http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

PETITIONER: ANANT B. TIMBODIA

       Vs.

RESPONDENT: UNION OF INDIA AND ORS.

DATE OF JUDGMENT26/02/1992

BENCH: KASLIWAL, N.M. (J) BENCH: KASLIWAL, N.M. (J) KANIA, M.H. (CJ) RAMASWAMI, V. (J) II

CITATION:  1992 AIR 1272            1992 SCR  (1) 997  1992 SCC  Supl.  (2) 145 JT 1992 (2)    59  1992 SCALE  (1)527

ACT:      Import-Export Policy, April 1990-March, 1993:      Item 169 of List 8, Appendix 6, Part I and Para 167  of Chapter    XIII-Cloves-Classification   of-Whether    cloves imported  by  appellant  fell within  Item  169  "Drugs/Drug Intermediate not elsewhere specified."

HEADNOTE:      The appellant obtained, by transfer, an Import  Licence for the import of admissible Items as per Para 220 (2), (3), (4)   and (6) of the Import Policy 1990-93 Vol.I and  placed an  order on a foreign firm for the supply of cloves  No.  1 quality.   On arrival of the goods in the Indian  Port,  the appellant filed Bill of Entry for the clearance of the goods for  home  consumption, and claimed clearance of  the  goods against the additional licence on the ground that the cloves were covered under Item 169 of Appendix 6, List 8, Part I of the Import and Export Policy, being Drugs/Drug  intermediate not  elsewhere specified."  The Department relying  on  Para 167,  which dealt with the import of spices, took  the  view that  the  cloves could be imported  only  against  specific licence  relating  to cloves.  Hence the appellant  filed  a writ  petition  in  the High Court for a  direction  to  the respondent  to  clear the goods against the  Bill  of  Entry filed by the appellant.      The  High Court held that cloves could not fall  within the   expression  "Drugs/Drug  intermediate  not   elsewhere specified"   and the import of the cloves  without  specific licence  was  not permissible, and that the  licence  relied upon  by  the  appellant was  not valid for  the  import  of cloves.      In  the appeal before this Court, it was  contended  on behalf  of the appellant-importer that in popular sense  and trade  parlance, clove was also used as  drug  intermediate, and that in the Import Policies of 1982-83 to 1985-86 cloves were  specified as crude drug and the cloves and  clove  oil were used for treatment of dyspepsia, flatulence, etc.,  and tooth  problems and, therefore, the High Court committed  an error in holding that clove                                                   998

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

was  not a Drug/Drug intermediate, and that it did not  fall within Item 169.      Dismissing the appeal of the Importer, this Court,      HELD  : 1.1 Para 167 under Chapter XIII of  the  Import Policy of April 1990-93 clearly provides the heading  Import of Spices and under this heading of spices it further  makes a mention that import of Cloves, Cinnamon/Cassia, Nutmeg and Mace  will  be allowed against licences.Thus,  it  is  clear beyond  any doubt that cloves have been included  under  the heading Spices and the import of cloves is only  permissible against specific licences obtained in the manner provided in Para  167.  In the face of this provision, dealing with  the import  of spices, which specifically includes  cloves,  the general   provision  of  Item  169   mentioning   Drugs/Drug intermediates cannot be applied. [1002D-E]      1.2  In the instant case the appellant had obtained the licence in November, 1990 and has imported the cloves in May, 1991 and as such the import of cloves in question, shall  be governed by the provisions contained in the Import Policy of April,  1990-93, and not by any meaning given to  cloves  in any  earlier Policy.  Therefore, when para 167  provides  of obtaining specific licence for cloves, there is no necessity of  finding its meaning from earlier Policies or its use  as medicine.    There  is a clear provision under Para  167  as regards  import of spices and it would govern the import  of cloves.   That  apart, the High Court was right  in  holding that  in  the  common  parlance as  well  as  in  trade  and commerce,  clove is treated as spice and not drug.  It is  a matter  of  common knowledge that the cloves are sold  in  a ‘Kirana’ shop and not in the shop of a chemist or druggist.                                                [1002C, F-G]

