Full Judgment Text
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PETITIONER:
ADDL. COLLECTOR OF CUSTOMS, CALCUTTA & ORS.
Vs.
RESPONDENT:
BEST & COMPANY
DATE OF JUDGMENT:
23/10/1970
BENCH:
SHAH, J.C.
BENCH:
SHAH, J.C.
HEGDE, K.S.
GROVER, A.N.
CITATION:
1971 AIR 170 1971 SCR (2) 681
1970 SCC (3) 136
ACT:
Imports & Exports (Control) Act 18 of 1947-Imports
(Control), Order 1955 issued under ss. 3 and 4A of Act-Sea
Customs Act 8 of 1878-S. 3 of Act 18 of 1947 providing that
goods to which an order under S. 3 (1) applied would be
deemed to be goods whose import & exports prohibited under
s. 19 of Act 8 of 1878-Contravention of s. 19 punish-able by
confiscation of goods and penalty under s. 167(8) of Act 8
of 1878-13 of 1955 Order prohibiting import of specified
goods except under licence issued by Central Government-
Contravention of conditions of licence punishable under s. 5
of Act 18 of 1947 as amended by Act 4 of 1960-Whether goods,
imported against conditions of licence can be confiscated
and penalty imposed on the offender under s. 5 of Act 18 of
1947 read with s. 167(8) of Act 8 of 1879.
HEADNOTE:
Under s. 3 of Imports & Exports Control Act 18 of 1947 all
goods to which any order under sub-s. (1) applied shall be
deemed to be goods of which the Import & Export has been
prohibited under s. 19 of the Sea. Customs Act 8 of 1878,
and all the provisions of.that Act shall have effect
accordingly. In exercise of power conferred by ss. 3 and 4A
of the Act 18 of 1947 the Central Government issued the
Imports control) Order 1955. Clause 3 of the Order
prevented the importation of any goods of the description
specified in Schedule except under and in accordance with a
licence or a customs clearance permit granted by the Central
Government or by any officer specified in Sch. II. Section
5 of Act 18 of 1947 as originally enacted provided : "If any
person contravenes any order made or deemed to have been
made under the Act, he shall without any prejudice to any
confiscation or penalty to which he may be liable under the
provisions of the Sea Customs Act 1878, as applied by sub-s.
2@ of s. 3 be punishable with imprisonment for a term which
may extend to one year, or with fine, or with both." By the
Imports & Exports (Control) Amendment Act 4 of 1960
contravention of any conditions of a licence ranted in
accordance with The terms of any order passed under the Act
was also made punishable under s. 5.
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The respondents imported certain goods from West Germany
under licence granted by the Ministry of Commerce.
According to the Government the goods imported were in
excess of the terms of the licence and accordingly the
respondents were charged with having committed’ offences
under s. 167(8) ’read with s. 3(2) of Act 18 of 1947 and the
a good s imported by them were confiscated. In lieu of the
confiscation, however, a fine of Rs. 20,000/- was imposed an
the respondents. A personal penalty of Rs. 25000/- was also
imposed. The respondents filed’ a writ petition in the High
Court which was dismissed by the Single Judge but ’allowed
by the Division Bench. With certificate the Collector of
Customs appealed. The only question for consideration was
whether for breach of a condition of the licence penalty
may be imposed under s. 5 of Act 18 of 1947 read with s.
167(8) of Act 8 of 1878.
HELD: The appeal must be dismissed.
For breach of any condition of a licence it is open to the
authorities. under s. 5 of Act 18 of 1947 as amended, to
direct prosecution but no,
682
order confiscating goods and imposing penalty in lieu
thereof could be made. The order of confiscation could only
be made under s. 167 cl. 8 ,of Act 8 of 1878 : in terms cl.
8 of s. 167 provides for confiscation of the goods
importation or exportation of which is for the time being
prohibited or restricted by or under Ch. IV of the Sea
Customs Act, 1878. The notification of which the
contravention was alleged was not issued under s. 19 of the
Sea Customs Act 1878 but under the Imports & Exports
(Control) Act 1947. The High Court was therefore right in
holding that the scope of power under the Sea Customs Act
was not enlarged by the amendment to s. 5 of the Imports &
Exports (Control) Act. There is nothing in the amended s. 5
of the imports & Exports (Control) Act which warrants the
view that the provisions of the Sea Customs Act, 1878, may
be invoked to punish the breach of a condition of a licence
granted under the Imports & Export-, (Control) Act, 1947.
[686 B-C]
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 Janiavani and S. P. Nayar for the appellants.
The respondent did not a pear.
The Judgment of the Court was delivered by
Shah, 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 certain
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 import
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
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the bill of entry.
