Case Law Research

CESTAT Mumbai : M/s Allana Impex Ltd Vs. Commissioner of Customs (Import) Mumbai : 17th March, 2017 Featured



Appeal No.  C/380/06
(Arising out of Order-in-Original No. 152/2005/CAC/CC(I)/AKP dated 30th December 2005 passed by the Commissioner of Customs (Import), Mumbai-I.)

M/s Allana Impex Ltd


Commissioner of Customs (Import) Mumbai

Shri V.M. Doiphode, Advocate for Appellant
Shri B Kumar Iyer, Superintendent (AR) for Respondent


Date of Hearing: 23.02.2017
Date of Decision: 17.03.2017


Per: M V Ravindran:

This appeal is directed against Order-in-Original No. 152/2005/CAC/CC(I)/AKP dated 30th December 2005.

2. The issue that falls for consideration in this appeal is whether Beef Tallow imported by the appellant and sought clearance of the same after producing the licenses, are liable for confiscation or otherwise and whether penalty is imposable. The said Beef Tallow was included in Appendix-8 of Import Policy 82 which resulted that import of Beef Tallow was canalized can be imported through State Trading Corporation of India. The case in hand Beef Tallow was imported by the appellant directly. It is the case of the Revenue that the said import was not in consonance of law as shipment took place i.e. on 22nd November 1982. The adjudicating authority has confiscated the goods which were cleared under PD/ITC Bond with 25% bank guarantee, with an option to redeem the same on payment of redemption fine and also imposed the penalty on the appellant under Section 112(a) of the Customs Act, 1962.

3. Learned Counsel after taking us through the entire case and submits that on the date of shipment of Beef Tallow, undoubtedly needs to imported only through the State Trading Corporation of India, as per the provision of the act and submits that on merits the judgement of the Hon'ble High Court of Bombay in the case of Mangla Brothers Vs Union of India  [1993 (67) ELT 466 (Bom.)] as upheld the Hon'ble Supreme Court decision as reported in [1994 (70) ELT A 103 (S.C.)] is very clear in as much Beef Tallow being canalised needs to be imported through State Trading Corporation of India. It is his submission that during the relevant period judgment of Hon'ble High Court of Bombay in the case of Jayant Vegoils and Chemicals (P) Ltd & Others Vs. Union of India and Others [1987 (30) ELT 134 (Bom.)] was holding for which decided that when an Open General Licence is granted under 1980-81 policy amendment on 5th June, 1981 through Public Notice No. 29/ITC(PN)/81 restricting imports through the canalising agency will not affect, the imports already initiated and would cover the issue was in their favour. Hence it is his submission that they were under bonafide belief that direct import of Beef Tallowis permissible as per the Import Policy 1980-81, is correct and the adjudicating authority erred in confiscating the goods and also imposition of penalty.

4. Learned Departmental Representative on the other hand submits that this matter has gone up and down so many times and now issue is squarely covered against the appellant in direct import of Beef Tallow. It is his submission that the adjudicating authority has correctly ordered for the confiscation of the goods and has given a very appropriate order of imposition of redemption fine of Rs. 15,74,067/- and penalty of Rs. 5,00,000/-.

5. On careful consideration of the submissions made by both sides and perusal of the records, we find that the issue involved in this case is regarding confiscation of the goods Beef Tallowand redemption fine in lieu of confiscation and the penalty imposed.

6. It is undisputed at the time of import, item Beef Tallowwas to be canalized and needs to be imported through State Trading Corporation. The issue of direct import by the appellant is covered against them having not imported through State Trading Corporation. We find the strong force on the submission made by the learned Counsel that the decision of Hon'ble High Court of Bombay in the case of Jayant Vegoils and Chemicals (P) Ltd & Others (supra) which was delivered on 9th January 1986 was holding view entertained by appellant. With great respect we reproduce the relevant paragraph.

