M/S. BOMBAY OIL INDUSTRIES PVT. LTD.versusUNION OF INDIA AND ORS.

                  MIS. BOMBAY OIL INDUSTRIES PVT. LTD.                           A
                                     v.
                          UNION OF INDIA AND ORS.

                               DECEMBER 6, I 994

                   [R. M. SAHAI AND S. B. MAJMUDAR, JJ.]                         B

         Customs Act, 1962/Customs. TariffAct 1975:

           Sections 25, 131 (3) Heading No. 15-01106 of the First Schedule-
     Notification No. 141-CUS/76 dated 2.8.1976 granting partial exemption
     from Customs duty in respect of imported tallow subject to certain C
     specifications-Subsequent Notification No.1681 F. No.370124178/Cus I
     dated 2.9.1978 deleting one ofthe specifications regarding colour-During
      the interregnum between the dates of the two notifications, duty attracted if
     the specification regarding colour did not conform to the requirements-
      Tests to be conducted-Indian Standard method as laid down by Indian D
     Standard lnstitutfon since the tallow is utilised in India-American method
      not to be followed-Subsequent Notification-Not merely classificatory nor
      with retrospective effect-It is $imply a fresh Notification deleting the
      condition about the colour specification.

         The appellant imported bleachable- mutton tallow, while the . E
     appellants in the connected appeals imported bleachable fancy tallow,
     which according to them was not mutton tallow. The imported tallow
     was liable to customs duty under the sub-heading No.15-01/06 at the
     rate of 35 o/o ad valorem. A partial exemption in excess of 15 % ad


..   valorem from payment of custo~s duty was given as per Notification p
     No. 141-CUS/ 76 dated 2nd August, 1976. The Notification further laid
     down the specifications of the exe~pted tallow. It was provided that the
     imported tallow meeting the specifications was entitle to partial
     customs duty.

         Subsequently by another No•ification dated 2nd September, 1978, G
     one of the specifications mentioned under the earlier Notification viz.
     item (ii) and entries relating thereto were omitted. Thus the
     requirement that the imported tallow to stand the test of having colour
     not deeper than 20 in one inch cell on the lovibond scale as Y+5R was
     omitted.
                                                                                 H
                                         301
     302                   SUPREME COURT REPORTS           (1994) SUPP. 6 S.C.R

A         Before the Customs Authorities the appellants contended that they
     were entitled to get refund ofcustoms duty paid by them in excess of
     1So/o as their imported tallow satisfied the Notification dated 2.8.1976.
     The samples of imported tallow were examined by the Custom House
     and were found not meeting the colour test Specification as laid down
     in the Nodfication dated 2.8.1976. Therefore, their request was rejected
B    by the Assistant Collector of Customs.

         On appe&I, the Collector took the view that the appellant in the
     main appeal imported tallow on 4.4.1978 when the Notification 141-
     CUS/76 was operative; but since the sample did not satisfy the colour
     specification, the appeal was dismissed. As regards the appeals of other
c    appellants, the Collector allowed them and remanded to the Assistant
     Collector directing that the tallow being foreign tallow, the test should
     be done only after refining and bleaching the sample as prescribed in
     the American Oils Chemists' Society Official method Cc 8d-SS ; and
     that if it passed the colour test, the benefit of Notification 141/ CUS/76
     should be extended ; otherwise not.
D
         The main appellant filed appeals before the Tribunal against the
     said order of the Appellate Collector. As regards the other appellants,
     the Central Government issued notices under Section 131 (3) of the
     Customs Act, 1962 calling upon them to show cause why the orders
     passed by the Appellate Collector should not be recalled. After the
E    establishment of the Tribunal, these matters were transferred to the
     Tribunal as appeals taken out by the Collector of Customs.

         The Tribunal dismissed the appeal of the main appellant and
     allowed the appeals of the other appellants on the ground that the test
F    under the American method was not called for. Hence these appeals.

