Case Note & Summary
The dispute arose from the refusal of Customs authorities to clear palm kernel fatty acid imported by M/s Godrej Soaps Pvt. Ltd. under an additional licence. The respondents purchased the goods on high seas from a firm that had imported them based on a licence issued following a Supreme Court order. The Customs authorities contended that the goods were canalised items, which could not be imported under additional licences. The respondents challenged this in the Bombay High Court, which allowed the clearance. The Union of India appealed, arguing that the High Court's decision contradicted previous Supreme Court rulings. The Supreme Court analyzed the Import Policy 1985-88, clarifying that canalised items could only be imported through public sector agencies unless explicitly permitted otherwise. The court concluded that the palm kernel fatty acid was a canalised item and could not be imported under the additional licence. The court also noted that the respondents were aware of the legal position when they purchased the goods. Ultimately, the Supreme Court allowed the appeal, set aside the High Court's order, and ruled in favor of the Union of India.
Headnote
A) Import Policy - Canalised Items - Interpretation of Import Policy regarding canalised items - Import Policy 1985-88, Appendix 5, Item 9 - The court held that canalised items could not be imported under additional licences as per the Import Policy 1985-88, and the respondents were not entitled to import palm kernel fatty acid, which was a canalised item. The court emphasized that the importation of such items directly by holders of additional licences is banned (Paras 779-780).
Issue of Consideration
Whether the respondents were entitled to import palm kernel fatty acid under additional licences despite it being a canalised item.
Final Decision
The Supreme Court allowed the appeal of the Union of India, set aside the High Court's order, and ruled that the respondents could not import palm kernel fatty acid under additional licences as it was a canalised item.
Law Points
- Import Policy interpretation
- canalised items
- additional licences
- Export House Certificates
- actual user status
