Kerala High Court
M.A. Kuruvilla vs Union Of India (Uoi) on 11 November, 1998
Equivalent citations: 1999(106)ELT21(KER)
ORDER P. Shanmugan, J.
1. Petitioner challenges the adjudication order of the Deputy Commissioner of Customs as confirmed by the appellate order of the Commissioner of Customs (Appeals) and the order in revision by the Government of India. By the adjudication order the import of Water Scooter was confiscated and allowed to be redeemed on payment of a fine of Rs. 3,75,000/- and a penalty of Rs. 50,000/-. The said order was confirmed with a modification reducing the redemption fine to Rs. 3 lakhs by the appellate authority and the revisional authority while upholding the redemption fine reducing the personal penalty to Rs. 40,000/-. The original petition is against this order.
2. Learned Standing Counsel appearing on behalf of the Department raised a preliminary contention on the maintainability of the writ petition under Article 226 of the Constitution of India. In support of his objection he has referred to the judgment in Indo-China Steam Navigation Co.v. ]asjit Singh - [AIR 1964 SC 1140] wherein the Supreme Court held that the question as to the propriety of the fine imposed has been examined by the appellate and the revisional authorities. In such a case, they cannot be heard to complain against the impugned order of fine in an appeal under Article 136, when no question of principle or law is involved. The authorities constituted under the Customs Act are acting under the relevant provisions of the said Act as the constitution of Tribunals under Article 136 of the Constitution because they are invested with the judicial power of the State and are required to act judicially. Therefore the writ petition under Article 226 of the Constitution of India is not maintainable. Since the legal questions as to the applicability of relevant rules are raised and argued, the original petition is maintainable.
3. The petitioner has brought one water scooter model "Yamaha W.C.T. 1100 U1100 Triple" valued at Rs. 3.75 lakhs as unaccompanied baggage on his claim of transfer of residence concession in terms of Baggage Rules, 1994. The only question that arises for consideration is whether this import requires licence under Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992. The case of the petitioner is that since it was brought under transfer of residence he is entitled for exemption.
4. Section 3 of the Foreign Trade (Development and Regulation) Act empowers the Government to make provision for prohibiting, restricting or otherwise regulating the import or export of goods. Paragraph 156J(2) of the Exim Policy issued under Section 3 of the said Act restricts the import of the ships, trawlers, boats and other water transport crafts. These items are not permitted to be imported except permitted a licence. Therefore there is a clear prohibition against the import of the Water Scooter which is a water transport crafts without a licence. The contention on behalf of the petitioner is that Baggage Rules, 1994 framed under Section 79 of the Customs Act exempt from duty of personal and household effects. The said exemption will not apply in the case of certain articles like "vessels". The argument is that since there is no exemption from duty they can import it and clear it on payment duty. I am unable to draw such a conclusion Rule 16 of the Baggage Rules is as follows :
"Exemption from duty on personal and household effects :-
The personal and household effects of a person on bona fide transfer of residence to India, shall be exempted from duty: Provided that -
(a) no such exemption shall apply in respect of articles specified in Appendices A and B to these Rules; and
(b) the articles have been in his or his family's possession and use abroad for a minimum period of one year.
Explanation. - For the purpose of this rule, the expression "personal and household effects" shall not include jewellery of which the value is mainly on account of gold content, as is in excess of the value of ten thousand rupees in case of male passenger and twenty thousand rupees in the case of female passenger. The said limits shall, however, not apply to the jewellery in respect of which the Assistant Commissioner of Customs is satisfied on the basis of the evidence produced that it had been taken out of India by the passenger or by a member of his or her family.
2. In addition to exemption from duty provided under Sub-rule (1), a person on bona fide transfer of residence to India shall also be entitled to import free of duty articles for his use or for the use of his family or for making gifts or souvenirs upto the value limits specified in Rule 5 subject to the conditions and limitations specified in the said Rule 5".
The exemption from duty has its own exception in respect of several articles as set out in Appendices A and B. From a reading of the rule it does not follow that no licence need be obtained for import. The Baggage Rules will not have an overriding effect on the orders passed under Foreign Trade (Development and Regulation) Act. The order of Ministry of Commerce dated 31-12-1993 called Foreign Trade (Exemption from Application of Rules in certain cases) Order 1993, which exempts from the application of import control orders states that those rules were not applied to the import of any goods by the person as passenger baggage to the extent admissible under the Baggage Rules. This Rule has its exception under every head. Similarly Baggage Rules, 1994 has certain exceptions under proviso to Rule 16. No exemption shall be available to article like Fire Arms, Air crafts etc. The Baggage Rules framed under Section 79(2) of the Customs Act deals only with conditions subject to which any baggage may be passed free of duty [see Section 79(2)(c)]. Baggage Rules do not and cannot permit to import articles without licence if it is so restricted under Foreign Trade Act and Import Control Orders. Therefore exemption in payment of duty does not mean that no licence need be obtained which is required to be taken under Paragraph 156J(2) of the Exim Policy. Hence the import of this article requires licence.
5. The authorities have also considered the question whether the Water Scooter can be brought under "personal and household effects". The appellate authority found that it is a type of water transport used for joy-riding and it can be called as a pleasure craft. It is an expensive consumer item, the import of which requires a valid import licence which the appellant does not possess. The said item is one of the bonafide baggage. Proviso to Rule 16 of the Baggage Rules also requires that the articles should have been in use abroad for a minimum period of one year. According to learned Counsel for the Department, no records whatsoever have produced to establish the personal use of the scooter. I find much force in the said contention. Petitioner had not produced any material to show that it is personal effect in use for the minimum period.
6. I am of the view that the authorities have concurrently found that the article requires a licence. The article should not have been imported without a licence and Baggage Rules will not apply in the case of this article. For the above reasons I do not find any illegality in the orders passed by the authorities below. Hence the original petition fails and it is dismissed.