrel Drums Mfg. Co. Ltd. v. Collector AIR 1971 S.C. 704 and a decision of Calcutta High Court in the case of Mangla Brothers v. Collector of Customs and Ors. AIR 1985 Calcutta 122 and submitted that the licence issued during the policy period is governed by the policy as amended upto the date of issue of the licence and any such subsequent amendment has no effect on the licence. He further submitted that the part of the order of the Appellate Tribunal has become final. Mr. Habibulla Badsha, learned senior counsel further submitted that the licence is issued on the basis of Import Control Order. He, therefore, submitted that the licence issued under the control order is statutory in nature, and it is not permissible to modify the statutory order by an executive public policy. He placed reliance on a decision of the Supreme Court in East India Commercial Co. Ltd. v. Collector of Customs AIR 1962 S. C. 1893 and submitted that the public notices are not orders issued under Section 3(1) of the Imports and Exports Act, and whereas the licence issued under Section 3 has the statuory force. Therefore, he submitted that the public notice which came into effect subsequently canalising Amoxycillin Trihydrate with effect from 16.10.1981 has no effect on the import licence already granted. He, further submitted that in the case of first licence, it was valid for shipment upto 27.12.1982 and this licence was revalidated for six months from 27.7.1982 i.e. upto 31.3.1983 and subsidiary licence was also revalidated upto 27.12.1982. He submitted that at the time of revalidation no condition whatsoever was imposed regarding the import of the item, and the letter of authority was issued on 30.9.1981, but only on 16.10.1981, Amoxycillin Trihydrate became a canalised item by the public notice No.51/81. He submitted that the petitioner placed orders for Amoxycillin Trihydrate on 23.12.1982 and the petitioner filed application for opening the letter of credit on 30.12.1982 and the letter of credit was opened on 3.1.1983, and the bank was also informed by the petitioner that the letter of credit was established on 30.12.1982 and G.F.I, value for each of the licences is found in page 34 of the typeset. He, therefore, submitted that the licence was issued prior to the public notice and as per the endorsement of revalidation, the licences were valid upto 26.3.1983 and 27.12.1982. Amoxycillin Trihydrate was an O.G.L. item which continued to be in respect of licence issued prior to 16.10.1981. Though the public notice No. 11/82 restricted the import upto 31.3.1982 or from the expiry of the validity licence (without any grace period), the dates of the expiry of the validity licences were 26.3.1983 and 27.12.1982. Hence, it was open to the petitioner to import goods upto 31.3.1983. Since the licences provided for the import of the item on the date of the issue of the licences and since revalidation was made without any condition attached thereto, Mr. Habibullah Badsha, learned senior counsel submitted that the licences were valid since the letter of credit was opened during the currency of the first licence. In so far as the second licence is concerned, the letter of credit was opened during the grace period and hence, it connot be stated that there was any contravention of the provisions of the Imports and Exports Act. The further submission of the learned Counsel for the petitioner was that, unlike in the case of Mangla Brothers, cited supra, the revalidation has been done without any restriction and therefore, it is open to the petitioner to import goods in question. In short, the amendment made in the public notice cannot affect the vested rights of the petitioner over the licences issued prior to the public notice. Further, it is permissible for the petitioner to avail the grace period found in paragraph 209(3) of the Hand Book of the Imports and Exports Procedure, 1982-83. Since the revalidation has been done without any condition, the import of the goods cannot be said to be in violation of the law and the public notice 185/7 of the import policy of A.M. 1983 has no effect and it is not applicable to the petitioner, since the petitioner has time till 27.2.1983 and the petitioner imported the goods before the date. He, therefore, submitted that the order of the Appellate Tribunal holding that the import was in contravention of the Imports and Exports Act is not sustainable in law. Mr. Habibulla Badsha further submitted that the decision of the Supreme Court in the case of D. Rauichandra & Co. v. Union of India AIR 1987 S. C. 1794 and another decision of the Supreme Court in Union of India v. Godrej Soaps Pvt. Ltd. (1986) 4 SCC (260) AIR 1987 S.C. 175 are not applicable to the facts of this case. He submitted that in those cases, licence was issued on the basis of the orders of the Supreme Court in the year 1984, though in so far as the import policy of 1978-79 is concerned, goods in question were importable at the time of import. Subsequently, those goods became canalised items and when the licence was issued on the basis of the directions of the Supreme Court, the goods could not be imported on the date of issue of licence on O.G.L. basis. He, therefore, submitted that the law declared by the Supreme Court that the import policy prevailing at the time of import would govern the matter was made on the facts of the case as the licence was issued during the currency of the period 1985-86 A.M. and during that period the goods became canalised item, though the licence was granted for the period 1978-79. He, therefore, submitted that at the first sight, the decision of the Supreme Court would appear to be against the petitioner, but, on a careful consideration, the decisions of the Supreme Court have no application to the facts of the case. He also submitted that the decision of the Supreme Court in Darshan Oils Pvt. Ltd. v. Union of India 1995(1) SCC 345 has no application, because in that case, there was no licence issued, but the goods were imported on the basis of the import policy. He submitted that in the instant case licences were issued and on the basis of the licence goods were imported. He strongly placed reliance on a decision of this Court in Rex Trading Co. v. Union of India 86 E.L.T. 189 wherein a learned Judge has held that when there is conflict between the exercise of subordinate judicial legislature under Section 3 of the Imports and Exports Act and the public policy, the public policy has no legal effect in amending the OGL order. He also placed reliance on another decision of Bombay High Court in Dowsyl Polymers v. M.G. Abrol. Special Secretary 31 E.L.T. 895 wherein the Bombay High Court held that the import policy cannot stand in the way of clearance of goods imported on the basis of the licence. Therefore, learned senior counsel submitted that the import policy has no statutory force and is merely an intimation of the policy. He, therefore, submitted that under the licence, the petitioner has right to import the items of the goods mentioned in the said licence, and hence, the order of the Tribunal holding that there was a violation of the Imports and Exports Act is not sustainable in law.