On June 20, 1961 the Customs authorities issued a notice
requiring the respondents to show cause why penal action
should not be taken against them under s. 167(8) of ’the Sea
Customs Act, 1878, as being persons concerned in the
unauthorised importation of the goods. This notice was
amended by notice ,dated September 21, 1961, whereby the
respondents were charged with having committed offences
under S. 167(8) read with s. 3(2) of the Imports and
Exports (Control) Act, 1947, for
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illegally importing 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 17, 1962, directed confiscation of the
machinery under S. 167(8) of the Sea Customs Act read with
s. 3 (2) of the Imports and Exports (Control) Act, 1947, and
permitted the respondents to pay a fine of Rs. 20,000/- in
lieu of confiscation. A personal penalty of Rs. 25,000/-
was also imposed on the respondents.
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.
A Single Judge of the Calcutta High Court dismissed 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 determined is whether
for breach of a condition of the licence penalty may be
imposed under S. 5 of the Imports and Exports (Control) Act,
1947, 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 of the Schedule are punishable
to the 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. Penalties
------------------------------------------------------------
8. If any goods, the importation or 18 & 19 such goods
shall be liable to be exportation of which is for the confiscated
;
and any person con-time being prohibited or resting- herded
in any such offence, shall acted by or under Chapter IV of be
liable to a penalty not exceed this Act, be imported into or
axing three times the value of the ported from India
contrary to goods, or not exceeding one such prohibition
or restriction; or thousand rupees,
--------------------------------------------------------------
Chapter IV of the Sea Customs Act, 1878, contains three sec-
tions : ss. 1 8, 19 & 19A. By S. 18 an absolute prohibition
is unposed in respect of importation of goods by land or by
sea specified therein. Section 19 provides that the Central
Government may from time to time, by notification in the
Official Gazette prohibit or restrict the bringing or taking
by’ sea or by
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land goods of any specified description into or our of India
across any customs frontier as defined by the Central
Government.
The Central Legislature enacted the Imports and Exports
(Control) Act, 1947, with the object of authorising
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prohibition and control on imports and exports. By s. 3 of
that Act it was provided.
"(1) The Central Government may, by order pub-
lished 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 of 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, 1947, as originally enacted, provided :
"If any person contravenes any order made or
deemed to have been made under this Act, he
shall, without prejudice to any confiscation
or penalty to which he may be liable under the
provisions of 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"
6 85
In exercise of the power conferred by ss. 3 and 4-A of the
Imports and Exports (Control) Act, 1947, the Central Govern-
ment 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 any officer
specified in Sch. II. 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 they were claimed to have
been imported, then, without prejudice to any action that
may be taken against 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
goods. 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 licence
by more than 5 %. It was the, case of the Customs I
authorities that the real value of the machinery imported
exceeded the declared value, and on that account the
respondents had infringed the conditions of the licence. In
East India Commercial Company Ltd., Calcutta & Anr. v. The
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Collector of Customs, Calcutta(") 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 goods were imported in con-
travention 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. Poriaswami Nadar (2). These cases were
decided on the interpretation of s. 5, of the Imports and
Exports (Control) Act, 1947, 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 or 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) L196313S.C.R.338.
(2) 19591 1 S.C.R. 65.
686
In the present case the Customs authorities did not direct
section for contravention of any condition of a licence
directed confiscation of the machinery and imposed penalty
lieu thereof. But on the terms of S. 5 as amended, the
right impose penalty for contravention of any condition of a
may be exercised under the Sea Customs Act, 1878, and under
the Imports and Exports (Control) Act, 1947. For are of any
condition of a licence, it is open to the authorities direct
prosecution, but no order confiscating goods and ring
penalty in lieu thereof could be made. The order of
fiscal could only be made under s. 167 cl. 8 of the Sea
atoms Act, 1878 : in terms cl. 8 of S. 167 provides for
action of the goods importation or exportation of which is
the time being prohibited or restricted by or under Ch. IV
the Sea Customs Act, 1878. The notification of which
contravention is said to have began made, is not issued
under 19 of the Sea Customs Act, but under the Imports and
(Control) Act, 1947. It has not been urged before us, a
rightly, that penalty of confiscation is incurred under the
pro sons of the Sea Customs Act, 1878, for breach of the con
lions of the licence.
In our judgment, the High Court was right in holding the
scope of power under the Sea Customs Act was not enlarged by
the amendment to S. 5 of the Imports and Exports (Control)
Act, and there is nothing in the amended s. 5 of the Imports
and Exports (Control) Act which warrants the view that
provisions of the Sea Customs Act, 1878, may be invoked
punish the breach of a condition of a licence granted under
Imports and Exports (Control) Act, 1947.
The appeal fails and is dismissed. There will be no order
as to costs.
G.C. Appeal dismissed
687