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PETITIONER: M.J. EXPORTS LTD. AND ANR.

       Vs.

RESPONDENT: CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATETRIBUNAL, BOMBAY

DATE OF JUDGMENT14/05/1992

BENCH: RANGNATHAN, S. BENCH: RANGNATHAN, S. RAMASWAMI, V. (J) II YOGESHWAR DAYAL (J)

CITATION:  1992 AIR 2014            1992 SCR  (3) 300  1993 SCC  Supl.  (1) 169 JT 1992 (3)   398  1992 SCALE  (1)1145

ACT:      Customs  Act, 1962:Sections 2(33), 25, 45, 51, 53,  54, 59, 68, 69, 74, 113(d) & 114.      Import-Export  Policy  1988-91: Paras  22,  23,  24(1), 174(1)-Appendix 6-List 2, Item 36-List 3, Item 37.      Import  (Control)  Order, 1955: Clauses 10  (C),  11(1) (d), 11(4)-Schedules I,II,III & V.      Exports (Control) Order, 1988: Clause 3, 15 (g).      Bill of Entry (Forms) Regulations, 1976: Regulation  3- Forms I,II and III      "Haemodialyser"-Life  Savings Equipment-Exemption  from Customs  duty-Import  under  Open  General   Licence-Customs Clearance obtained for "Home Consumption"-Goods repacked and exported-Confiscation and penalty Order-Validity of-Held the export of goods was impliedly barred under the conditions of Open General Licence-Goods exported were "Prohibited goods"- Confiscation and penalty order held justified.      Interpretation   of   statues-Provisions   should    be construed harmoniously making it meaningful in the context.      Practice  and Procedure-Raising a fresh plea  involving investigation of facts at the appellate stage-Permissibility of.      Words & Phrases :      "Home consumption"-"Stock and sale"-Meaning of.

HEADNOTE:      The  Imports  (Control) Order, 1955 provides  that  the items of goods                                                        301 set  out in Schedule 1 to the said order cannot be  imported except under a Licence or Customs clearance permit.   Clause 11(4) of the Order, however, empowers the Central Government to issue an Open General Licence (OGL) permitting the import of such goods subject to the conditions specified.  Appendix 6 to the Import-Export Policy 1988-91 deals with  categories of goods that can be imported under an Open General  Licence and lists out the Categories of importers, the items allowed to  be  imported by them and the conditions  governing  such importation.   Item 36 of this Appendix permits the  import, under OGL, "by all persons" of Life-saving equipment as  per

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List  2  of  the Appendix and their spares.   List  2  which contains  the  List  of life saving  equipment  allowed  for import under OGL includes, as item no. 27,  "Haemafiltration instrument/haemo-dialysers  and accessories/spares  thereof. By  a Notification issued by the Government of  India  under Section  25 of the Customs Act, 1962 the Haemodialysers  and accessories,   thereof   were  exempted  from   duty.    The Haemodialysers are, however, not included in Schedules I and III of the Exports (Control) Order, 1988, clause 3 of  which prohibits  or  restricts  the  exports  of  items  of  goods specified in the two schedules.      The  appellant, a recognised trading house carrying  on business  as  Exporters, imported Haemodialysers  from  West Germany  under Open General Licence and obtained the  import clearance  of  goods  from Bombay Customs  House  for  "Home consumption"  free  of duty by relying on  the  notification granting  exemption from custom duty.  After  clearance  the goods were taken to Ankleshwar factory at Gujarat where they were  re-packed and presented to kandala port for export  to U.S.S.R.   The  custom authorities detained  the  goods  for examination  because it was of the opinion the re-export  of goods   imported   under  Open  General  Licence   was   not permissible  except with specific approval of  Import-Export authorities.  During the pendency of the proceedings  before the  Collector,  the  appellant  obtained  a  No   Objection Certificate  of  the  Reserve Bank of India  for  export  on "humanitarian  grounds" that the goods were needed  for  the help of the victims of the Armenian Earthquake in Russia and consequently the goods were exported.      The   Customs   authorities,   with   the   appellant’s concurrence,  made  a reference to the Chief  Controller  of Imports  and  Exports under para 24.1 of  the  Import-Export policy  who  clarified that the imports under  the  OGL  and certain  other licences were entirely meant for  use  within the country                                                      302 and therefore cannot be allowed for re-exports as such.      By its order dated 22.10.1990 the Collector of  Customs held  that the goods exported were liable  to   confiscation under  section  113(d)  of the Customs  Act  and  imposed  a penalty  of  Rs.50 lakhs under section  114.   However,  the Collector  held that the goods imported were not  liable  to import  duty.  The appellant preferred an appeal before  the Central  Excise & Gold Control Appellate Tribunal which  was dismissed.      In  appeal to this Court it was contended on behalf  of the appellant that: (1) The confiscation or the penalty  can be  justified  only if the goods fall under  description  in section  113(d)  of  the Customs  Act.   The  appellant  was entitled, as a matter of right, to export the goods  because the  goods  were not included in Schedule I or  III  to  the Export Control Order nor was the export of goods  prohibited by  or under any other law for the time being in force;  (2) Appendix  6  of  the Import and  Export  Policy  imposes  no specific conditions that the Life Saving equipment should be used in India and should not be exported.  The words  ’stock and  sale’  are very wide and there is no  justification  to restrict them to mean only sales within the country; and (3) The  exports  were  made in pursuance of  the  mutual  trade agreement   between   Government  of  India   and   U.S.S.R. considered beneficial to both countries and that this should be considered sufficient to justify the export.      On  behalf of the Revenue, it was contended  that:  (1) Under  the provisions of the Customs Act clearance of  goods can only be for "home consumption" or "warehousing" and  the

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import  of  goods  just for the purpose  of  export  is  not permitted  under the Act.  The appellant cleared  the  goods for  home  consumption and so they were to  be  utilised  in India  and it was not permissible to export the  goods;  (2) Under  the  Terms  of the Open  General  Licence  the  goods imported  were to be used in India and not to  be  exported. Permitting  export  would defeat the intent of  placing  the goods  under  O.G.L.  because  the  duty  free  import   was permitted  so that life saving equipment and  medicines  are available for use in the country and not to enable a private party  to make profit by their export; and (3) The goods  in question were "prohibited goods" under section 2(33) of  the Customs  Act.   Therefore,  the imposition  of  penalty  was justified.      Dismissing the appeal, this Court,                                                        303      HELD:  1. The Customs Act does not prohibit the  export of imported goods.  There are provisions which indicate that export  of imported goods is very much envisaged  under  the statute.  The  provisions  contained  in  section  74  fully reinforce  this  view.   Para 174(1) of  the  Import  Export Policy 1988-91 also impliedly recognises that imported goods can be re-exported. [315 E, 317 B-D]      2.  The  goods imported into India have to  be  cleared from  the customs area for home consumption  or  warehousing and this is done by presenting a bill of entry under section 46.   The terms of this section read with Regulation  3  and Forms  I,  II or III appended to the Bill of  Entry  (Forms) Regulations, 1976, make it clear that there are three  forms of the bill of entry: for home-consumption, for  warehousing and  for  ex-Bond  clearance  for  home  consumption.    The presentation  of a bill of entry for home  consumption  only means  that  the importer does not intend to  warehouse  the goods.   The form of the Bill of Entry prescribed under  the Act does not require any declaration from the importer as to the  purpose  for which the imported goods are  required  or that they will be used or sold only in India. [314 C-D,  315 A-B]      3.  The expression ’home consumption’ has also, in  the context,  no clear or definite meaning and raises a  lot  of conundrums  if literally interpreted to mean  that  imported goods   should   always   be   consumed   in   India.    The uncertainities  in the connotation of the  expression  ’home consumption’  preclude one from giving an interpretation  to this  expression  that the imported goods cannot be  at  all exported and incline one to hold that, in the context, it is only  used in contrast to the expression ’for  warehousing’. [315 B-D]      4.  The Customs Act provides that that goods which  are cleared from the customs area for warehousing can be cleared from the warehouse for home consumption under section 68  or for exportation under section 69.  The suggestion that if an importer  intends  to export the imported goods,  he  should clear  them  for warehousing and then proceed  in  terms  of section  69 cannot be accepted because that would mean  that imported goods can be re-exported after being warehoused for some  time even a day or a few hours - but that they  cannot be  exported otherwise.  Therefore, it would not be  correct to insist that an importer must clear goods for  warehousing and  then  export  them  by  clearing  from  the  warehouse. Whether  to  deposit the goods in a warehouse or not  is  an option given to the importer. [315 E-F, 316 E, 316A]                                                        304      4.1.  There is nothing in the provisions of the Act  to compel an importer even before or when importing the  goods,