JUDGMENT:      CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 916  of 1992.      From  the  Judgment and Order dated  18.6.1991  of  the Bombay High Court in W.P.N. 1914 of 1991.      Harish  N. Salve, Rajiv K. Garg and N.D. Garg  for  the Appellant.      K.T.S. Tulsi, Addl. Solicitor General, A. Subba Rao, P. Parmeswaran and A.D.N. Rao for the Respondents.      The Judgment of the Court was delivered by                                                   999      KASLIWAL, J. Special leave granted.      This appeal has been filed against the judgment of  the Bombay  High Court dated 18.6.1991.  The  short  controversy raised in the present case is whether the cloves imported by the  appellant fall within Item 169 in List 8 of appendix  6 or  fall within Paragraph 167 of Chapter XIII of the  Import and Export Policy April 1990-March 1993.      Brief facts of the case are that the appellant obtained by  transfer  an  Import Lincence  No.  3412179  dated  29th November,   1990  for  Rs.  16,10,700  for  the  import   of admissible  Items as per Para 220 (2) (3) (4) & (6)  of  the Import  Policy  1990-93  Vol. I. After  acquisition  of  the aforesaid  additional licence, the appellant placed an order for the supply of about 200 bags of Madagascar cloves No.  1 quality  to  a firm of Singapore.  The  appellant  opened  a letter  of  credit dated 6.5.1991 in favour of  the  foreign supplier.   On receipt of the letter of credit  the  foreign supplier shipped the above mentioned goods in favour of  the appellant.   On  arrival  of the goods at  Bombay  Port, (e) appellant filed Bill of Entry for the clearance of the goods

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

for  home  consumption  on 30th May,  1991.   The  appellant claimed  clearance  of  the  goods  against  the  additional licence  on  the ground that the cloves were  covered  under Item  169  of Appendix 6, List 8, Part-I of the  Import  and Export  Policy being "Drugs/Drug intermediate not  elsewhere specified."   The Department relied on Para 167 which  dealt with the import of spices and took the stand that the cloves could be imported only against specific licence relating  to cloves.      The  appellant in the above circumstances filed a  Writ Petition  in  the High Court of Bombay  seeking  a  mandamus against  the respondent to clear the  goods against the  Bill of  Entry filed by the appellant.  The High Court held  that th  cloves  cannot fall within  the  expression  "Drugs/Drug intermediate not elsewhere specified" and the import of  the cloves without specific licence was not permissible.  It was thus held that the action of the Customs Authorities in  not permitting  clearance   cannot be faulted  and  the  licence relied upon by the appellant was not valid for the import of cloves.      It  was contended by Mr. Harish Salve, Learned  Counsel for the appellant that though the use of clove as a spice is not  in  much  dispute, but at the same time  it  cannot  be disputed  that  clove is a Drug/Drug intermediate.   It  was submitted that in popular sense and trade parlance, clove is also  used  as  drug  intermediate and  that  being  so  the appellant was                                                        1000 entitled to import the cloves against the additional licence under para 220 of the Policy. It was also submitted that  in the  Import  Policies  of 1982-83  to  1985-86  cloves  were specified  as crude drugs. It was thus submitted  that  when clove   was  considered  as  crude  drugs,  there   was   no justification  now to hold that it did not fall within  Item 169  which  provided  for Drug/Drug  intermediates.  It  was further  argued  that  cloves  are  used  for  treatment  of dyspepsia and flatulence. It is also used to relieve  nausea and  vomiting.  Clove oil is famous for  medicinal  use  and specially for tooth problems. It was also argued that in the Indian Materia Medica by A.K. Nadkarni the use of the cloves has been stated as follows :-          "Uses - Cloves(unopened flower-buds) are  generally          used  as  spice  in  curry  foods  and  condiments.          Medicinally they are used to correct griping caused          by purgatives, relieve flatulence, various forms of          gastric  irritability,  colic,  dyspepsia,  and  to          increase  the flow of saliva. Combined  with  other          spices  and  rock-salt clove is  given  to  relieve          colic,  indigestion and vomiting and to many  other          uses."     It was submitted that in the Indian Pharmaceutical Codex issued  by the Counsel of Scientific & Industrial  Research, New Delhi the Action and Uses of cloves have been stated  as under :-          "Action  and  Uses  -  Clove is  one  of  the  most          stimulant  of aromatics. It is carminative  and  is          used  in treatment of flatulence and dyspepsia.  It          is sometimes administered in the form of powder  or          an infusion to relieve nausea and vomiting, correct          flatulence and excite languid digestion."     It  was  thus argued that the High  Court  committed  an error   in   holding  that  clove  was   not   a   Drug/Drug intermediate.     On  the  other  hand, it was  submitted  by  Mr.  Tulsi, Learned  Additional Solicitor General that Para 167  of  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

