Girdharilal Bansidhar v. Union of India

.Ayyangar, J.

Learned Counsel cannot therefore derive any support from this decision. Besides, what we have said earlier should suffice to show that· the conclusion reached by. the authority that the offence under s. 167(8) has been made out, is not incorrect. This apart, we must emphasise that a court deal-ing with petition under Art. 226 is not sitting in appeal over the decision of the Customs authorities and therefore the correctness of. the conclusion .reached. by those authorities on the appreciation· of the several items_ in the Hand-book or in the Indian Tariff Act which· is referred to in these items, is not a matter which falls within the writ jurisdiction of the High Court. There is, here, no complaint of any pro-cedural irregularity of the kind which would invalidate the order, for the order of the Collector shows by its contents that there has been an elaborate investigation and personal hearing accorded before the order now impugned was passed.

Learned Counsel next submitted that the Collector of Customs had taken into consideration the importation of the washers by the Nawanagar Industries Ltd. in arriving at the conclusion that the appellant had violated s. 167(8) of the Sea Customs Act and that as in the notice that was serv. ed upon him to show cause this was not adverted to, the order adjudging confiscation was illegal and void for the reason that there had been a violation of the principles of natural . justice and procedural irregularity in the hearing. We are not impressed by this argument. This submission pro-ceeds upon a total misapprehension of the significance of the separate import of the washers by the sister concern. That import was not and could not be the subject of any charge against the appellants, and the appellants were not punished for that importation. It was merely evidence to confirm the conclusion reached by the Collector that the nuts and bolts imported were in reality the actual components of the Jack-son type belt fastener whose importation was prohibited. The charge which the appellant was called on to answer did specify the nature of the offence which he was alleged to have contravened, and if evidence which the appellant could have rebutted .was brought on record and considered in his presence and that evidence conclusively proved the real nature of the articles imported, there could certainly be no justifi-able complaint of violation of the principles of natural jus-tice. The misdescription of the article imported in the Bill · of Entry having. practically been admitted and there being not much dispute that the . goods imported were really com-1964 ponents of the Jackson type single belt fasteners, nothing Git'tlllarilal more was needed to establish a contravention of s. 167(8). Bansidlw The reference therefore to the Nawanagar Industries Ltd. v. Un.ion of Ind.ia which imported the washers merely confirmed the finding.

In these circumstances we do not consider that there is any A11!1"ngor, J. substance in this objection.

The result is that this appeal fails and is dismissed with costs.

Appeal dismissed.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 318 of 1962.

Appeal by special leave from the judgment and order dated November 27, 1959 of the Punjab High Court <Cir· cuit Bench) at Delhi in Civil Writ Petition No. 545-D of 1959.

Purshottam Trikamdas, M. V. Goswami and B. C.

Misra, for the appellant.

W. S. Barlingay and R. H. Dhebar. for the respondent.

March 6, 1964. The Judgment of the Court was delivered by

AYYANGAR, J.--There are no merits in this appeal by special leave and it deserves tv be dismissed. The appellant obtained, in November 1951, an import licence from the Joint Chief Controller of Imports at Calcutta, for im-porting "iron and steel bolts, nuts. set screws, machine screws and machine studs, excluding bolts, nuts and screws adapted for use on cycles". In purported conformity with this licence the appellant imported from Japan through the Bedi port 221 cases of bolts and nuts during the period April 4. 1952 to July 14. 1952. The cases were described in the Bills of Entry which he filed as "Stove Bolts and Nuts,. and he produced the import licence; of November 1951 as his authority to clear the goods. One hundred and ninety-two of these cases were cleared out of the port customs but before the rest of the 89 cases could be cleared, the Customs autho-rities got suspicious that the goods were 'mis-described and though called '·Stove Bolts and Nuts" in the invoices and relative documents they were really identifiable parts of bolts and nuts of the "Jackson Type sinl!le bolt oval platebelt fasteners" whose importation . had been prohibited by a Noti.fication. <?f the Ministry of Trade issued in January 1952.