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to make up his mind whether he is going to use or sell  them in  India or whether he proposes to re-export them.   Again, there  may be cases where he has imported the goods for  use or  sale  in India but subsequently receives  an  attractive offer  which necessitates an export.  It would  make  export trade  difficult  to say that he cannot  accept  the  export offer as the goods, when imported, had been cleared for home consumption.  Section 69, therefore, should be only read  as a provision setting out the procedure for  export  of  ware- housed goods and not as a provision which makes  warehousing an  imperative  pre-con-dition for  exporting  the  imported goods. [316 C-E]      5.  Clause 15(g) of the Export (Control)  Orders,  1988 cannot be interpreted to mean that imported goods cannot  be exported  unless  they are cleared, at the time  of  import, under a bond for re- export. [324 E]      6.  It will not be correct to say that since the  goods do not fall under clause 11(i) (d) of the  Import  (Control) Order,  1955, their export was not permitted.  To  say  that goods  bonded  for  re-export will not be  affected  by  the provisions  of  the order does not mean that goods,  not  so bonded,  cannot  be exported at all.  Their  export  can  be interdicted only if there is some other express or  implicit prohibition  in  clause  3 of the Export  Control  Order  or otherwise. [324 H, 325 A-B]      7.  Prima  facie  the words "stock and  sale"  may  be, generally speaking, wide enough to comprehends sales  inside as  well as outside the country and that their scope  should not be restricted unless such a restriction can be read into the  terms of the OGL itself.  Whatever may be the  position in  regard to the other lists in Appendix 6 to  the  Import- Export Policy, 1988-91 the items of goods enumerated in list no.2 that Appendix stand in a class of their own.  There  is sufficient  indication in the heading given to the  List  to show that the import of these items into India is  permitted only because such life-saving equipment is required for  use in the country.  The use of the words "stock and sale" shows only  that  the  items  are not restricted  to  use  by  the importer  but can be transferred by him to another.  But  it is  not  proper to read them as permitting a sale  of  goods outside the country.  Note (44) in Appendix 6 also carries a mild indication that the equipment permitted to be  imported is only for the purposes of use in the country. [320 B-F]      Janak   Photo   Enterprises  (1990)  49   E.L.T.   339, distinguished.                                                        305      7.1. Although there is no express prohibition, the  re- export  as  such of items of goods specified in  list  2  of Appendix 6 to Import-Export Policy 1988-91 and imported into India is prohibited by necessary implication by the language of, and the scheme underlying, the grant of OGL in regard to them.   It  is  difficult to agree  that  the  import-export policy  envisages the re-export of goods belonging  to  this category.   The  opinion  of the CCIE is also  to  the  same effect. [321 B]      7.2. The appellant had obtained the import of the goods free  of  duty  by  relying  on  the  notification  granting exemption  from customs duty.  It is obvious that  it  could not  have  been the intention of the  legislature  to  grant exemption from customs duty in respect of vital goods of the nature in question in order that an importer may make profit by  selling  them abroad.  The notification  is,  therefore, relevant for the issue before us to the limited extent  that it lends supports to the construction of List 2 of  Appendix 6. [322 F-H]

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    8.   The  Court  should  construe  a  provision  in   a harmonious  way to make it meaningful having regard  to  the context in which it appears.  In this case the language used is  being interpreted for giving content and meaning to  the classification  and  heading used in  the  order  permitting imports  under  OGL in certain cases in the context  of  the provisions of the Imports and Exports Control Act, 1947,  as well as the orders and notifications issued thereunder. [322 C-D]      Hansraj Gordhandas v. H.H. Dave, Assistant Collector of Central  Excise  &  Customs,  Surat &  Two  Ors.,  [1969]  2 S.C.R.253;  State  of  M.P. v. G.S. Dall  and  Flour  Mills, (1991)  187 I.T.R. 478 S.C.; Union of India & Anr. v.  Deoki Nandan  Aggarwal, (1991) 3 J.T.(S.C.) 608 and  Surjit  Singh Kalra v. Union of India, [1991] 2 S.C.C. 87, referred to.      9.  Clause 10-C of the Imports (Control) Order  enables the  authorities to interfere in any individual  case  where they  find  that  the purpose of the  import  is  not  being achieved.   It does not impose an obligation on an  importer to seek the directions or the permission of the CCIE  before exporting the goods if otherwise permissible.  While  clause 11(4)  of  the  order makes clause 10 C  applicable  to  the subject  imports, it releases them from the  application  of the  other  restrictions and conditions on  imposed  by  the Import Control Order. [325 G-H, 326 A-B]                                                        306      However, clause 10 C is of some indirect assistance  in the  present  case.  The CCIE’s opinion on  the  Import  and Export Control order is final and binding.  In view of this, when the CCIE came to know that the appellant was seeking to export  the  goods,  he could  have  intervened  and  issued directions under clause 10 C either permitting the export of the  goods to the U.S.S.R. or directing them to be  sold  to needy  hospitals  or other parties in India. He  could  have effectively  stopped  the export of the goods.   This  shows that  the export of the goods is not free  or  unrestricted. [326 C-E]      10.  Since the goods imported were intended for use  in India  the  circumstance that the appellants  secured  a  no objection certificate of the RBI for export "on humanitarian grounds" is of no assistance. [323 E-F]      11. The mere fact that mutual trade was allowed between the  two countries is not enough to hold that even goods  of this  type  - which had been allowed to be imported  with  a specific  end  in view - could be exported.  The  export  of such goods may also enure to the benefit of India indirectly but,  in the absence of anything to show that the  goods  in question   constituted  one  of  the  categories  of   goods specifically envisaged by the mutual trade agreement, it  is not  possible  to override the prohibition implicit  in  the Import regulations. [324 A-B]      12.  The  goods  in question  were  "prohibited"  goods within  the meaning of S.2(33) and their confiscation  under S.113(d)  and the penalty under section 114 of  the  Customs Act were fully justified. [322 E]

JUDGMENT:      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4105 of 1991.      From  the  Judgment and Order dated  14.6.1991  of  the Custom,  Excise & Gold (Control) Appellate Tribunal,  Bombay in C-598/90-BOM.      R.K.  Habbu,  B.R. Agrawala, Dr.  Sumant  Bhardwaj  and