           Dismissing the appeals, this Court                                     •
         HELD : 1. It is obvious that whatever exemption is granted under
    Notification may be either absolute or subject to such conditions which
G have got to be fulfilled by the importers before earning such exemption.
    The Notification 141-CUS/76 does not grant such 30 per cent
    exemption in absolute terms but such exemption is based on fulfilment
    of condition mentioned therein about the specification of imported
    tallow and if the imported tallow does not meet the specification
    required it cannot earn the exemption. It is trite to say that in order to
H , earn the exemption the person claiming the exemption must satisfy th~t
                          OIL IND. (P) LTD. v. U. 0. I.                 303

  his imported item has fulfilled all the conditions of the exemption A
  Notification as such exemptions are granted in public interest.
                                                                  [310 D,EJ

      Union of India and Ors v. M/s'Jalyan Udyog and Anr., A.I.R (1994)
  SC 88 , relied on.
                                                                               B
       2.1 Once the appellants admittedly imported tallow into this
  country, on account of the charge by the Customs Act under Section
  12, their imported tallow attracted customs duty. It is for them to show
  how instead of paying full duty they got exemption to the tune of 30 per
  cent pursuant to the NotificatiQD 141-Cus/76. For that purpose they
  have to show that the imported tallow has met colour specification as it C
  was a notification granting exemption on such conditions and did not
  grant exemption in absolute terms. It is not in dispute that out of seven
  specifications mentioned in the Notification, six were met by the them
  but only on colour specification No.2 they met their waterloo. The
  ~ustom House which tested the samples of imported tallow submitted
  by the appellants, found that the colour specification laid down in D
  condition No. 2 was not· satisfied by these imported tallow and,
  therefore, on these imported tallow exemption could not be granted as
  claimed. If the appellants felt that the findings of the Custom House
  were not correct, it was open to them to get the sample cross tested
  through their experts and to lay evidence in that connection before the
  authorities as burden was entirely on them to show that they had E
  satisfied itll the conditions of Notification with a view to earn to
  exemption to the extent of 30 per ce._t of import duty on their imported
  tallow. 'Fheydid nothing of the kind. [311 E to H,312 AJ

      2.2 There appears to be a common test prescribed by the Indian
  ~tandards Institution being IS 548 Part I for all types of animal tallows.   F
    That was the test adopted by Custom House and it was found that none
    of the samples of imported tallow as submitted by the appellants
    fulfilled the requirement of condition No. 2 of the exemption
 ~ Notification. In other words, their colour in one inch cell on lovibond
    scale, expressed as Y + SR was deeper than 20. Consequently, the
    imported tallow whether mutton tallow or beef tallow or any other G
    tallow as covered by these consignments of the appellants did not
    satisfy condition No.2 of colour as laid down by Notification 141-Cus/76
    dated 2.8. 1976. On these finding reached by the Custom House and
    when no effort to rebut the same was made by the appellants, the
- conclu~ion was inevitable that these· imported consignment of tallow
  . dllring1he time the exemption Notification dated 2.8.1976 was holding H
    304                  SUPREME COURT REPORTS            [1994) SUPP. 6 S.C.R

A   the field did not earn exemption under the said Notification from the
    Customs duty to the extent of 30 percent and they were liable to pay
    full custom~ duty. This finding is rightly reached by the Tribunal on
    facts and calfs for no interference. [312 C to E]

        3. The submission that only because the appellant in the main
B   appeal imported mutton tallow, IS 548 could not have been resorted to,
    cannot be accepted in view of the Indian Stan.dards Institution's
    method for testing animal tallow which has to follow IS 548. The
    tribunal also observed in its judgement that the appellant did not
    question the test result. Consequently, it is too late to make a grievance
    about it in these proceedings. [312 F]
c
         4. As for the remaining four appellants, the Tribunal rightly held
    that it was not open to the Appellate Collector to presume that. for
    imported tallow which was not mutton tallow and which would be a
    mixture of beef and other tallows, the American method of testing
    should have been adopted by the Custom House. It is true that the
D   Notification did not specify as to which method should be followed. But
    it has to be appreciated that the imported tallow was to be utilised in
    India by Indian manufacturers and had ultimately to join the main
    stream of consumer goods either as such or after being utilised in
    production of consumer goods. When they are to be imported in India
E   and when they claim exemption under Notification issued by the
    Central Government under Section 25 of the Customs Act, the test for
    checking their colour as laid down by the exemption Notification has
    necessarily to be as per the Indian Standard method and test laid down
    by the Indian Standards Institution. [312 G, H, 313 A]

F         Union ofIndia v. Delhi Cloth and General Mills, [1963) Suppl. 1 SCR
    586, relied on.