Their susp1c10ns got confirmed after examination of the samples of the. nuts and bolts imported and thereafter a notice was issued to the appellant to show cause why he should not be proceeded against (a) for mis-describing the

64 StJPHE?IIE COURT .REPORTS [1964)

1964 goods as '"stove bolts and nuts" and <2) for importing and ·Girdharilal attempting to import goods without a proper import licence Btln8«lkar this being an offence under s. 167(8) of the Sea Customs Act.

v. The appellant showed cause ·and in the written flleas which Union of India he iiled, he raised two defences; that the description of (I) .A. yyangar, J_. the goods as "stove and nuts" was merely a dcscrip-

tian given by the manufacturers in their invoices and he him-self not being acquainted with the technical details could not be held responsible for the description given in the in-voices which was copied in the Bill of Entry not being pre-cise or exact and (2) that even if the bolts and nuts which he imported were identifiable parts of the "single bolt belt fasteners" whose importation was banned, there had been, on a proper construction of the import licence, read in con-junction with the Import Trade Regulations under which it was issued, no contravention since the ban on importation by the notification was confined to a complete "Jackson type single bolt belt fastener" and did not extend to the importation of the component parts of such a belt fastener.

These two defences were examined by the Collector of Central Excise. As regards the first he found from the cor-repondence exchanged between the appellant and his foreign suppliers and produced by· the appellant himself in his de-fence at the hearing, that the name ··stove bolts and nuts" h?.d been decided upon by the appe!lant himself after sam-ples of the nuts and bolts which he desired to import had been received and. examined by him. Practically therefore during the hearing before the Collector the appellant con-ceded that the name "stove bolts and nuts" was a misdescrip-tion of the articles which he actually imported. The next question was whether the appellant was guilty of an offence of the nature described in s. 16718) of the Sea Customs Act. The Collector recorded a finding that the appellant was guilty of a contravention of this provision which reads:

.. If any goods, the importation or exportation of which is for the time being prohibited or rest-ricted by or under. Chapter IV of this Act, be imported into or exported from India ·contrary to such prohibition or restriction; or if any attempt be made so to import or export any such goods~ ...... '·'

In reaching this finding the Collector was satisfied from the samples which were forwarded . to the appellant and which were approved by him before finalising the indent, that the appellant was really ordering and importing nuts and bolts which were identifiable components of "Single bolt belt fasteners" whose importation was prohibited. He arrived at this c.onclusion because (I) the bolts and screws imported 1964 by the appellant were those specially adapted by reason of Girdlsarilol their structure and details for use as "single bolt belt faste-Ban.Miia• ners" and (2) these nuts and bolts could not be put to any v. use other than as· components of a belt fastener of the type Union of India whose import was prohibited. .Ayyangar, J.

In further support of his conclus_ion tbat the appeJJant really intended to evade the prohibition imposed by the Notification of January 1952 by which the importation of "single bolt belt fasteners" was prohibited, the Collector re-ferred to the fact that tbese single bolt belt fasteners were composed of three components (!) a bolt (2) a nut and (3) washers, The washers to fit into the bolts and nuts imported by the appellant were found· to have been separately import-ed by a firm called Nawanagar Industries Ltd. which was owned or controlled by close relations of the appellant. Having thus received confirmation about the real intention of the appellant to evade the prohibition contained in the Notification and thus contravene the provisions of s. 167(8) of the Sea Customs Act, the Collector imposed the penalty of confiscation of the goods and gave the owner under s. 183 of the Sea Customs Act)he option to pay a fine of Rs. 51.000 to redeem the confiscated goods. He also imposed a per-sonal penalty of Rs. 1.000 on the appellant under s. 167(37)(c) of the Sea Customs Act for misdescribing the goods in the Bills of Entries which he had filed. The appel-lant filed an appeal to the Central Board of Revenue which was dismissed.

The argument before the appellant authority again was that what was prohibited was an assembled "Jackson Type single belt oval plate belt fasteners" but that this notifica-tion could not be read as imposing a ban on the importation of the parts of such a belt fastener though these parts may be identifiable and the parts could have no use other than as components of the article whose importation was prohi-bited. This submission was rejected, and appeal was dismis-sed. Thereafter the appellant applied to the High Court ·of Punjab for the issue of a writ of certiorari under Art. 226 of the Constitution and this having been dismissed in limine, moved this Court for special leave which was granted. That is how the appeal is before us. .