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Sunil Goyal for the Appellants.      A.K. Ganguli, A. Subba Rao and P. Parmeshwaran for  the Respondents.      The Judgment of the Court was delivered by      RANGANATHAN, J. Import Trade Control was introduced  in India                                                        307 as  a  war-time measure in the early stages  of  the  Second World War, initially by a notification issued in exercise of the powers conferred under the Defence of India rules.   The primary  object of the notification was to conserve  foreign exchange  resources and restrict physical imports so  as  to reduce the pressure on the limited available shipping space. To  start  with, the import of only 68  commodities,  mainly consumer  items, were brought under control.   Subsequently, as  foreign exchange resources came under  pressure,  import control was extended to cover other commodities as well.      Soon  after  the second world war came to an  and,  the control of imports and exports was statutorily provided for. The  Imports  and Exports (Control) Act, 1947 (18  of  1947) came into force with effect from 25th March, 1947, initially for  a period of three years and was extended from  time  to time.  The Act was substantially amended by the imports  and Exports (Control) Amendment Act, 1976.  Section 3 of the Act is relevant for our present purposes.  It reads:           "3.  Powers  to prohibit or restrict  imports  and          exports - (1) The Central Government may, by  order          published in the Official Gazette, make  provisions          for    prohibiting,   restricting   or    otherwise          controlling,  in all cases or in specified  classes          of cases and subject to such exceptions, if any, as          may be made by or under the order:-          (a)  the  import,  export  carriage  coastwise   or          shipment as ships stores of goods of any  specified          description;          (b) the bringing into any port or place in India of          goods  of any specified description intended to  be          taken  out of India without being removed from  the          ship or conveyance in which they are being carried.          (2) All goods to which any order under  sub-section          (1)  applies shall be deemed to be goods  of  which          the  import  or export has  been  prohibited  under          section  11 of the Customs Act, 1962 (52 of  1962),          and  all  the  provisions of that  Act  shall  have          effect accordingly.          (3)  notwithstanding  anything  contained  in   the          aforesaid Act, the Central Government may, by order          published in the Official                                                        308          Gazette prohibit, restrict or impose conditions  on          the  clearance whether for home consumption or  for          shipment  abroad  of any goods or  class  of  goods          imported into India.      Several  notifications  were issued under  s.3  of  the above  Act  from  time  to time setting  out  the  lists  of controlled  items.  At the relevant time with which  we  are concerned,  the  notification  governing  imports  was   the Imports  (Control) Order, 1955 as amended from time to  time and  the  one governing exports was  the  Exports  (Control) Order, 1988 which came into force on 30th March, 1988.   The broad scheme of the Imports Control Order is that the  items of  goods set out in Schedule I to the said order cannot  be imported except under a licence or customs clearance  permit issued  in  terms of Schedules II, III and V to  the  order. Clause 11(4) of the Order, however, also envisages the issue

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of an Open General Licence or Special General Licence by the Central  Government permitting the import of such  goods  by such  persons  and  subject to such  conditions  as  may  be specified.   Clause 3 of the Exports Control Order  likewise imposes  restrictions  on exports from the  country  in  the following terms:          "3.  Restrictions on export of certain goods -  (1)          Save as otherwise provided in this Order no  person          shall export any goods of the description specified          in Schedule I, except under and in accordance  with          a  licence granted by the Central Government or  by          an officer specified in Schedule II.          (2)  Notwithstanding  anything  contained  in  sub-          clause  (1) goods specified in Schedule III may  be          exported on fulfilment of the terms and  conditions          specified therein.          (3)  If in any case, it is found, that  the  value,          specification, quality and description of the goods          to  be  exported  are not in  conformity  with  the          declaration  of the exporter in those  respects  or          the quality and specification of such goods are not          in   accordance  with  the  terms  of  the   export          contract, the export of such goods shall be  deemed          to be prohibited."      The  Government  of India  periodically  announces  its import-export policy which remains in force for a  specified period  subject  to  such  changes  or  amendments  as   the Government  may make from time to time.   The  Import-Export Policy of the Government for the period 1988-1991                                                        309 (hereinafter  referred to as ’the policy’) is the  one  with which we are concerned.  Appendix 6 to the policy deals with the  categories of goods that can be imported under an  Open General  Licence  (OGL)  and lists  out  the  categories  of importers,  the items allowed to be imported by  them  under OGL and the conditions governing such importation.  Item  36 of  this  Appendix permits the import, under  OGL,  "by  all persons"  of  "Life-saving equipment as per List  2  of  the Appendix  and  their spares".  Item 37 permits  the  import, under OGL, "by all persons" of "finished drug  preparations, life  saving  and anti-cancer drugs as per List  3  of  this Appendix".List  2  which contains the "List of  life  saving equipment  allowed for import under OGL" includes,  as  item no.  27,  "Haemafiltration  instrument/Haemo-dialysers   and accessories/spares thereof".      A  notification  was also issued by the  Government  of India  under  s.25  of the Customs  Act,  1962  (hereinafter referred  to as ’the Act’).  This notification, as it  stood at the relevant time, was in these terms:          "In exercise of the powers conferred by sub-section          (1)  of Section 25 of the Customs Act, 1962 (52  of          1962),  and in supersession of the notification  of          the  Government  of  India  in  the  Department  of          Revenue  and Banking No.182-Customs, dated the  2nd          August,   1976,  the  Central   Government,   being          satisfied  that  it  is  necessary  in  the  public          interest  so to do, hereby exempts goods  specified          in  the Schedule annexed hereto when imported  into          India  from  (i) the whole of the duty  of  customs          leviable  thereon under the First Schedule  to  the          Customs Tariff Act, 1975 (51 of 1975); and          (ii)  the  whole of the  additional  duty  leviable          thereon under Section 3 of the Customs Tariff  Act,          1975 (51 of 1975).      The  Schedule annexed was in three parts.  Part  A  set