         5. There was no occasion to test the appellants' samples of tallow
    after bleaching as that was not the method of IS 548 Part I which was
    holding the field and as such pre-bleaching and refining could not be
G   done pursuant to the American method which was not applicable to the
    facts of the present case and even by taking one inch cell testing on
    lovibond IS 548 method it would have resulted in the samples showing
    colour deepening to the extent of 34 to 36 on the basis of Y + SR which
    would not satisfy condition No. 2. The appellants cannot have any real
    grievance in this connection. [314 C, DJ
H
                OIL IND. (P) LTD. v. tJ. 0.1. [MAJMUDAR, J.]           305

    6. Even if the Central Government corrected its errqr about A
condition No. 2 from 2.9.1978 by issuing a fresh Notification, the earlier
colour specification requirement remained operative for imports made
by the concerned importers prior to 2.9.1978 when the earlier
Notification dated 2.8.1976 was holding the field. The latter
Notification cannot be said to the merely a clarificatory Notification
nor can it have any retrospective effect. It is a fresh Notification laying B
down fresh condition deleting the earlier condition No. 2 about the
colour specification. [314 G, HJ

    CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4013-13A
of 1985.
                                                                             c
    From the Order dated 21. 11. 84 of the Customs, Excise and Gold
(Control) Appellate Tribunal, New Delhi in 0. Nos.889-90/84.

   M.Chandrasekharan, Additional Solicitor General, M.A. Rangaswamy,
Ms. Radha Rangaswamy, Ms. Samitha, P.H. Parekh, N.K. Bajpai,
V.K.Venna and C.V.S. Rao for appearing Parties.                      D
    The Judgment of the Court was d~livered by

     MAJMUDAR, J. These appeals arise out a conimon judgement
rendered by the Customs, Excise and Gold (Control) Appellate Tribunal,
New Delhi, by which it disposed of ten appeals in all. Civil Appeal Nos E
4013-13A of 1985 challenge that part of the order of the Tribunal by which
the appeals of the common appellants namely, Mis Bombay Oil Industries
Pvt. Ltd. were dismissed by the Tribunal while the remaining four
appellants seek to challenge the other part of the Tribunal's order by which
four appeals moved by the Collecto~ of Customs, Bombay, against the
concerned present appellants came to be allowed by the Tribunal.             F
     The facts leading to these appeals may be noted at the outset to
appreciate the grievance of the appellants. All these appellants had
imported tallow being bleachable faticy tallow from foreign countries
between 2.8.1976 and 2.9.1978 by different consignments. So far as
common appellant Mis Bombay Oil Industries Pvt. Ltd. in C.A. Nos. 4013- G
13A of 1985 is concerned, it imported bleachable mutton tallow while the
rest of the appellants imported bleachable fancy tallow which according to
them was not mutton tallow. These imports were subject to customs duty
under the provisions of the Customs Act, 1962. As per the applicable
customs tariff as laid down in the First Schedule to the Customs Tariff Act,
1975, the imported tallow was liable to, customs duty under sub-heading of H
    306                    SUPREME COURT REPORTS              [1994] SUPP. 6 S.C.R

A   Heading No. 15-01/06 at the rate of 35 per cent ad valorem. A partial
    exemption was given by the Central Government from the payment of
    customs duty so far as imported tallow was concerned by an exemption
    Notification dated 2nd August, 1976 being Notification No. 141-CUS/76
    issued in exercise of powers conferred on the Central Government by sub-
    section (1) of Sections 25 of the Customs Act, 1962. The said Notification
B   provided that the Central Government being satisfied that it is necessary in
    the public interest so to do, exempts tallow having the specifications
    mentioned hereunder and falling under sub-heading No. 2 of Heading
    No.15-01/06 of the First Schedule to the Customs Tariff Act, 1975 (51 of
    1975), when imported into India, from payment of so much of that portion
    of duty of customs leviable thereon which is specified in the said First
c   Schedule as is in excess of 15 per cent advalorem. The Notification further
    laid down the specifications of the exempted tallow. It was provided that
    the imported tallow meeting the indicated specifications was entitled to
    partial exemption of customs duty to the extent of 30 per cent ad valorem.
    These specifications read as under :