10. Mr. V.T. Gopalan, learned senior counsel appearing for the respondents 1 and 2 submitted that the public policy issued has the force of law. He further submitted that the public notices were issued when there was change in the public policy and the change in the public policy should be given effect to. He referred to Section 3(1) of the Imports and Exports Act which empowers the Central Government to prohibit or restrict or control by an order in import and export of any specified case or class of goods. He also referred to Rule 3 of the Imports Order and submitted that no person shall import any good prescribed under Schedule-I except in accordance with the licence for the customs clearance granted by the Central Government or by any notified officer. He referred to a decision of the Supreme Court in the case of Glass Chalons Importers & Users Association v. Union of India 1962(1) S.C.R. 862. The canalisation of Import is in the interest of general public and a policy as regards import forms a integral part of the general economic policy of the country. It is not only for the improvement of international trade of the country, but also on monetary benefit, development of agriculture and industry and even on the political policy of the country. He, therefore, submitted that the policy of the Government is that the import of Amoxycillin Trihydrate should be canalised. It is based on Section 3 of the Imports and Exports Act. He referred to the import policy of 1982 A.M. and submitted that Amoxycillin Trihydrate was included as item No. 2 in Appendix IX and as a canalised item it is not permissible for the petitioner to import the same under Open General Licence. He particularly referred to the Import Policy of 1981-82 and referred to Clause 173 found in Chapter 18 relating to the export house and he referred to Clause 182 which refers to the period of validity of the certificate. He also referred to Clause 183(5) and (7) of the Import Policy 1981-82 A.M. He referred to Clause 184(3) of the same policy and submitted that the import of O.G.L. item by export house shall be subject to the condition that the shipment of the goods should take place within the validity of the open general licence i.e. on 31.3.1982 or within the valid period of the import licence (without grace period) whichever is earlier. He submitted that the restriction would apply to the licence issued before 1.4.1981 in respect of items classified under O.G.L. in 1981-82 policy. He also drew my attention to Clause 186 and particularly Clause 186(7) of the Import policy 1981-82 A.M. and submitted that the additional licence would also be valid for import of raw materials, components, consumables and spares which have been placed under open general licence or actual licence. He referred to the transitory provision found in Chapter XXI and referred to Clause 222(3) of the Import Policy 1981-82 and submitted that R.E.P. licence and additional licence held by export house will cease to be valid for import of any item which could be imported under open general licence during 1980-81. So, In the import policy, 1981-82 for firm commitment, to be made for opening of irrevocable letters of credit should be made to the authorised dealers to foreign exchange before 1.4.1981. He also referred to Clause 222(4) which deals with additional licence. He also drew my attention to the relevant clauses of the import policy, 1982-83 A.M. which are in pari materia with the clauses found in import policy 1981-82 A.M. He referred to the additional licence found in page 10 of the type set and submitted that licences have been granted without prejudice to the application of any other prohibition or regulation affecting import of certain goods which may be in force at the time of their arrival. He, therefore, referred to the export house certificate and the certificate which is subject to the some amendment in the policy that has been made from time to time. He referred to Clause 182 of the Import and Export policy 1981-82. He referred to the public notice No. 11/I.T.C. (P.N. 82) Dated 25.2.1982 and submitted that export was also subject to the condition that the shipment of the goods should take place within the validity of the open general licence i.e. 31.3.1982 or within the valid period of the licence, without any grace period, whichever is earlier. He, therefore, submitted that Amoxycillin Trihydrate became canalised on 16.10.1981 and it is not permissible for the petitioner to import the same on the basis of the licence issued earlier. He strongly placed reliance on a decision of the Supreme Court in the case of Union of India v. Godrej Soaps Pvt. Ltd. AIR 1987 S.C. 175 and another decision of the Supreme Court in Indo Afghan Chambers of Commerce v. Union of India AIR 1986 S.C. 1567 and submitted that the petitioner was not entitled to import under the import policy, 1982-83 though the said goods were importable under the import policy 1981-82. Since the petitioner has failed to fulfil the tests laid down by the Supreme Court, the import was not in accordance with law. He also placed reliance on a decision of the Supreme Court in Darshan oils Pvt. Ltd. v. Union of India 1995(1) S.C.C. 345 and submitted that the entitlement to import is governed by the import policy prevailing at the time of import. He further submitted that there is no question of promissory estoppel in this case and for that proposition, he relied upon decisions of the Supreme Court in Kasinka Trading v. Union of India 1995(1) S.C.C. 274 and in the case of S.B. International Ltd. v. Assistant Director. General of F.T. 1996(2) SCC 439. He also referred to a decision of the Supreme Court in the case of P.T.R. Exports (Madras) Pvt. Ltd. v. Union of India (1996) 86 E.L.T. 3(SC) and submitted that it is open to the Government to revise its policy and the question of the application of doctrine of legitimate expcetation does not apply. He submitted that the licence cannot be independent of the policy and in the year 1981 when the goods became canalised, it is not permissible for the petitioner to import the same. He also referred to the public notice found at pages 7 and 8 of the typed set and the order of the Collector found at page 59 and submitted that the Collector of Customs was wrong in condoning the delay in opening the letters of credit and he has no power to condone the delay. Under para 183 of the import policy 1981-82, import of O.G.L. items should be done prior to 31.3.1982 or before the expiry of the validity of the licence without any grace period whichever is earlier. He further submitted that the public notice has prescribed time and the petitioner imported the drug long after the cut off date i.e. 31.3.1982 and hence, the import has to be held in contravention of import regulations.