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out  a  list of life-saving drugs or medicines,  item  8  in which   is  "Haemodyalisers  and   accessories/spare   parts thereof".   Part B gave a list of "life-saving  equipments". Part  C enabled the exemption to be availed of even in  case of  other  "life-saving drugs, medicine  or  equipment"  not specified in Parts A and B if the Director General of Health Services  certified  that  the goods fell  under  the  above category and recommended exemption from customs duty.      The  Import Policy read with the  Customs  notification made it pos-                                                        310 sible  for any person to import, inter alia,  haemodialysers free of import duty.  This is what may be called the import- side of the picture we have to consider.      Now,  we  turn to the export angle.   We  have  already referred  to clause 3 of the Exports (Control) Order,  1988. It prohibits or restricts the exports of the items of  goods specified  in  Schedules I and III thereto.   It  is  common ground  that  Haemodialyers do not figure in either  of  the these  two Schedules.  The wide liberty granted for  exports (particularly  to  hard currency areas) of all  goods  other than  a few specified in the above two Schedules  is  easily understood  in the context of the country’s imperative  need to  boost  up its exports and augment its  foreign  exchange reserves.   Simultaneously,  India  had  also  entered  into reupee-trade  agreements  with U.S.S.R.  and  certain  other countries with view to improving mutual trade between  India and these countries.  These agreements permitted, subject to certain  monetary limits and other restrictions, exports  of various types of goods from India to these countries.      The  appellant, which is a "recognised trading  house", carrying  on business as exporters, saw in these  provisions an   opportunity   to  make  quick   money.    It   imported Haemodialysers from West Germany and exported them to Russia at a profit.  We are told that sometime in 1987 he  imported several  sets of such Haemodialysers through Bombay  customs and, within a short interval, exported them to the  U.S.S.R. through  Bombay  customs without any objection  being  taken thereto  by  the  customs  authorities.   This,  apparently, emboldened  the  appellant to repeat the attempt  with  some variation and it is with this second transaction that we are here  concerned.  In May, 1988, the appellant obtained  from the  Trade Representative of the U.S.S.R. in  India  another order  for the supply of 53 Haemodialysing  machines  (along with  spare  parts  and  accessories)  manufactured  by  the renowned West German company M/s. Fresenins A.G. bearing the trade name "A-2000C".  In pursuance of the above order,  the appellant,  in  turn, placed an order with the  West  German manufacturers for the import of 53 Haemodialysers into India through the port of Bombay.  The Bombay Custom House allowed the clearance of the goods on 19.10.88 under OGL and without payment  of  customs duty.  After clearing  the  goods,  the appellant  took  the  goods to  its  Ankleshwar  factory  at Gujarat  where the goods are claimed to have been  subjected to  "moisture  proof packing, pelletisation,  fabrication  of necessary stand etc." but arguments before us have                                                        311 proceeded  on  the  footing  - as  was  also  found  by  the authorities  -  that nothing special had been  done  to  the imported goods and that, in India, they were merely repacked for  the purposes of export.  The goods were then  taken  to Kandla Port for shipment to the U.S.S.R. and shipping  bills were  presented  to  the Customs  Department  at  Kandla  on 2.12.88.  The C.I.F. value of the imports to the   appellant was Rs. 2,33,91,288 whereas the F.O.B. value of the  exports

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was  Rs.3,31,27,600.  The appellant thus earned a profit  of Rs.97,36,312 on the transaction.      Eleven  shipping  bills were presented  to  the  Kandla Customs authorities on 2.12.88.  The pro-forma of the  bills contained  three  alternative  descriptions  for  the  goods sought  to be exported viz. "free goods/India Produce to  be exported/India Produce", none of which were struck off.   On examination  it  was found that the goods  were  of  foreign origin in original packing and that they had been cleared in October   1988  through  Bombay  Customs  House  "for   home consumption"  but got repacked at Ankleshwar  and  presented for  export  at  Kandla.  As the Customs  authority  was  of opinion  that re-export of goods imported under OGL was  not permissible except with the specific approval of the Import- Export  Control authorities - he subsequently also got  this clarified  by the Chief Controller of Imports and Exports  - he  detained  the  goods  for  further  examination.     The appellant,   however, represented that the immediate  export of  the  goods was an imperative necessity to cater  to  the victims  of  the  earthquake in Armenia  and  persuaded  the authorities  to clear the goods for export, subject  to  the outcome of the proceedings, on payment of a cash desposit of Rs. 6 lakhs, furnishing a bank guarantee of Rs. 10 lakhs and a bond for the full value of the goods.      On  looking  further  into  the  matter,  the   Customs authorities   were  of  opinion  "that  the  appellant   had contravened  the conditions of the customs notification  and so not entitled to its benefit and had also contravened  the provisions  of the OGL" and "that they (the goods)  appeared to  be liable to confiscation under s.113(d) of the  Customs Act  and  to have rendered themselves liable  to  a  penalty under s.114 of the Customs Act".  A "show-cause" notice was, therefore,  issued  on 25.3.89 and,  after  considering  the appellant’s reply dated 31.7.1989, the Collector of  Customs passed an order on 22.10.1990.  He agreed with the appellant that  the goods were not liable to import duty and that,  in any   event,  the  Kandla  Collector  of  Customs   had   no jurisdiction to demand customs duty on goods imported                                                        312 through Bombay. But, he concluded,:           "The   goods   under   export   were   liable   to          confiscation  under Section 113(d) of  the  Customs          Act.  Since the goods have already  been  exported,          they  are  not  available  for  confiscation.    By          rendering  the goods liable to  confiscation,  M/s.          M.J.  Exports have rendered themselves liable to  a          penalty  under  Section  114 of  the  Customs  Act.          Considering  the fact that the goods  have  already          been exported, I proceed to take action in terms of          the bond, Bank Guarantee and cash deposit furnished          by  the exporter.  I therefore impose a penalty  of          Rs.50  lakhs  on M/s. M.J. Exports.   In  order  to          realise  this amount I order the  appropriation  of          the cash deposit furnished by them towards  penalty          and  direct  the  Department  to  invoke  the  Bank          Guarantee  furnished  by  them  immediately.    The          balance  amount shall be paid by M/s. M.J.  Exports          separately in terms of the bond furnished by them".      The appellant preferred an appeal to the Central Excise &  Gold Control Appellate Tribunal (’the  Tribunal’)  which, by  an  order  dated 14.6.91,  dismissed  the  appeal.   The present  appeal  by  Special Leave is  from  the  Tribunal’s order.      Sri Habbu, learned counsel for the appellant, contended that,  under s.113(d) read with s.114, the  confiscation  or

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the penalty can be justified only if the subject goods  fall under the following description in cl.(d) of s.113 viz.           "any  goods  attempted to be exported  or  brought          within  the  limits  of any customs  area  for  the          purpose   of  being  exported,  contrary   to   any          prohibition  imposed  by or under this Act  or  any          other law for the time being in force".      He submits that the appellant was entitled, as a matter of  right,  to  export the subject goods as  they  were  not included  in  Schedule  I or Schedule  III  to  the  Exports Control  Order.  According to him, far from prohibiting  the export  of  the  goods in  question,  the  provisions of the Customs  Act actually permit their export.  He  invited  our attention, in particular, to section 51, 54, 69 and 74.   He submitted  that  trade  agreement  with  the  U.S.S.R.  also encouraged exports to that country.  According to                                                        313 learned  counsel, the export is also not "prohibited  by  or under  any  other  law for the time being  in  force".   He, therefore,  submits  that  the orders  of  confiscation  and penalty deserve to be set aside.      On  the  other hand, learned counsel  for  the  Revenue submits  that  s.51  of the Act disentitles  a  person  from exporting  "prohibited  goods",  an  expression  defined  by s.2(33) of the Act thus:           "prohibited  goods" means any goods the import  or          export of which is subject to any prohibition under          this  Act  or any other law for the time  being  in          force  but  does  not include  any  such  goods  in          respect  of which the conditions subject  to  which          the goods are permitted to be imported or  exported          have been complied with".      According to him, the goods now in question fall within the  scope  of  this definition for various  reasons  to  be elaborated upon later.  In this view, he says, ss.54, 69 and 74  do not help the assessee’s case in any manner.   It  is, therefore,  submitted that the provisions of  ss.113(d)  and 114 were rightly invoked in the present case.      Leaving  out  of consideration the  issue  whether  the appellant was entitled to exemption from customs duty on the import of the goods in question - an issue which was decided in  favour of the assessee by the Collector of  Customs  and has not been pursued further and is not in issue before us - the  basic  and only controversy before us  is  whether  the export  of  the  subject goods is barred,  expressly  or  by necessary implication, by the provisions of the Customs  Act or  any other law in force.  The Revenue bases its  case  of prohibition on the export of the goods on two grounds. It is submitted firstly, that the terms of the OGL under which the goods  were permitted to be imported by any person  made  it clear  beyond  doubt that they were intended to be  used  in India and not to be exported.  Secondly, it is pointed  out, the import clearance of the goods had been granted "for home consumption"  and  not  for export.  It is  urged  that  the provisions  of the Customs Act make it clear that  clearance of  imported  goods can be only for  "home  consumption"  or "warehousing";  the import of goods just for the purpose  of export  is not envisaged or permitted under its  provisions. Reference was also made to certain provisions of the Foreign Exchange Regulation Act, 1973 (FERA).                                                        314      The  second point may be considered first. S.45 of  the Act  provides that all imported goods unloaded in a  customs area  shall remain in the custody of such person as  may  be approved by the Collector of Customs until they are  cleared