D   "SPECIFICATIONS

      1.    Moisture and Insoluble Impurities                                   1.0
            percent by weight, max.

      ii.   Colour in a lin cell on the Lovibond scale                          20
E           expressed as Y + SR not deeper than

      iii. Saponification value                                         192 to202

      iv. Iodine Value (wijs)                                             32 to 50

      v.    Acid Value, Max                                                     10
F
      vi. Unsapponifiable matter percent by weight, Max                        0.5

      vii. Titre of fatty acids °C                                       40to49"

         The said Notification was amended later on by a Notification dated
G   2.9.1978 whereby specification No. 2 was deleted from the earlier
    Notification dated 2.8.1976 being Notification No.141-CUS-76. The said
    latter Notification dated 2nd September, 1978 being Notification No.168/F
    No. 370/24/78/Cus I provided that in exercise of the powers conferred by
    sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the
H   Central Government being satisfied that it is necessary_ in the public interest
                OIL IND. (P) LTD. v. U. 0. I. [MAJMUDAR, J.]           307

so to do hereby makes the following amendment in the Notification of the A
Government of India in the Department of Revenue and Banking No.141
Customs dated the 2nd August, 1976, namely, "In the Specification
mentioned under the said Notification, item (ii) and the entries relating
thereto shall be omitted."

     It, therefore, became clear that the importers of tallow after coming B
into operation of the latter Notification dated 2nd.September, 1978 had not
to satisfy the customs authorities that their imported tallow met the
requirement of erstwhile item No. 2 in the earlier Notification of 2.8.1976.
We have seen that the second condition of the Notification dated 2.8.1976
referred to the colour of imported tallow. The imported tallow under the
earlier Notification was required to stand the test of having colour not C
deeper than 20 in one inch cell on the lovibond scale as Y + SR. It is this
requirement which the latter Notification gave up. It is not in dispute
between the parties that import of tallow after the Notification dated
2.9.1978 having given partial exemption upto 30 % ad valorem, customs
duty on imported tallow cpvered even that imported tallow which did not
meet any colour requirement but so far as present proceedings are D
concerned as the appellants had imparted tallow during the time the earlier
Notification dated 2.8.1976 held the field, they had to meet the colour
specification No. 2. The appellari.ts contended ~efore the Customs
Authorities that they were entitled to get refund of customs duty paid by
them in excess of 15 per cent as their ·imported tallow satisfied Notification E
of Customs dated2.8.1976. The samples of imported tallow were examined
by Cu~om House and were found not meeting the colour test specification
as laid down by the Notification dated 2.8.1976. Consequently, their
request was rejected by the Assistant Collector of Customs. They went in
appeal to the Collector of Customs. The Collector of Customs, Bombay,
took the view that so far as common appellant in Civil Appeal Nos. 4013- F
 13A of 1985, namely, Mis Bombay Oil Industries Pvt. Ltd. was concerned,
it had imported tallow on 4.4.1978 when the earlier Notification 141 Cus/76
was operative. The Custom House had tested the samples by applying the
correct method of I.S. 548 and as it was found that the tallow imported by
Mis Bombay Oil Industries Pvt. Ltd. did not satisfy the colour specification
as per condition No. 2 of Notification of 1976, the appellants cannot be said G
to have earned any exemption under the said Notification on the imported
tallow and accordingly the appeals of the appellant, Mis Bombay Oil
Industries Pvt. Ltd., were dismissed. However, so far as appeals by the
remaining four appellants in the present case are concerned, the Appellate
Collector took the view that these appellants had imported tallow which
were not mutton tallow but bleachable fancy tallow which was a mixture of H
     308                  SUPREME COURT REPORTS.              [1994] SUPP. 6 S.C.R

