Addl. Collector of Customs, Calcutta & Ors. v. Best & Company

Judgment

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2003 .of 1966. Appeal from the judgment and order dated December 18, 1964 of the Calcutta High Court in Appeal No. 254 of 1963. Ram Jan;ava~ and S. P. Nayar for the appellants. The respondent did not appear. The Judgment of the Court was delivered by Sbab, J. On March 31, 1959 the Ministry of Commerce and Industry, Government of India, granted to the respondents .a licence permitting them to import from West Germany c.ertain machinery described therein of the maximum C.I.F. value of Rs. 45,000/-. Condition No. 1 of the licence provided that: "The . . . application is accepted and im pDrt licence is hereby granted having quantity and value as the limiting factors and is not valid for clearance if the actual value of any item exceeds the C.I.F. value indicated in the licence by more than 5%." The respondents submitted a bill of entry dated July 1, 1960, disclosing the C.I.F. value of the consignment as Rs. 45,179-92 inclusive of landing charges, and cleared the consignment after paying duty assessed by the Customs authorities on the real value <Of the goods as disclosed in the bill of entry.

On June 20, 1961 the Customs authorities issued a notice requiring the respondents to show cause why penal actioo should not be taken against them under s. 167 ( 8) of 'the Sea Customs Act, 18'18, as . being persons concerned in the unauthorised importation of the goods. This notice was ame11ded by notice dated September 21, 1961, whereby the respon'dents were charg- ~d with having committed offences under s. 167(8) read with s. 3(2) of the Imports and Exports (Control) Act, 1947, for C:,"OLLECTOR CUSTOMS v. BEST & CO. (Shah. ]. ) illegally linporting the machinery., The respondents claimed that no breach of the conditions of the licence was committed. The Additional Collector of Customs, Calcutta, by order dated March I 7, I 962, detected confiscation of the machinery under s. I 67 ( 8) of the Sea Customs Act read with s. 3 (2) of the Imports a.nd Exports (Control) Act, 1947, and permitted the respondents 8 to pay a fine of Rs. 20,000/- in lieu of confiscation.

A personal penalty of Rs. 25,000/- was also imposed on the respondoots. The respondents then moved a petition before the High Court of Calcutta under Art. 226 of the Constitution praying for a writ quashing the adjudication order dated March 17, 1962. Single Judge of the Calcutta High Comt dismisesd the petition, but in appeal under the Letters Patent the High Court reversed the decision and issued a Writ of certiorari quashing the order dated March 17, 1962. The Additional Collector of Customs, Calcutta, has appealed to this Court with certificate granted by the High Court. The only question which falls to be determmed is whether for breach of a condition cf the licemce penalty may be imposed under s. 5 of the Imports and Exports (Control) Act, 194'1, read with the Sea Customs Act, 1878. The relevant statutory provisions may first be noticed. Under s.

167 of the Sea Customs Act, 1878, the offences mentioned in the first column cf the Schedule are punishable to tl\e extent mentioned in the third column of the same with reference to such offences respectively :- Section of this Act to which offence Offences. has reference. ~- If any goods, the importation or 18 & 19 exp('lrtation of which is for the time being prohibitc:d or restricted by or under Chapter IV of this Act, be imported into or exported from India contrary to such prohibition or restriction; or Penalties such goods shall be liable to be cohfiscated; and any person concerned in any such offence, shall be liable to a penalty'not exceeding three dmes the value of the goods, or not exceeding one thousand rupees, <;hapter IV of the Sea, Customs Act, 18 7 8, contains three sec- !tons: ss. 18, 19 & 19A. By s. 18 an absolute prohibition "is 1mp~sed in re~pect of ,importation of_ goods by land or by sea specified therem.

Section 19 provides that the Central Government may from time to time, by notification ~ the Official Gazette prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or our of lnciia across any customs frontier as defined by the Central Government. The Central Legislature enacted the Imports· ~ Exports (Control) Act, 1947, with the object ot authorising prohibition and control on imports and exports. By s. 3 of that Act it was provided: " (I) 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 or 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 oi which the import or export has been prohibited under section 19 of the Sea Customs Act, 1878, and all the provisions of that Act shall have effect accordingly, except that section 183 thereof shall have effect as if for the word "shall" therein the word "may" were substituted. (3) Section 5 of the Imports and Exports (Control) Act, 194 7, as originally enacted, prividcd :