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for  home consumption or are wareshoused or are  transhipped in  accordance  with the provisions of  Chapter  VIII.   The third  of these cases is dealt with in Chapter VIII.  It  is one in which there is, in substance, no import of the  goods into  India for, though technically the goods  enter  Indian territory, such entry is only by way of transit through this country to their real destination.  Such goods are mentioned by  the  transporter  in his "import manifest"  and  may  be transitted in the same vessel or aircraft or transhipped  by a different vessel or aircraft to their actual  destination: (vide,  sections  53 & 54).  Except in the above  case,  the goods  are  actually  imported into India  and  have  to  be cleared  from  the  customs area  for  home  consumption  or warehousing  and this is done by presenting a bill of  entry under  section  46.   The terms of this  section  read  with Regulation 3 and Forms I, II or III appended to the Bill  of Entry  (Forms) Regulations, 1976, make it clear  that  there are three forms of the bill of entry : for home-consumption, for   warehousing  and  for  ex-Bond  clearance   for   home consumption. Imported goods can, therefore, be cleared  only for home-consumption or warehousing and, in this case, there is no dispute that they were cleared by the appellant  under a bill of entry for home consumption.  The argument for  the Revenue  is  that the enactment,  understandably,  does  not envisage the entry of goods into India for the mere  purpose of  being  exported again from India in the  same  form  and without  any change. The appellant had purchased  the  goods from Germany admittedly for their sale to Russia.  It  could have  effected  the  transaction by asking  its  vendors  to consign  the goods to some Russian destination directly  or, if it considered it necessary, via an Indian port and,in the latter   case,  it  could  have  had  them  transitted    or transhipped  (without actual clearance in India)  under  the provisions  of  Chapter VIII.  The law,  however,  does  not permit, says State counsel, an import just for the  purposes of  export.  Even otherwise, the appellant has  cleared  the goods  for  home consumption and so they are to be  used  or utilised  in India; it is not permissible for the  appellant to export goods cleared for home consumption.      We do not thing that this contention of the Revenue  is sound.  The contrast that finds emphasis in the sections  as well  as  forms above referred to is of clearance  for  home consumption as opposed to clearance                                                        315 for  warehousing.  The presentation of a bill of  entry  for home  consumption  only  means that the  importer  does  not intend to warehouse the goods; in the latter case, he is not required  to  pay  the import duties,  if  any,  immediately (ss.59  and 59A). The form of the Bill of  Entry  prescribed under  the  Act does not require any  declaration  from  the importer as to the purpose for which the imported goods  are required  or that they will be used or sold only  in  India. The expression ’home consumption’ has also, in the  context, no clear or definite meaning and raises a lot of  conundrums if literally interpreted to mean that imported goods  should always be consumed in India.  Is it home consumptions if the importer does not not use the goods himself but sell   them? At  what point of time should the importer make up his  mind whether  he proposes to sell the imported goods in India  or wishes  to export them outside?  Is the condition  infringed if  a  purchaser of goods from the importer sells  it  to  a buyer in a foreign country?  Will it be permissible for  the importer  to  use the imported goods in the  manufacture  of other  goods  which  he  proposes  to  export?   All   these uncertainties  in  the connotation of the  expression  ’home

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consumption’  preclude one from giving an interpretation  to this  expression  that the imported goods cannot be  at  all exported and incline one to hold that, in the context, it is only used in contrast to the expression ’for wareshousing’.      The above general consideration apart, there are  other indications in the statute which show that the Act does  not prohibit  the  export of imported goods.  The  Act  provides that that goods which are cleared from the customs area  for warehousing  can  be  cleared from the  warehouse  for  home consumption  (s.68) or exportation (s.69).  At first  blush, this  may seem to support the Revenue’s interpretation  that clearance for exportation and clearance for home consumption are  two different things.  It is indeed suggested by  State counsel that, if an importer intends to export the  imported goods, he should clear them for warehousing and then proceed in  terms  of  s.69.  But a little though  would  show  this interpretation cannot be correct.  In the first place, where an  importer,  even at the time of the import  purchase  has decided  to  sell the goods in another country  (as  in  the present  case), he may, as pointed out earlier,  easily  ask the goods to be transitted or transhipped to the country  of sale  and  thus avoid any necessity for their being  at  all cleared  in India.  But where, for one reason or  other,  he wants  to import the goods into India and then sell them  to the  foreign  country or where the importer  decides  on  an export sale only after he has arranged for the import of the goods into India, the Act prescribes                                                        316 no  form  of a Bill of Entry under which he can  clear  such goods  intended for re-export.  It would not be  correct  to insist  that  he must clear them for  warehousing  and  then export  them  by clearing from the  warehouse.   Whether  to deposit  the goods in a warehouse or not is an option  given to the importer.  If he is able to pay the import duties and has his own place to stock the goods, he is entitled to take them  away.   But, where he has either  some  difficulty  in payment  of  the duties or where he has no  ready  place  to stock  the  goods before use or sale, he  cannot  clear  the goods from the customs area.  The warehouse in only a  place which  the  importer, on payment of prescribed  charges,  is permitted  to utilise for keeping the goods where he is  not able  to  take the goods straightaway  outside  the  customs area.   There  is nothing in the provisions of  the  Act  to compel an importer even before or when importing the  goods, to make up his mind whether he is going to use or sell  them in  India or whether he proposes to re-export them.   Again, there  may be cases where he has imported the goods for  use or  sale  in India but subsequently receives  an  attractive offer  which necessitates an export.  It would  make  export trade  difficult  to say that he cannot  accept  the  export offer as the goods, when importer, had been cleared for home consumption.   S.69,  therefore, should be only  read  as  a provision setting out the procedure for export of warehoused goods  and  not as a provision which  makes  warehousing  an imperative  pre-condition for exporting the imported  goods. The second reason for not reading ss.68 and 69 as supporting the  Revenue’s  interpretation is even more  weighty.   That interpretation  would  mean that imported goods can  be  re- exported after being warehoused for sometime (even a day  or a  few  hours) but that they cannot be  exported  otherwise. Such  an interpretation has no basis in logic or  sense  and makes  mincemeat of the broader principle contended  for  by the Revenue that imports are intended for use in the country and not for export.  Incidentally, we may observe that  even this  principle  contended for by Revenue may itself  be  of