A    beef and other animal tallow and so far as these imports were concerned,
     proper tests were not carried out by the Custom House. The Appellate
     Collector noticed that the specifications given by Customs were word for
     word and figure for figure in IS 887 for Type No.1 and that referred to
     mutton tallow and that the method prescribed for mutton tallow as per IS
     548 could not have been applied for testing colour of imported tallow of
B    these remaining four appellants· and that the correct method for testing
     samples should have been the method recommended by American Oil
     Chemists' Society wherein samples should have been first bleached and
     then got tested. In view of the Appellate Collector as the goods imported by
     these four appellants were not Indian tallow for which the IS 887 and IS
     548 were designed but foreign tallow and most probably beef tallow, it was
c    reasonable to say that the standard of the tallow should be gauged in
     accordance with the grades of standards prescribed by the American fats
     and Oil Association and if that was done the colour specification as (ound
     in condition No. 2 of the Notification was likely to be satisfied and for that
     purpose the samples were required to be re-tested by following the method
     recommended by American Oils Chemists' Society and accordingly the
D    remaining four respondents appeals were allowed and the proceedings were
     remanded to the Assistant Collector directing that the test should be done
     only after refming and bleaching the samples as prescribed in the said
     American Oils Chemist's Society Official methods Cc 8d-55. It was further
     observed that if it passes the colour test on such refming and bleaching, the
     benefit of Notification 141-Cus/76 shall be extended otherwise not.
E
         The common appellant, Mis Bombay Oils Industries Pvt. Ltd., being
   aggrieved by the order of the Appellate Collector dismissing its appeal
   preferred further appeals to the Customs, Excise and Gold (Control)
   Appellate Tribunal. So far as remaining four appellants are concerned, the
   Central Government issued notices under Section 131 (3) of the Customs
F A'.ct, 1962, whereby all these appellants were called upon to show cause
   why the orders passed by the Appellate Collector should not be recalled and
   annuled. After the establishment of the Tribunal these proceedings were
   transferred to the Tribunal. They were registered as appeals as taken out by
   the Collector of Customs, Bombay. As noted earlier the two appeals of Mis
G Bombay Oil Industries :Pvt. Ltd. and the four appeals of the Collector of
  -Customs against the remaining four present appellants were heard together
   by the Tribunal along with other four appeals. In all ten appeals were
   disposed of by the common judgement. The tribunal came to the conclusion
   that the colour specification as laid down by the Notification dated 2.8.1976
   being No.141-Cus/76 was not fulfilled by the concerned imports of the
H tallow of appellan~s herein and that therefore, these imports failed to earn
                OIL IND. (P) LTD. v. U. 0.1. [MAJMUDAR, J.]          309

the partial exemption to the extept of 30 per cent as claimed by them on A
these imports under the said Notification. It was further found by the
Tribunal that a common colour ~pecification was laid down as condition
No. 2 under the said Notification and it referred to all types of tallow
whether mutton tallow, beef tallow or other animal tallow and a common
test had to be resorted to for testing the samples of these imported tallow
and all these imported tallow did not satisfy the colour specification of B
condition No.2 of the Exemption Notification. The Tribunal further
observed that it was not open to the Assistant Collector to lay down a
separate condition for the said Notification that the sample should be tested
by American method and that the Indian Standard method as adopted by the
Custom House for testing these samples cannot be found fault with,
consequently, the appeals filed by Mis Bombay Oil Industries Pvt. Ltd., C
were dismissed and appeals filed by the Collector of Customs against the
remaining four appellants were allowed. Being aggrieved by the aforesaid
common order of the Tribunal in the respective appeals, the appellants have
preferred appeals under Section 131 (3) of the Customs Act 1962.

    These appeals were set down for final hearing before us. We have D
heard learned counsel for the contesting parties in support of their
respective cases.

     Learned counsel for the appellant, Mis Bombay Oil Industries Pvt.
Ltd., submitted that the Tribunal had committed a patent error in taking the
view that the imported mutton taUow of the appellant did not meet the E
colour specification of the exemption Notification that the Custom House
had wrongly followed the IS 548 for testing the appellant's samples and it
should have followed the official method Cc 8d-55. In any case the matters
were required to be remanded as the appellant had been denied the principle
of natural justice and fair play. Learned counsel appearing for remaining F
appellants submitted that the tallow which they imported was bleachable
fancy tallow and was not mutton tallow and, therefore, as rightly held by
the Appellate Collector the IS 548 meant for mutton tallow testing could
not have been adopted by the Custom House for testing their samples of
imported tallow and that the correct method which should have been
adopted was method prescribed by the American Oil Chemist's Society and G
if that was done in all probabilities their samples would have satisfied the
colour test of being not deeper than 20. It was next contended that
exemption Notification of 1976 nowhere lays down any particular method
for testing colour of samples of imported tallow and especially when
imported tallow came from foreign countries specially America and
Australia, the American method of t\:sting colour specification should have H
    310                   SUPREME COURT REPORTS                [1994] SUPP. 6 S.C.R

A   been adopted as Appellate Collector had done. It was further submitted that
    even if Indian testing method was adopted by following IS 548, the testing
    should have been done on one inch cell and not on half inch cell as was
    done by Custom House so far as their samples were concerned. In these
    circumstances the tribunal was not justified in allowing the appeals. These
    appeals should have been dismissed.
B
        Having given our anxious consideration to the rival contentions, we
    have reached the conclusion that there is no substance in any of the appeals.

