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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

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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

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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

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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

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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

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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

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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.

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