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doubtful validity as it is based on an erroneous  assumption that   a  re-export  of  imported  goods  will   always   be detrimental to the country.  It is true that, in the present case, the appellant has been criticised for having  utilised valuable  hard currency for the purchases and reselling  the goods only for rupee consideration. But, conceivably,  there may be cases where an importer is able to import goods  from a soft-currency area and sell them in a  hard-currency  area earning  foreign  exchange  for the  country.   It  is  also possible  to  think  of  cases  where,  though  economically unremunerative,   the   exports   can   be   jusitified   on considerations of                                                        317 international amity and goodwill such as for example,  where the goods are exported to a country which is in dire need of help  and assistance.  The principle is also  non-acceptable on  the  ground  of  vagueness  as  to  the  extent  of  its application  to  exports  made after an  interval  or  after changing  several hands inside the country by way  of  sale. We are, therefore, unable to read ss.68 and 69 as supporting the Revenue’s contention.      On the other hand, there are provisions which  indicate that  export of imported goods is very much envisaged  under the  statute.   The  provisions  contained  in  s.74   fully reinforce   this  interpretation.   Indeed  s.74  would   be redundant  if  the Department’s stand  that  imported  goods cannot  be  exported  were to be accepted  as  correct.   As pointed out by counsel for the appellant, para 174(1) of the Policy which reads:           "No  REP  benefits are admissible in the  case  of          imported  goods which are re-exported in  the  same          State   without   undergoing  any   processing   or          manufacturing operations in India."      also  impliedly recognises that imported goods  can  be re-exported as such; only the exporter thereof cannot  claim REP benefits.      This brings us to the consideration of the second issue in this case as to whether the attempted export of the goods contravenes  any  condition under which the  import  of  the goods  was permitted.  The Revenue submits that  the  object and purpose of putting the goods in question on the OGL  and making  it available for import by any person is writ  large in  the  very heading of the list in which it  is  included. The  import is permitted so that life saving  equipment  and medicines  are available for use in the country and  not  to enable a private party to make profit by their export either directly  or through some one else.  To permit such a  thing will result in furstrating the very intent of the Government in  placing the item on the OGL and, indeed, going  further, and exempting them from import duty. It is pointed out that, when a doubt regarding the scope of the OGL was raised,  the customs  authorities had, with the appellant’s  concurrence, made  a  reference to the Chief Controller  of  Imports  and Exports  (CCIE)  under  para  24.1 of  the  policy  who  had "clarified" that the imports under the OGL and certain other licences "are entirely meant for use within the country  and therefore  cannot be allowed for re-exports as  such".   The policy no doubt refers to the goods imported under OGL being meant for "stock and sale" but this also means only that  it is for home consumption and not                                                        318 export  purposes.   It  is said that  the  appellant  having agreed to the reference to the CCIE is bound by the latter’s opinion.      On  the  other  hand,  the  learned  counsel  for   the

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appellant  stresses  the point that Appendix  6  imposes  no specific condition that the life saving equipment should  be used in India and should not be exported.  The words  ’stock and  sale’  are very wide and there is no  justification  to restrict  them  to mean only sales within the  country.   In support  of  this interpretation, reliance is placed on  the decision of the Delhi High Court in the case of Janak  Photo Enterprises (1990) 49 E.L.T. 339.      We have considered this aspect of the matter carefully. The  relevant OGL is the one dated 20/5/88 covered by  Order No.  15/88-91 which refers in its Schedule  to  "Life-saving equipment appearing in List No.2 of Appendix-6 of Import and Export  Policy, 1988-91 (vol.1) and their spares".  It  also set out a number of conditions of grant of the OGL, the very first  of  which is that, except in the  case  of  "teaching aids"  covered by serial no.1, "all other items  covered  by the Schedule annexed to it may be imported by any person for stock and sale purposes".  Prima facie, there appears to  be no  reason  to confine this only to sales in  India  and  as prohibiting the re-export of the imported goods  from India. The interpretation of a condition in these terms came up for consideration,  though not finally decided, in the  case  of Janak Photo Enterprises, relied upon for the appellant.   In that  case,  the assessee had imported  photographic  colour films  from  Japan, cleared them for home  consumption,  and then  presented them for export to Singapore.   The  customs authorities,   relying  upon  a  certificate  of  the   CCIE analogous  to the one in the present case,  confiscated  the goods  under s.113(d) but allowed them to be re-exported  on payment of a huge redemption fine, a penalty and payment  of appropriate duty for ex-bond clearance.  The assessee  filed a writ petition challenging this order.  Pending disposal of the  writ, the High Court permitted the export of the  goods subject to certain conditions.  In doing so, the court  made certain   observations  which,  learned  counsel   for   the appellant says, are equally apposite in the present case:           "5. The goods in question, being the  photographic          films (colour), fall under App.7, List 8, Part  II,          Serial No.41 of the Import and Export Policy, 1988-          91, and their import is allowed by all persons  for          actual  use/stock and sale.  The contention of  Mr.          aggarwal is that since the goods were imported  for          stock                                                        319          and  sale, these could not be re-exported.  We  are          unable to agree with the contention of Mr. Aggarwal          or  with the view taken by the respondents.  Again,          to  us,  the goods do not appear to  be  prohibited          goods.  We may usefully refer to Para 4 of  Section          I,  dealing  with  Export Control,  in  Import  and          Export  Policy,  1988-91, Vol. II,  in  respect  of          Export   Control  and  Procedures,  which   is   as          follows:-          "Only  item included in Schedule I to  the  Exports          (Control)  Order, 1988 are under control.  No  such          item  can  be exported unless it is  covered  by  a          valid  licence  issued  by  a  licensing  authority          competent to grant an export licence for that item.          Goods  which are not included in this Schedule  can          be shipped without any export licence unless  their          export  is controlled under any other law  for  the          time being in force."           Thus,  the  Export (Control) Order,  1988  is  not          applicable to photographic film (colour).           6.  If  reference is made to S.74 of the  Act,  it

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        appears that when any goods capable of being easily          identified which have been imported into India upon          which any duty has been paid on importation, are to          be  re-exported  and the goods are  not  prohibited          goods, then clearance for exportation can be  given          by   the   proper  officer  (S.51)  and   on   such          exportation 98% of the duty paid on importation  is          to  be re-paid as drawback. We have not been  shown          which are those goods which can thus be re-exported          and where import duty already paid is to be claimed          as  drawback.   We  have also not  been  shown  any          provision of law stating that the goods which  have          been  imported  could be sold only in  the  country          itself.   The  clarification given by the CCI  &  E          does  not  appear to be appropriate.  We  may  also          note  that  under  S.18  of  the  Foreign  Exchange          Regulation  Act, 1973 and various other  provisions          thereof,  there  are sufficient safeguards  to  see          that  proper  sale  price on  export  of  goods  is          realised.   It is not the case of  the  respondents          that there is dearth of photographic film  (colour)          in the country, and export of the goods in question          would  certainly result in earning of some  foreign          exchange for the country.                                                        320           xxx     xxx     xxx           8.  We  would like to add that the view  which  we          have taken above is only a prima facie view and  is          subject  to  final determination in  the  petition.          All the CMs stand disposed of.      We  have  no information as to whether  the  said  writ petition  has since been disposed of by the High  Court  and become final.  We are inclined to agree with the prima facie view  expressed by the High Court that the words "stock  and sale" may be, generally speaking, wide enough to  comprehend sales inside as well as outside country and that their scope should  not be restricted unless such a restriction  can  be read  into the terms of the OGL itself.  That, we think,  is where  the  present case essentially differs  from  the  one before the Delhi High Court. We are clearly of opinion  that whatever may be the position in regard to the other lists in Appendix  6, the items of goods enumerated in list  no.2  of that  Appendix  stand  in a class of their  own.   There  is sufficient  indication in the heading given to the  List  to show that the import of these items into India is  permitted only because such life-saving equipment is required for  use in the country.  The use of the words "stock and sale" shows only  that  the  items  are not restricted  to  use  by  the importer  but can be transferred by him to another.  But  we do not think it proper to read them as permitting a sale  of the goods outside the country Note (44) in Appendix 6  reads thus:           "Import of Life Saving Equipment appearing in List          2  of  this Appendix shall be  eligible  to  import          spares  of  such equipment either  along  with  the          machines or separately".      This also carries a mild indication that the  equipment permitted to be imported is only for purposes of use in  the country.   The  circumstance  that  these  items  are   also exempted from customs duty at the time of import -  although the  list of such exempted items is not identical with  list no.2  of Appendix 6 - also lends support to  the  conclusion that the goods so permitted are not meant for re-export.  An indication to a similar effect is also seen in the  foreword issued  by  the Government while publishing Vol.  I  of  the

