Case: Oswal Woollen Mills Ltd. &amp; Anr Vs. Union Of India &amp; Ors

the licence may, therefore, be transferred in the name of the first petitioner and an endorsement may be made on it to make it valid for import of the items permitted under paragraph 138 with the Actual User and non-transferable conditions. This request was rejected by the third respondent by his letter dated 15-10-1981 on the grounds that the (REP) Licence in question was issued to the licensee against the export of his own products, i.e. for which the licensee was registered as a manufacturer-exporter as per the relevant registration-cum-membership certificate held by him. There is no dispute about these facts.14. The petitioners contention is that the first petitioner is entitled to import the raw materials, components, consumables and packing materials required by it for use in its own factories in terms of paragraph 138(1) of the Import Policy, 1981-82 as the transferee of the (REP) Licence permitted by paragraph 140 of the Import Policy, 1981-82 notwithstanding the fact that the first petitioner is not the manufacturer-exporter against whose exports the (REP) Licence in question was issued but a Trading House who got the said licence transferred by the letter dated 8-7-1981 as per paragraph 195(4)(ii) of the Import Policy, 1981-82. The respondents contention is that as the first petitioner is not the manufacturer-exporter to whom the (REP) Licence was issued against his export it is not entitled to Import the raw materials etc. mentioned in the first petitioners letter dated 23-9-1981 under paragraph 138(1) of the Import Policy, 1981-82. The question is which of these contentions is correct.15. Paragraph 140 clearly states that (REP) Licence will be issued in the name of the Registered Exporter only and will not be subject to Actual User condition and that except for cases covered by paragraphs 136(2), 185(2) and 186(1) the licence holder may transfer the licence in full or in part in favour of any other person and that the licence holder of such transferee may import the goods permitted therein but the facility of paragraphs 136, 137 and 146 shall not be available to any transferee unless the transferee is himself a Registered Exporter and can satisfy the Customs Authorities at the time of clearance of the goods of his bona fides. The goods sought to be imported by the first petitioner on the basis of the (REP) Licence in question do not fall under paragraphs 136(2), 137, 146, 185(2) and 186(1) mentioned in paragraph 140 of the Import Policy, 1981-82. Paragraph 195(4)(ii) grants to Trading Houses like the first petitioner the facilities under Import Policy, viz. the import replenishment (REP) Licences transferred to them by others. Thus the first petitioner is entitled under paragraphs 140 and 195(4)(ii) to the facility of the Import Policy as a transferee of the (REP) Licence issued in the name of the actual manufacturer-exporter against exports made by that manufacturer-exporter. The contention of the respondents that under paragraph 138(1) the facility to import raw materials etc. under the (REP) Licence is available only to the actual manufacturer-exporter against whose exports the (REP) Licence was issued amounts to reading into paragraph 138(1) the words "against the exports of products manufactured by them" after the words "manufacturer-exporters" and before the words "will be valid ....." That is what is sought to be done by the impugned Circular dated 31-8-1981. The present contention of the respondents is that the Circular dated 31-8-1981 only clarifies paragraph 138(1) of the Import Policy, 1981-82 and does not amend or modify that paragraph. That is not how the learned Judges of the High Court have understood the Circular in their judgment under appeal. The learned Judges have stated in their judgment that the Circular dated 31-8-1981 appears to change the Import Policy and that the contention of the petitioners before them that the condition mentioned in the impugned order dated 15-10-1981 is not found in paragraph 138 of the Import Policy, 1981-82 is not acceptable to them. The learned Judges were right in saying that the Circular appears to change the Import Policy but they have erred in saying that the condition mentioned in the impugned order dated 15-10-1981 is found in paragraph 138(1) of the Import Policy, 1981-82. We are unable to find any such condition in paragraph 138(1) of the Import Policy, 1981-82. It is significant to note that paragraph 138(1) was not mentioned in paragraph 140 of the Import Policy, 1981-82. It is also significant to note that in the Import Policy for the subsequent year 1982-83 the said words "against their exports of products manufactured by them" have been actually inserted in paragraph 138(1) after the words "REP Licences issued to manufacturer-exporter" and before the words "will be valid within the overall value for import of any items of raw materials, components, consumables, spares and packing materials required by them for use in their factories subject to Actual User condition". In view of the respondents contention that the Circular dated 31-8-1981 is only clarificatory of paragraph 138(1) of the Import Policy, 1981-82 and does not amend or modify that paragraph it is unnecessary for us to go into the question whether the Circular issued by the Joint Chief Controller of Imports and Export