Policy  clearly  provided  that import of  cloves  could  be allowed  only against licences and there was no question  of applying  Item 169 of List 8 Appendix 6 which  provided  for Drugs/Drug intermediate not elsewhere specified. It was also submitted  that in the common parlance as well as  in  trade and commerce, the cloves are always considered as spice  and not  as a drug or drug intermediate. It was  submitted  that the  cloves are sold as spice in a ‘Kirana’ shop and not  as drug in a chemist shop.                                                        1001     In order to appreciate the controversy raised before  us it  would  be necessary to reproduce Para 167  contained  in Chapter  XIII  and Item 169 appearing in Part I  of  List  8, Appendix 6 of the Import & Export Policy, 1991-93 Vol. I:          "Import of Spices:          167.  (1) Import of (1) Cloves (2)  Cinnamon/Cassia          (3)  Nutmeg  and (4) Mace will be  allowed  against          licences.  Such  licences may be granted  to  those          who   imported  these  items  during  any  of   the          financial  years  from  1983-84  to  the  preceding          licensing  year. Import licences will be issued  on          the  basis  of the best year’s imports of  an  item          from  1983-84 to the proceding licensing year.  The          percentage entitlement as well as minimum value  of          licence will be as notified by the Chief Controller          of Imports & Exports. From the licensing year 1991-          92,   applicants  will  be  required   to   furnish          evidence  of exports of Indian spices,  during  the          preceding licensing year, for a value equal to  the          value  of  the import licence  granted  during  the          preceding  licensing  year.  Only  exports  of  (1)          Cardamom (small), (2) all Spices/spice products  in          approved consumer packs of 450 gms. or less  except          spice  oils and oleoresins and saffron  (3)  Herbal          spices  such  as rosemary, thyme,  terragon,  sage,          etc.  (4) Vanila (5) Black cumin, (6)  Star  anise,          (7)  Kokum, (8) Garlic, (9) Cardamom (large),  (10)          Bishopsweed, (11) Caraway and (12) Cumin seed, will          be  taken into account for the above purpose. Items          may be added or deleted by the Chief Controller  of          Imports & Exports as and when considered  necessary          in public interest.          (2) Exports referred to in sub-paragraph (1)  above          should  be direct exports by the applicant  in  his          own name with the export proceeds i.e. the  foreign          exchange  realisation in his own name,  or  exports          through   the  Consortium  of   Spices   Exporters,          membership  of  which  is to be  confined  only  to          dealers of spices who want to avail of the facility          for  exports  through  the  Consortium.   Documents          required to be furnished alongwith the  application          for  grant  of  licences for  spices  shall  be  as          provided in sub-paragraph 166(6) above.          (3) Actual users who have no past imports will also          be eligible                                                        1002          for licence on the recommendation of the sponsoring          authority   and   approval  by   the   Headquarters          Supplementary Licensing Committee.          (4)  Applications  for import of spices are  to  be          made to the licensing authority concerned."          Item 169 in Part I of List 8, Appendix 6 :-          "Drugs/Drug intermediates not elsewhere specified."     In  the  present case we are concerned with  the  Import Policy of 1990-93 and not any earlier Policy. The  appellant

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

had  obtained  the licence on 29th November,  1990  and  has imported  the cloves in May, 1991 and as such the import  of cloves  in  question  shall be governed  by  the  provisions contained in the Import Policy of April 1990-93, and not  by any meaning given to cloves in any earlier Policy. It cannot be  disputed  that  the Government has power  to  modify  or change its Import and Export Policy. Para 167 under  Chapter XIII  of  the present Policy clearly  provides  the  heading Import of Spices and under this heading of spices it further makes  a  mention that import  of  cloves,  Cinnamon/Cassia, Nutmeg  and Mace will be allowed against licences. Thus,  it is  clear  beyond any doubt that cloves have  been  included under  the heading spices and the import of cloves  is  only permissible against specific licences obtained in the manner provided in Para 167. In face of the above provision dealing with  the  import  of  spices  which  specifically  includes cloves,  the  general  provision  of  Item  169   mentioning Drugs/Drug  intermediates cannot be applied. When  Para  167 provides for obtaining specific licence for cloves, there is no necessity of finding its meaning from Policies or its use as  medicine. As regards import of spices, there is a  clear provision  under Para 167 and it would govern the import  of cloves.  That part we are in agreement with the  view  taken by the High Court that in the common parlance as well as  in trade and commerce, clove is treated as spice and not  drug. It is a matter of common knowledge that the cloves are  sold in  a  ‘Kirana’  shop and not in the shop of  a  chemist  or druggist.  Thus, we find no error in the view taken  by  the High Court and this appeal having no force is dismissed with no order as to costs. N.P.V.                               Appeal dismissed.                                                        1003