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Import-Export  Policy  (1988-91),  Vol.  I  Para  3  of  the foreword says:           "The Open General Licence lists have been expanded          by  inclusion  of more items.  In  particular,  the          lists of life saving equipment and drugs have  been          substantially enlarged to                                                        321           facilitate  easy access to imported equipment  and          drugs which are not available in the country".      We are, therefore, of the opinion that, although  there is no express prohibition, the re-export as such of items of goods  specified  in  list  2 and  imported  into  India  is prohibited by necessary implication by the language of,  and the  scheme underlying, the grant of OGL in regard to  them. It  is  difficult  to agree that  the  import-export  policy envisages the re-export of goods belonging to this category. The  opinion of the CCIE is also to the same  effect.   This opinion also derives some binding effect from para 24(1)  of the  Import  Policy read with paras 22 & 23  of  the  Export Policy, which say:           Para 24(1): The interpretation given by the  Chief          Controller of Imports and Exports, New Delhi in the          matter  of  interpretation  of  Import  Policy  and          procedures shall be final and will prevail over any          clarification  given  by any  other  authority  and          person in the same matter.           Para  22: Cases for relaxation of existing  policy          and procedures where it creates genuine hardship or          where  a strict application of the existing  policy          is  likely  to  affect  exports  adversely  may  be          considered  by the Chief Controller of Imports  and          Exports.           Para 23: In matters relating to export, as well as          the interpretation of export policy and procedures,          the   person  concerned  may  address   the   Chief          Controller  of Imports and Exports, New  Delhi  for          necessary advice.  Any interpretation of the export          policy  given in any other manner or by  any  other          person will not be binding on the Chief  Controller          of Imports and Exports, or in law.      Sri  Habbu  contended that we should construe  the  OGL strictly   on  its  terms  and  should  not  be  guided   by "extraneous"  considerations  as to the possible  object  or intention of the Government in inserting List 2 in  Appendix 6.  In  this context, he referred to the decisions  of  this Court   in  Hansraj  Gordhandas  v.  H.H.  Dave,   Assistant Collector  of  Central Excise & Customs, Surat &  Two  Ors., [1969]  2 S.C.R. 253 [followed and applied in State of  M.P. v.  G.S. Dall and Flour Mills, (1991) 187 I.T.R.  478  S.C.] and Union of India & Anr, v. Deoki Nandan Aggarwal, (1991) 3 J.T. S.C. 608.                                                        322 The  principal enunciated in the said decisions is that  the court  should construe the terms of the statutory  provision or  instrument before it and should not supply or  introduce words  which  are  not found therein to  give  effect  to  a possible intention behind the provision or instrument  which is not borne out by the language used.  But, as pointed  out by  this  Court  in Surjit Singh Kalra v.  Union  of  India, [1991]  2 S.C.C. 87, "though it is not permissible  to  read words   in  a  statute  which  are  not  there,  where   the alternative  lies  between either supplying  by  implication words  which  appear to have been accidentally  omitted,  or adopting  a  construction which  deprives  certain  existing words  of  all  meaning, it is  permissible  to  supply  the

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words".   The  Court  should  construe  a  provision  in   a harmonious  way to make it meaningful having regard  to  the context in which it appears.  Here, we are only interpreting the  language  used  and giving content and meaning  to  the classification  and  heading used in  the  order  permitting imports  under  OGL in certain cases in the context  of  the provisions of the Imports and Exports Control Act, 1947,  as well  as the orders and notifications issued thereunder  we, therefore,  do not find any force in the contention  of  Sri Habbu.      Taking  into account all the above  considerations,  we hold  that  the goods in question  were  "prohibited"  goods within  the meaning of S.2(33) and that  their  confiscation under  S.113(d)  and  the penalty  under  S.114  were  fully justified.      Before  we  conclude,  we may refer  to  certain  other aspects which were touched upon by one side or the other  in the course of the arguments before us:      (1) Much emphasis has been laid by the counsel for  the Revenue on the circumstance that the appellant had  obtained the  import  of  the goods free of duty by  relying  on  the notification  granting exemption from customs duty.   It  is obvious  that  it could not have been the intention  of  the legislature to grant exemption from customs duty in  respect of  vital goods of the nature in question in order  that  an importer  may  make  profit by  selling  them  abroad.   The notification is, therefore, relevant for the issue before us to  the  limited  extent  that  it  lends  supports  to  the construction  of List 2 of Appendix 6 in the manner we  have interpreted it.  This apart, we are not concerned here  with the  questions whether the attempt of the assessee to export the  goods (which has, in the event, been successful)  would amount                                                        323 to  an infringement of the conditions permitting the  import so  as to render either the import itself [vide s.111(0)  of the  Act] or the exemption from import duty or both  illegal and invalid and, if so, the consequences thereof.      (2) Reference has been made on behalf of the Revenue to the  foreign  exchange loss incurred to the country  by  the import from a hard currency area and the export to a country which  will  pay for the goods only in rupees.  We  do  not, however,  think  this  argument   or  the  foreign  exchange regulations,  to which some casual reference was made,  have any  relevance  to  the  present  issue.   It  is  not   the suggestion   of  the  Revenue  that  there  has   been   any infringement  of the FERA in this case.  Even if  there  had been,  the consequences flowing from such infringement  have to  be  worked out elsewhere.  The issue before us  is  only that of the permissibility of the export, the destination of export being immaterial.  As pointed out for the appellant - and as indeed happened in Janak Photo Enterprises (supra)  - the  export could well have been to a hard currency area  in which event this objection of the Revenue would have had  no force.   But,  on the ratio of our  decision,  an  attempted export   to   such  a  country  would  have   been   equally objectionable.  The goods were for use in this country,  not in another.      (3)  During the pendency of the proceedings before  the Collector,  the  appellants are said to have  secured  a  no objection   certificate  of  the  RBI  to  the  export   "on humanitarian   grounds"   in   view   of   the   appellant’s representation that the goods were needed for the succour of the victims of the Armenian earthquake in Russia.  There  is no  material before us regarding the date of the  earthquake