can validly amend the Import Policy, 1981-82. On a perusal of the relevant paragraphs of the Imports Policy, 1981-82 mentioned above we agree with Mr. Soli J. Sorabjee, Senior Advocate for the appellants that the condition mentioned in the third respondents impugned letter dated 15-10-1981 is not there in paragraph 138(1) of the Import Policy, 1981-82 and that the Circular dated 31-8-1981 is invalid and that the rejection of the petitioners request made in the letter dated 23-9-1981 by the third respondent in the letter dated 15-10-1981 is unwarranted, and the request should have been complied with. We are unable to agree with Mr. M. M. Abdul Khadir, Senior Advocate for the respondents that the condition mentioned in the letter dated 15-10-1981 is to be found in paragraph 138(1) of the Import Policy, 1981-82.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]15. Paragraph 140 clearly states that (REP) Licence will be issued in the name of the Registered Exporter only and will not be subject to Actual User condition and that except for cases covered by paragraphs 136(2), 185(2) and 186(1) the licence holder may transfer the licence in full or in part in favour of any other person and that the licence holder of such transferee may import the goods permitted therein but the facility of paragraphs 136, 137 and 146 shall not be available to any transferee unless the transferee is himself a Registered Exporter and can satisfy the Customs Authorities at the time of clearance of the goods of his bona fides. The goods sought to be imported by the first petitioner on the basis of the (REP) Licence in question do not fall under paragraphs 136(2), 137, 146, 185(2) and 186(1) mentioned in paragraph 140 of the Import Policy, 1981-82. Paragraph 195(4)(ii) grants to Trading Houses like the first petitioner the facilities under Import Policy, viz. the import replenishment (REP) Licences transferred to them by others. Thus the first petitioner is entitled under paragraphs 140 and 195(4)(ii) to the facility of the Import Policy as a transferee of the (REP) Licence issued in the name of the actual manufacturer-exporter against exports made by that manufacturer-exporter. The contention of the respondents that under paragraph 138(1) the facility to import raw materials etc. under the (REP) Licence is available only to the actual manufacturer-exporter against whose exports the (REP) Licence was issued amounts to reading into paragraph 138(1) the words "against the exports of products manufactured by them" after the words "manufacturer-exporters" and before the words "will be valid ....." That is what is sought to be done by the impugned Circular dated 31-8-1981. The present contention of the respondents is that the Circular dated 31-8-1981 only clarifies paragraph 138(1) of the Import Policy, 1981-82 and does not amend or modify that paragraph. That is not how the learned Judges of the High Court have understood the Circular in their judgment under appeal. The learned Judges have stated in their judgment that the Circular dated 31-8-1981 appears to change the Import Policy and that the contention of the petitioners before them that the condition mentioned in the impugned order dated 15-10-1981 is not found in paragraph 138 of the Import Policy, 1981-82 is not acceptable to them. The learned Judges were right in saying that the Circular appears to change the Import Policy but they have erred in saying that the condition mentioned in the impugned order dated 15-10-1981 is found in paragraph 138(1) of the Import Policy, 1981-82. We are unable to find any such condition in paragraph 138(1) of the Import Policy, 1981-82. It is significant to note that paragraph 138(1) was not mentioned in paragraph 140 of the Import Policy, 1981-82. It is also significant to note that in the Import Policy for the subsequent year 1982-83 the said words "against their exports of products manufactured by them" have been actually inserted in paragraph 138(1) after the words "REP Licences issued to manufacturer-exporter" and before the words "will be valid within the overall value for import of any items of raw materials, components, consumables, spares and packing materials required by them for use in their factories subject to Actual User condition". In view of the respondents contention that the Circular dated 31-8-1981 is only clarificatory of paragraph 138(1) of the Import Policy, 1981-82 and does not amend or modify that paragraph it is unnecessary for us to go into the question whether the Circular issued by the Joint Chief Controller of Imports and Export can validly amend the Import Policy, 1981-82. On a perusal of the relevant paragraphs of the Imports Policy, 1981-82 mentioned above we agree with Mr. Soli J. Sorabjee, Senior Advocate for the appellants that the condition mentioned in the third respondents impugned letter dated 15-10-1981 is not there in paragraph 138(1) of the Import Policy, 1981-82 and that the Circular dated 31-8-1981 is invalid and that the rejection of the petitioners request made in the letter dated 23-9-1981 by the third respondent in the letter dated 15-10-1981 is unwarranted, and the request should have been complied with. We are unable to agree with Mr. M. M. Abdul Khadir, Senior Advocate for the respondents that the condition mentioned in the letter dated 15-10-1981 is to be found in paragraph 138(1) of the Import Policy, 1981-82.