"If any person contravenes any order made or deemed to have been made u.nder this Ac't, he shall, without prejudice to any confiscation or penalty to which he may be liable under the provisions qf. the Sea Customs Act, 1878, as applied by sub-section (2) of section 3, be punishable with imprisonment for a term which may extend· to one year, or with fine, or with both." COLLECTOR CUSTOMS v. BEST & CO. (Shah. J.) In exercise of the power conferred by ss. 3 and 4-A of the hnports aind Exports (Control) Act, 194 7, the Central Government issued the Imports (Control) Order, 1955. Clause 3 of the Imports (Control) Order prevented importation of any goods of the description specified in Sch. I, except under, and in accordance with, a licence or a customs clearance permit granted by the Central Government or by aiUy officer specified in Sch. TI. By sub-cl. (2) of cl.

3 it was provided that if in any case, it was found ·that the goods imported under a licence did not conform to the description given in the licence or were shipped prior to the date of issue of the licence under which fuey were claimed to have been imported, then, without prejudice·to a.ny action that may be taken again.st the licensee under the Sea Customs Act, 1878, in respect of the said importation, the licence may be treated as having been utilised for importing the said good>. By cl. 5 certain conditions. could be imposed by the Licensing Authority issuing a licence. It may be recalled that one of the conditions of the licence issued by the respondent was that the value .of any item shall not exceed the C.I.F. value indicated in the ltcence by more than 5%. It was the case of the Customs authorities that the real value of the machinery imported exceeded the aeclared value, and on that account the respondents had infringed the conditions of the licence.

In East India Commerclal Company Ltd., Calcutta & Anr. v. The Collector of Customs, Calcutta(1) this Court held that s. 167 cl. 8 of the Sea Customs Act, 1878, read with s. 3(2) of the Imports and Exports (Control) Act, 1947, authorised the imposition of penalty, if gcods were imported in co.ntravention of any order under the Imports and Exports (Control) Act, 1947 : but the section did not, expressly or by implication authorise confiscation of goods imported under a valid licence on the ground that a condition of the licence not imposed by the order was infringed. This view was reiterated by this Court in Boothalinga Agencies v. T. C. Porfaswami Nadar( 2 ). These cases were decided on the tnterpretation of s. 5, of the Imports and Exports (Control) Act, 194 7, as it stood before it was amended by Act 4 of 1960 By the Imports and Exports (Control) Amendment Act 4 of 1960, in s.

5, after the words 'any order made er deemed to have been made under this Act,." the words "or any condition of a licence granted under any such order" were inserted. Contravention of any condition of a licence granted under any order was therefore liable to be punished under s. 5 as amended. (1) t1963) 3 S.C.R. 338. (2) [1959] 1 S.C.R. 65. (197 J J 2 S.C.R. fu the present case the Customs authorities did not direct pro· secution for contravention of any condition of a licence : they directed confiscation of the machinery and imposed penalty in lieu thereof. But on the terms of ~. 5 as amended, the right to impose penalty for contravcintion of any condition ·of a liccDCe may be exercised under the Sea Customs Act, 1878, and not under the Imports and Exports (Control) Act, 1947. For breach of any condition of a licence, it is open to the authorities to direct prosecution, but no order confiscating goods and imf.OS· ing penalty in lieu thereof could be made.

The order of confiscation could only be made under s. 167 cl. 8 of the Sea Customs Act, 1878 : in terms cl. 8 of s. 167 provides for confis· cation of the goods importation or exportation of which is for the time beiag prohibited or restricted by or under Ch. IV of the Sea Customs Act, 1878. The notification of which the contravention is said to have been made, is not issued under s. 19 of the Sea Customs Act, but under the Imports and Export5 (Control) Act, 1947. It has not been urged before us, and rightly, that penalty of confiscation is incurred under the provisions oi the Sea Customs Act, 1878, for breach of the conditions of the licence. In our judgment, the High Court was right in holding that the scope of power under the Sea Customs Act was lliot enlarged by the amendment to s. 5 of the Imports and Exports (Control) Act and there is nothinl( in the amended s. 5 of the Imports . and' Exports (Control)

Act which warrants the vi~w that the provisions of the Sea Custo~~ Act,, 1~78, may be mvok-ed. to puhlsh the breach of a condition of a lic~ce grq,nted under the Imports and Exports (Cotttrol) Act, 1947. The appeal fails and is dismissed. Th.ere will be no order as to costs. G.C. Appeal dismissed.