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or  to  indicate that the purchase orders  had  been  palced thereafter.  We do not even know whether the earthquake  was only  a  subsequent development taken advantage  of  by  the assessee  to have the goods cleared pending adjudication  of issue  by  the  Customs authorities.  It is  true  that  the goods,  being  in the nature of life-saving  equipment,  may have  been  eventually  used only for that  purpose  in  the country of export.  But, if as we have held, the imports  of the  goods  were  intended  for their  use  in  India,  this circumstance is of no assistance.      Learned  counsel  has,  however,  contended  that   the exports  have  been  made in pursuance  of  a  mutual  trade agreement  between  the  Government of  India  and  U.S.S.R. considered  beneficial to both countries and hedged in  with conditions ensuring the interests of both the countries  and that  this  should be considered sufficient to  justify  the export.  In our opinion, the                                                        324 mere  fact  that mutual trade was allowed  between  the  two countries is not enough to hold that even goods of this type - which had been allowed to be imported with a specific  end in view - could be exported.  Learned counsel did not  place the  trade  agreement  or  any  material  to  show  that  it specifically provided for the export of goods of this nature to U.S.S.R.  We have no doubt that the export of such  goods may  also enure to the benefit of India indirectly  but,  in the  absence of anything to show that the goods in  question constituted  one  of  the categories  of goods  specifically envisaged by the mutual trade agreement, it is not  possible to override the prohibition implicit, as held by us, in  the Import regulations.      (4)  The show cause notice referred to clause 15(g)  of the  Export  Control  Order, 1988.  The said  clause  15  is headed  "savings" and it enumerates situations in  which  the Export  Control  order does not apply; in  other  words,  it provides  that,  in certain circumstances,  exports  can  be permitted even where such export might otherwise  contravene the  provisions of the order.  It is, in this context,  that it provides that goods cleared under a bond for re-export to countries other than Nepal and Bhutan [sub- cl.(g)] or goods imported in transit or transhipment to destinations  outside India [sub-cls.(c) and (f)] or even goods imported without a valid  licence if permitted to be  re-exported  [sub-cl.(i)] could be re-exported irrespective of any restrictions  under Export  Control Orders issued from time to time.   We  agree with  learned counsel for the appellant that sub-clause  (g) cannot be interpreted to mean that imported goods cannot  be exported  unless  they are cleared, at the time  of  import, under a bond for re-export.      (5) Two clauses of the Import Control Order, 1955  have also been relied upon by the Revenue.  The first of these is sub-clause (d) of clause 11(1).  This clause, like clause 15 of  the  Export Control Order, is headed "savings"  and,  by virtue of sub-clause (d), nothing in the order was to  apply to the import of the goods "by transhipment, as imported and bonded  on  arrival  for re-export as ships  stores  to  any country  outside  India except Nepal, Tibet  and  Bhutan  or imported  and bonded on arrival for re-export  as  aforesaid but   subsequently   released   for   use   of    diplomatic personnel...who  are exempt from payment of duty...."   This sub-clause  was  amended  in  1985  to  add  the  words  "or otherwise"  after the word "ships stores".   The  CEGAT  has relied  upon the amendment to draw an inference against  the appellant  that,  since  the goods do not  fall  under  this clause,

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                                                      325 their  export was not permitted.  We think that this is  not correct  for the reasons we have pointed out in  respect  of clause 15(g) of the Export Control Order, 1988.  To say that goods bonded for re-export as above will not be affected  by the provisions of the order does not mean that goods, not so bonded,  cannot  be exported at all.  Their  export  can  be interdicted only if their is some other express or  implicit prohibition  in  clause  3 of the Export  Control  Order  or otherwise.      (6)  Reliance has also been placed by the  Tribunal  on clause  10 C of the Imports Control Order for rejecting  the assessee’s  contentions.  It is sufficient to  extract  sub- clause (1) of this clause which reads:           "10C.  Power  to make directions for the  sale  of          imported goods in certain cases - (1) Where, on the          importation of any goods or at any time thereafter,          the  Chief  Controller of Imports  and  Exports  is          satisfied after giving a reasonable opportunity  to          the  licensee  of being heard in the  matter,  that          such goods cannot or should not be utilised for the          purpose  for  which they were imported  he  may  by          order direct the importer of the goods (in case the          goods  were imported under Open General Licence  or          Special  General  Licence) or the licensee  or  any          other persons having possession or control of  such          goods to sell such goods to such person within such          time,  at such price and in such manner as  may  be          specified in the direction.      The Tribunal agrees that the opinions or clarifications given  by  the CCIE in the present case are  not  directions under  s.10C. But, apparently, their suggestion is that,  if the  appellant  felt that the imported goods  could  not  be utilised  "for home consumption" or "for stock and  sale  in India"  and  there were sound reasons for  exporting  it  to U.S.S.R., they could and should have obtained the directions of  the  CCIE  permitting such sale.   It  is  difficult  to approve  of  this line of reasoning.  The  provision  relied upon  is one enabling the Import-Export Control  authorities to interfere in any individual case where they find that the purpose  of the import is not being achieved.  It  does  not impose  an obligation on an importer to seek the  directions or the permission of the CCIE before exporting the goods  if otherwise permissible.  Moreover, as pointed out by  learned counsel  for the appellant, while clause 11(4) of the  order which reads:           "Nothing  in this order except paragraph (iii)  of          sub-clause (3)                                                        326           of clause (5), clause 8, clause 8A, clause 8C  and          clause 10C, shall apply to the import of any  goods          covered by Open General Licence or Special  General          Licence issued by the Central Government".  makes  clause  10C applicable to the  subject  imports,  it releases them form the application of the other restrictions and  conditions  on imports imposed by  the  Import  Control Order.      We  think, however, that para 10C is of  some  indirect assistance  in  the present case.  We may put it  this  way. The  interpretation of the OGL that has commended itself  to us (viz. that the import of the goods is permitted only  for use in India) was also the one which the CCIE had formed and this  opinion  he  had formulated in his  two  letter  dated 10.10.1988  and 27.1.1989.  As we have already pointed  out, the CCIE’s opinion on the Import and Export Control Order is

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final  and binding.  In view of this, when the CCIE came  to know that the appellant was seeking to export the goods,  he could have intervened and issued directions under clause 10C either  permitting  the export of the goods to the  USSR  or directing  them  to  be sold to  needy  hospitals  or  other parties  in  India.  He could have effectively  stopped  the export  of  the goods.  This shows that the  export  of  the goods is not free or unrestricted as made out by the learned counsel for the appellant.      (7)  Learned counsel for the Revenue also  pointed  out that  the shipping bills called for a mention as to  whether the  goods  of which export was sought were "free  goods  or India  produce  to  be  exported  or  India  Produce".   The appellant  did not strike off any of these  descriptions  as inappropriate.   The  customs  authorities  were given   the impression  that  these were Indian goods  that  were  being exported.  Indeed, the appellant itself well knew that goods imported   could  not  be  exported  as  such  without   the performance  of some operation of processing or  manufacture in regard to them.  That is why it put up a facade of taking the  goods  to Ankleshwar after their import  allegedly  for being subjected to some processes.  The customs officers, on verification,  found that all this was untrue and  that  the appellant  was  surreptitiously trying  to  export  imported goods,  after  just  repacking  them  as  goods  of   Indian manufacture.  The appellant had adopted a similar subterfuge on  the earlier occasion in December 1987 and  succeeded  in exporting like goods by not striking out the appropriate                                                        327 columns  of  a  shipping bill proforma  which  required  the exporter  to specify whether the goods were "Indian  produce or  foreign produce to be re-exported".  It  is,  therefore, urged that the goods sought to be exported do not conform to the description in the bill of entry for export,  attracting the  provisions of clause 3(3) of the Export  Control  Order and,  in turn, s.113(d) of the Act.  There is some force  in this  contention but we exporess no opinion thereon as  this was not the ground on which action was taken and it is a new ground,  involving  investigation of facts,  taken  for  the first time before us.      For the reasons discussed above, we uphold the order of the  Tribunal and dismiss the appeal.  We,  however,  direct the parties to bear their own costs. T.N.A.                                      Appeal dismissed.                                                        328