Case: Union Of India  Vs. Jain Shudh Vanaspati Ltd.

ny imported 13, 500 MT of RBD Palm Oil under Open General Licence from Singapore between November 1978 and March 1979. The foreign supplied the goods in stainless steel containers, and same were allowed to be cleared under Section 47 of the Customs Act. Subsequently, anotice under Section 28 of the Customs Act was issued by the Assistant Collector, Bombay to theon the ground that the stainless steel drums were subject to levy of custom duty. Thesubmitted reply to the notice. Anothernotice was issued to theon June 21, 1980 by the Collector, Bombay under Section 124 of the Customs Act calling upon them to explain why the stainless steel drums should not be confiscated as the import of stainless steel was prohibited. In its reply theasserted that it had not imported any stainless steel instead the refined oil was supplied by the foreign suppliers in stainless steel containers in accordance with the internationally accepted trade practice. It further stated that the packing material was not subject to any separate duty. Thefiled a writ petition in the High Court challenging the validity of thenotices. The High Court quashed thenotices on the finding that the normal international practice was to import edible oil in stainless steel containers, therefore, respondent did not violate any conditions of exemption of contain in the Notification dated August 2, 1976 or the Import Control Trade Order, 1955. The respondent Company was not liable to pay any duty on the steel containers creating a same as a separate item. The High Court further held that since the goods had been cleared under Section 47 of the Customs Act, the order of the competent authority clearing the goods could not be disturbed unless there was fraud or deliberate suppression. Since there was no fraud or deliberate suppression, the notices issued under Section 28 or 124 of the Customs Act where contrary to law and were liable to be quashed

Court's reasoning:
3. After hearing learned counsel for the parties and having regard to the facts and circumstances of the case and also on the perusal of the material on record, we agree with the findings recorded by the High Court that the import of the edible oil by thein Stainless Steel containers was in accordance with the international marketing practice. There was no short levy of duty as thewas not liable to pay any separate duty on the containers, and duty had already paid on the import of the RBD Palm Oil. We further agree with the High Courts view that the containers are not liable to be confiscated under Sections 111(d), (m) of the Customs Act, 1962 therefore,notice issued under Section 124 of the Customs Act is illegal and the same have rightly been quashed4. So far as the interpretation of Sections 28 and 47 of the Customs Act is concerned we do not consider it necessary to express any opinion on the finding recorded by the High Court and we leave the question open