         It has to be kept in view that as per Section 12 of the Customs Act,
    duties of customs shall be levied as specified in the Customs Tariff Act for
c   goods imported in or exported out of India. It is not in dispute between the
    parties that the imported tallow attracted the customs duty as per the
    Customs Tariff Act, 1975 at the rate of 45 per cent ad valorem but the
    appellants staked their claim on the basis of the Notification issued by the
    Central Government under Section 25 of the Act granting partial exemption
    from duty on such imported talllow. It is obvious that whatever exemption
D   is granted under Notification may be either absolute or subject to such
    conditions which have got to be fulfilled by the importers before earning
    such exemption. The Notification 141-Cus/76 which we have earlier
    referred does not grant such 30 percent exemption in absolute terms but
    such exemption is based on fulfilment of conditions mentioned therein
    about the specification of imported tallow and if the imported tallow does
E   not meet the specification required it cannot earn the exemption. It is trite to
    say that in order to earn the exemption to person claiming the exemption
    must satisfy that his imported item has fulfiled all the conditions of the
    exemption Notification as such exemptions are granted in public interest. In
    connection with such exemption Notification issued under Section 25 of the
    customs Act, a Bench of this Court in case Union of India and Ors. v. Mis
F
    Jalyan Udog and Anr., A.LR. (1994) SC 88, speaking through B. P. Jeevan
    Reddy, J., has made the following observations:-

                   "An exemption granted may be an absolute one or subject to
                   such conditions, as may be specified in the notification and
                   further that the conditions- specified may relate to a stage
G
                   before the clearance.of goods or to a stage subsequent to the
                   clearance of goods. S. 25 (1) is a part of the enactment and
                   must be construed harmoniously with the other provisions of
                   the Act. The power of exemption is variously described as
                   conditional legislation and also as species of delegated
H                  legislation. Whether it is one or the other, it is a power given
               OIL IND. (P) LTD. v. U. 0. I. [MAJMUDAR, J.]          311

             to the Central Government to be exercised in public interest. A
             Such a provision has become a standard feature in several
             enactments and in particular, taxing enactments. It is equally
             well settled by now that the power of taxation can be used
             not merely for raising revenue but also to regulate the
             economy, to encourage or discourage as the situation may
             call for the import and export of certain goods as also for B
             serving the social objectives of the State. Since the
             Parliament cannot constantly monitor the needs of and the
             emerging trends in the economy and is in no position to
             engage itself in day-to-day regulation and adjustment, of
             import-export trade accordingly, power is conferred upon the
             Central Government to provide for exemption from duty of C
             goods, either wholly or partly, and with or without
             conditions, as may be called for in public interest. Reading
             any limitation into this power is not warranted. If the public
             interest demands that the exemption should be absolute the
             Central Government c~ do so. Similarly if the public interest D
             demands that ·exemption should be granted only subject to
             certain conditions it can provide such conditions. Then again
             if the public interest demands that conditions specified
             should relate to a stage subsequent to the date of clearance it
             can do so. The guiding factor is the public interest."