The Import Policy for 1980-81 and Import Policy for 1981-82 permitted import of beef tallow under Open General Licence (O.G.L.). On June 5, 1981 through Public Notice No. 29/ITC(PN)/81 amendment in the Import Policy was made and as a result beef tallow could not be imported thereafter under O.G.L. but only through the canalising agency. Petitioner No. 1 was a registered export house and the export house registration certificate granted in his favour was valid up to June, 1984. Petitioner No. 1 acquired 8 R.E.P. licences and had them made non-transferable and endorsed for the imports of raw materials. The endorsements provided that the licences were valid for import of items in accordance with the provisions made in paragraph 176(1) and (2) of the Export Policy for April, 1980 - March, 1981. A contract was entered into for import of inedible beef tallow. The beef tallow was sold on high seas basis to Tata Oil Mills Co. Ltd., Calcutta who purchased it for exclusive industrial use for manufacturing soap. In July/August, 1983 the Government of India discovered that certain unscrupulous persons had imported beef tallow and either sold it as Vanaspati or used it in its manufacture. The discovery was a shock to the country and there was public agitation. As a result of that commotion petitioners were served with show cause notice wherein it was alleged that the R.E.P. licences were not valid for import of beef tallow. For the entire policy period 1980-81 and at the time of declaration of Import Policy for 1981-82 beef tallow was not a canalised item but could be imported under O.G.L. The licence is governed by the Import Policy prevailing on the date of issue of the licence and as the beef tallow could be imported under O.G.L. at the time of issue of the licence, it is not open to the authorities to claim that its import cannot be effected subsequent to June 5, 1981. The public notice, dated June 5, 1981 does not specify that the inclusion of beef tallow as a canalised item would affect the licences granted prior to that date. The Central Board of Excise and Customs and Government of India had consistently taken such a view. Merely because there is change of opinion in the Government agency that will not be a sufficient reason to by-pass the consistent, decision taken by the Government over a period of time and more so, in case of import of beef tallow after the issuance of public notice, dated June 5, 1981. Paragraph 222(3) of Import Policy AM 1981-82 provides that licences held by export houses will cease to be valid for import of any item which could be imported under O.G.L., during 1980-81 but is no longer so in this policy, except for such firm commitments as have been made by opening irrevocable letters of credit through authorised dealers and valid before April, 1981. This paragraph deals with a situation existing at the time of declaration or publication of Import Policy for 1981-82 and was not attracted to an amendment carried out in the Import Policy for the first time on June 5, 1981. [AIR 1971 S.C. 704 and AIR 1979 S.C. 1049 relied on].

We are of the view that appellant could have entertained a bonafide belief that direct import of Beef Tallowunder the Import & Export Policy can be done so for earlier order before 5th June 1981, and post this date will be required to be done through State Trading Corporation. It can be seen that the decision of the Hon'ble High Court of Bombay in the case of Jayant Vegoils and Chemicals (P) Ltd & Others (supra) was this point only. In view of foregoing, we hold that the confiscation goods needs to be set aside and we do so. Since, we set aside the confiscation of the goods, question of imposition of penalty does not arise.

7. The appeal is allowed and the impugned order is set aside.

(Pronounced in Court on 17.03.2017)

(C J Mathew)                     (M V Ravindran)
Member (Technical)                Member (Judicial)


Additional Info

  • Date Range: Friday, 17 March 2017
  • Court/Authority: CESTAT
  • Tax Type: Customs duty
  • Petitioner/Appellant: M/s Allana Impex Ltd Vs. Commissioner of Customs (Import) Mumbai
  • Respondent: M/s Allana Impex Ltd Vs. Commissioner of Customs (Import) Mumbai
  • Appl no. or Appl year: Appeal No. C/380/06
  • Supreme Court Location: Delhi
  • CESTAT Location: Mumbai
  • AAR Location: Delhi
  • Authority: Supreme Court

A New Feature :

Advanced Case Law Search


7th April, 2016

The “Advanced Case Law Search” feature in TaxQuotient  enables search on separate parameters such as Court, Tax Type, Date (from & to Range), appellant, respondent and even keywords. This helps you in locating case law you are searching for swiftly.

TIP: #1 : If you want to view the latest cases, just enter the start and end dates keeping all other boxes blank. You will get a list of all available indirect tax cases during that period.

TIP # 2 : Please keep the date range (start to end date) for upto 6 months.

TIP # 3 : Don't forget to reset the search to clear the earlier results before a new search.

Click to enter Advanced Case Law Search

 GST Bill passed by Parliament




The 122nd Constitution Amendment Bill introduced in Parliament in December 2014 has been passed by the Rajya Sabha and now also by the Lok Sabha with the amendments.  Now the Bill must get ratified by at least half the number of 31 State Legislatures which means 16 States and then finally get the approval from the President.

Thereafter the GST Council has to be set up which will determine the GST design at the granular level. This will include the structure of GST including scope of CGST, SGST and IGST, the taxes subsumed, the items/commodities covered and other critical aspects such as the threshold limits for taxability, exemptions, and several other parameters critical for an ideal  GST.

Further, for the GST to operate smoothly, the taxes paid on goods and services at every stage in the value chain needs to be tracked. This requires an IT infrastructure which will track the transactions and taxes paid and form the back-bone of GST. Reportedly considerable work has been already done on it, nevertheless it will need changes to correctly reflect the GST Law proposed by the GST Council and accepted by the Central & State Legislatures.

Last but not the least,  the tax authorities and other stakeholders who will implement the GST need to be trained for a smooth introduction.

Seven questions to know if you 

are paying taxes 


If you are the CFO or the Tax Head you ought to read this. Click Here

CESTAT Updates

June- July 2016


Brief update on CESTAT judgements passed during June 2016 to July 2016. Please note this update is not a summary of the cases but only leads on important issues decided. The links to the judgments are also provided for the full text.

Click here for update

Our Main Services 

in Indirect Taxes


  • Business structuring and tax planning
  • Review of end-to-end business processes for indirect taxes
  • Strategy to prevent litigation, representation and litigation support
  • Tax compliance and tax control framework
  • Support on specific issues
Go to top