Two points were urged by Mr. Purshottam on behalf of the appellant. The first was that the appellant having been granted a licence to import "nuts and bolts" falling under item 22 of Part I of the Import Trade Control Hand-book for the relevant year, the appellant was entitled to import iron and steel bolts and nuts, whatever be the purpose they

L'P(D)ISCI-~

1964 served. The only limitation imposed upon the appellant by 01rdharilal the import licence which was granted to him and which re-Ba""idhar produced the terms of Entry 22 in the Hand-book was that

v. he could not import bolts and nuts adapted for use on cycles. Union of Indio The limitation thus imposed, it was urged, also indicated

A.yyoo.gar, J • that if the nuts and bolts were adapted for use on articles

other than on cycles they could still import them unless the importation not merely of the other article but its compo-nents was also prohibited or restricted. In this connection our attention was drawn to item 28 of Part II in the same Hand-book reading 'Belting for machinery, all sorts, includ-ing belt laces and belt fasteners'. The Notification dated January 12, 1952 was a clarification issued in respect of licensing policy for January-June, 1952. Dealing with serial No. 28 of Part II which we have extracted just now, the notification stated: ·

"Jackson type. oval plate belt fasteners (other than single bolt). General licences will be granted freely subject to the provisions of Public Notice No. 189-ITC(PN)/51, dated the 28th December, 1951.

Jackson type oval plate sing!~ bolt belt fasteners. No imports will be granted from any source."

It was not disputed that having regard to the terms of the import licence issued to the appellant the Notification as regards the prohibition against the importation of "Jackson Oval Plate Single Bolt belt fasteners" would apply to the appellant's licence and these belt fasteners could not be imported after January. 1952. For the import licence specifically stated:

"This licence is granted under Government of India, Ministry of Commerce, Notification No. 23-ITC I 43, dated the 1st July, 1943, and is without pre-judice to the application of any other prohibi-tion or regulation affecting the importation of the goods which may be in force at the time of their arrival."

The point, however, sought to be made was that the components of such a belt fastener could. still be imported because it was said that the scheme of the Import Trade Control Hand-book was to specify wherever it was so in-tended "component parts" along with the articles of which they formed components, when a restriction or prohibition was intended to be imposed upon them also. It is, no doubt, true that in some cases component parts are specifically in-cluded in some of the items in the Hand-book. It might very well be that this feature might be explained on the ground '. '-,'

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7 S.C.R. SUPRE~IE COURT REPORTS'--. ·---~· 67 -

of the specification being by. way of , abundant caution, or 1964 possibly because in them the coniponenf parts might have . an independent use other .than as· components. of the articles Girdliarilal

specified. It a.EJlears to us that it does not stand to reason Bamidlia,. v. that• a component part which has no use other than as a UniQ71. of India component of an article whose importation is prohibited is !"'J- - Ayyanga,., J. not included in a ban or restriction as regards the importa-tion of that article. Expressed in other terms, we cannot ac-cede to the position tha.t it is the intention of the rule that im-porters are permitted to do indirectly what they are forbid-den to do directly, and that it permits the importation sepa-rately of components which have no use other than as com-ponents of an article whose importation is prohibited, and that an importer is thereby enabled to assemble them here as a complete article though if. they were assembled beyond the Customs Frontiers the importation of the assembled arti-cle into India is prohibited. Learned Counsel, however, relied upon an unreported judgment of the Bombay High Court delivered· by Mr. Justice Mudholkar when a judge of that Court, in Appeal No. 4 of 1959 (D. P: Anand v. M fs. T. M.

Thakore & Co.) in support of his submission that a ban on a completed article, having regard to the phraseology em-ployed in the Hand-book cannot be, read as a restriction or prohibition of the separate importation . of the component parts which when assembled result in. the article whose· im-port is prohibited. We do not read the judgment in the man-ner suggested by learned Counsel. The learned Judge in the judgment recorded an admission that the articles imported which were components of _a motor-bicycle, .would not .when assembled form a complete cycle which was the article whose importation was . restricted, because ·of· the lack: of certain essential parts which were admittedly not available in India and could not be imported.

The next submission of the learned Counsel was that the decision of the Customs Collector was vitiated by a patent error, in that he misoonstrued the scope of Entry 22 of Part I of the Import Trade Control Hand-book. In support of this submission the learned Counsel invited our attention to the decision of this Court in A. V. Venkateswaran Collector of Customs. Bombay v. Ramchand Sobhraj Wadhwani and A nr.('). We see no force in this argument. The decision ·of this Court referred to proceeded on the basis set out on page 757 of the Report where this Court said:·

"The learned Solicitor-General appearing for the

· appellant argued the appeal on the basis that

the view of the learned Judges of the Bombay "· ., r . '

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68 SUPREME COURT .. REPORTS :[1964]

1961 High Court that· on any reasonable interpreta-Ginllwrilal . tion of the· items in ·the· Schedule to the Tariff Ba'Midhar Act the consignment imported by the respondent

v.

Unio-n Of India · could have been foible only to a duty of 30 per cent under item 45(3) was correct." •