     Once the appellants admittedly imported tallow into this country, on E
account o(the charge by the Customs Act under Section 12, their imported
tallow attracted customs duty. It is for them to show how instead of paying
full duty they got exemption to the tune of 30 per cent pursuant to the
Notification 141-Cus/76. For that purpose they have to show that the
imported tallow have met colour specification as it was a notification F
granting exemption on conditions did not grant exemption in absolute
terms. It is not in dispute that out of seven specifications mentioned in the
Notification , six were met by them but only on colour specification No. 2
they met their waterloo. The Custom House which tested the samples on
imported tallow, submitted by the appellants, found that the colour
specification laid down in condition No. 2 was not satisfied by these G
imported tallow and, therefore, on these imported tallow exemption could
not be granted as claimed. If the appellants felt that the findings of the
Custom House were not correct it was open to them to get the samples cross
tested through their experts and to lay evidence in that connection before
the authorities as burden was entirely on them to show that they had
satisfied all the conditions of Notification with a view to earning the H
    312                   SUPREME COURT REPORTS               [1994] SUPP. 6 S.C.R

A    exemption to the extent of 30 per cent of import duty on their imported
     tallow. They did nothing of the kind. The Custom House followed the
     method of Indian Standards Institution for testing these samples. Our
     attention was invited to booklet "Indian Standard, Methods of Sampling
     and Test for Oils and Fats" as well as booklet of "Indian Standards
     Specification for Animal Tallow" issued by the Indian Standards
B    Institution. So far as animal tallow is concerned, the booklet dealing with
     text IS 887-1977 in paragraph 8.1 lays down that the test shall be carried
     outaccording to IS 548 Part I 1964. IS 548 Part I 1964 deals with method
     of sampling and test for oils and fats. Thus there appears to be a common
     test prescribed by the Indian Standards Institution being IS 548 Part I for all
     types of animal tallows. That was the test adopted by Custom House and it
c    was found that none of the samples of imported tallow as submitted by the
     appellants fulfilled the requirement of condition No. 2 of the exemption
     Notification. In other words, their colour in one inch cell on lovibond scale,
     expressed as Y +SR was deeper than 20. Consequently, the imported tallow
     whether mutton tallow or beef tallow or any other tallow as covered by
    .these consignments of the appellants did not satisfy condition No. 2 of
D    colour as laid down by Notification 141-Cus/76 dated 2.8.1976. On these
     fmding reached by the Custom House and when no effort to rebut the same
     was made by the appellants, the conclusion was inevitable that these
     imported consignments of tallow during the time exemption Notification
     dated 2.8.1976 was holding the field did not earn the exemption under the
     said Notification from the customs duty to the extent of 30 per cent they
E    were liable to pay full customs duty. This finding is rightly reached by the
     tribunal on facts and calls for no interference. So far as submission of
     learned counsel for appellant, Mis Bombay Oil Industries Pvt. Ltd., is
     concerned to the effect that only because the appellant imported mutton
     tallow, IS 548 could not have been resorted to cannot be accepted in view
     of the Indian Standards Institution's method for testing animal tallow which
F    has to follow IS 548 as seen earlier. It may also be noted that the Tribunal
     has observed in paragraph 25 of its judgement that Mis. Bombay Oil
     Industries Pvt. Ltd. did not question the test result. Consequently, it is too
     late for it to make a grievance about it in these proceedings. So far as the
     remaining four appellants are concerned, the Tribunal rightly held that it
     was not open to the Appellate Collector to presume that for imported tallow
G
     which was not mutton tallow and which would be a mixture of beef and
     other tallows, the American method of testing should have been adopted by
     the Custom House. It is true that the Notification did not specify as to
     which method should be followed. But it has to be appreciated that the
     imported tallow was to be utilised in India by Indian manufacturers and had
H    ultimately to join the main stream of consumer goods either as such or after
                      OIL IND. (P) LTD. v. U. 0. I. [MAJMUDAR, J.]           313

      being utilised in production of consumer goods. When they are to be A
      imported in India and when they claim exemption for the condition of
      Notification issued by the Central Government under Section 25 of the
      Customs Act, the test for checking their colour as laid down by the
      exemption Notification has necessarily to be as per the Indian Standard
      method and test laid down by the Indian Standards Institution. In this
      connection, we may refer to the decision in the case Union ofIndia v. Delhi B
...   Cloth and General Mills, [1963] Suppl. l SCR 586 which has taken the
      view that if method of testing any item of Central excise tariff is not
      mentioned, then Indian Standards Institution's method should be applied.
      Learned Counsel for the appellants submitted that strictly speaking this
      judgement may not apply to the facts of the present case as we are not
      concerned with any central excise tariff. Be that as it may, the fact remains C
      that the imported goods on which the appellants claim exemption from
      customs duty have to be ultimately disposed of in India and when the
      Indian Government Grants exemption on condition, the method to test
      whether the exemption is earned or not by these imported goods would
      obviously be the Indian me!Qod. Learned counsel for the respondents
      submitted that if a converse case is taken into consideration and if Indian D
      goods are exported to foreign countries and if they have to earn any
      exemption from duty imposed by foreign countries on such imports in their
      countries and if colour specification of such imported ·material is to be
      found out, the country of import, namely the foreign country would insist
      that the method to be adopted f¢r testing the imported goods should be the E
      method of testing adopted by the country and it would be no ground to say
      that the Indian goods imported in foreign countries met the requirement of
      the Indian specification thougl:j. they may not meet the requirement of
      specification laid down by the importing countries, for the simple reason
      that they have to meet the requirements of the importing country and not of
      India which is the exporting country. In the present case also, therefore, F
      when the importers are Indian they have to meet the requirement of
      exemption Notification issued by the Central Government. These imports
      must satisfy the test as laid down by the exemption Notification issued in
      India and when the Notification· is silent about the method for testing the
      colour of imported items, then the testing method adopted by the Indian
      Standards Institution would of necessity be applicable. It was then G
      contended by the learned counsel for the appellants in these remaining four
      appeals that IS 548 Part I was to be applied for testing the colour of tallow.
      The colour specification by the Notification was required to be tested on
      one inch cell on the lovibond scale expressed as Y + 5R. While in the
      present case the samples were tested on one half inch cell and, therefore,
      the Custom House results should not be relied upon. It is not possible to H
     314                  SUPREME COURT REPORTS              [1994) SUPP. 6 S.C.R

A    agree with this contention. As we have discussed earlier as the appellants
     wanted refund of duty on their imported goods, they should have made
    efforts to rebut the result of Custom House. That they did not do but even
    that apart as noted in paragraph 38 of the impugned judgement the Tribunal
    found that even when Iovibond one inch cell was adopted, if the imported
    tallow was tested in unbleached form in which it was imported then its
B colour deepening would be 34 to 36 which would be more than 20 as
    required by the second condition of the colour specification. The main
    argument of the appellants was that American method should have been
    followed as observed by the Appellate Collector when the exemption
    Notification is silent about the said method. We, therefore, concur with the
    view of the Tribunal that there was no occasion to test the appellants'
C samples of tallow after bleaching as that was not the method of IS 548 Part
    I which was holding the field and as such pre-bleaching and refining could
    not be done pursuant to the American method which was not applicable to
    the facts of the present case and even by taking one inch cell testing on
    lovibond IS 548 method would have resulted in the samples showing colour
  · deepening to the extent of 34 to 36 on the basis of Y + SR which would not
D satisfy condition No. 2. The appellants cannot have any real grievance in
    this connection.

          Before parting we may note one submission of the learned counsel.
     They submitted that laying down of condition No. 2 in Notification dated,
     2.8.1976 was a clear error on the part of the Central Government which was
E   corrected by them by the latter Notification dated 2.9.1978 and, therefore,
    the latter Notification be treated as clarificatory Notification read with
    above Notification of 2.8.1976. it is not possible to agree as the disputed
    imports with which we concerned are prior to 2.9.1978. They are, therefore,
    covered by the earlier Notification of 1976. It is true that the Tribunal by
    noting these submissions has observed in paragraph 35 of the judgement
F   that the colour specification was an error and that the error be removed but
    for that reason it could not ignore the colour specification when it was the
    part of the law. We entirely agree with the view of the Tribunal that even if
    the Central Government corrected its error about condition No. 2 from
    2.9.1978 by issuing a fresh Notification, the earlier color specification
    requirement remained operative for imports made by the concerned
G
    importers prior to 2.9.1978 when the earlier Notification dated 2.8.1976
    was holding the field. The latter Notification cannot be said to be merely
    clarificatory Notification nor can it have any retrospective effect. It is a
    fresh Notification laying down fresh condition deleting the earlier condition
    No. 2 about the colour specification. Hence this submission is of no avail to
H   the learned counsel for the appellants.
                OIL IND. (P) LTD. v. U. 0. I. [MAJMUDAR, J.]            315

    For all these reasons, there is no substance in these appeals and they are A
accordingly dismissed. In the facts and circumstances of the case, there will
be no order as to costs.

G.N.                                                    Appeals dismissed.