Bombay High Court
Xaca (India) Private Ltd. And Another vs Union Of India on 1 January, 1800
Equivalent citations: 1980(6)ELT227(BOM)
ORDER
1. The petitioner No. 1 is a Private Limited Company, while the petitioner No. 2 is one of the share-holders and Directors of the petitioner-Company. The petitioners are dealers in projectors and cinema equipments and spare parts thereof. The petitioner No. 1 Company are established importers, receiving their quota licences for the import of permissible item of projectors and cinema equipments under Serial No. 65(1-4)(ii) and 65(5)(i) Part V of the Import Trade Control Policy Schedule from time to time.
2. Serial No. 65(1-4)(ii) is for import of cinema machinery including studio equipments and projection and also including sound recording apparatus for the production of cinema films. The petitioners were granted import licence bearing No. P/E/0193018 for the import of cinema machinery and parts thereof as per Appendix 31 of April, 1971 to March, 1972 policy. In pursuance of this licence, the petitioners placed an order with M/s. Osram, a Company in the West Germany for import of HQV lamps for spectroscopy which were necessary parts of Ultraviolet Film Identification Units of value of Rs. 17,046/- against the said import licence. The said lamps fall under Serial Nos. 20 and 33 of Appendix 31 of the Red Book. The lamps were shipped as per the suppliers' Invoice dated August 3, 1971 and the suppliers' Invoice is annexed as Ex. B to the petition giving the description of the goods imported as HQV lamps for spectroscopy. The imported lamps arrived in Bombay Port some times in September 1971 and the petitioners filed a Bill of Entry on September 1, 1971. In the Bill of Entry, the goods were described as electric bulbs, HQV high pressure mercury vapour lamps.
3. The Assistant Collector of Customs, Bombay, served a Show Cause Notice on October 12, 1971 upon the petitioners to show cause why the goods imported should not be confiscated and the penalty imposed as the importation of the goods appears to be unauthorised. The Assistant Collector felt that the said lamps are studio electric projector bulbs and required specific licence under Serial No. 38-A(c)/II of the Import Trade Control Policy and were not covered by the import licences. The petitioners replied to the show cause notice by their reply dated October 25, 1971 and pointed out that they are entitled to import the goods in view of the provision of interchangeability laid down by the import policy of the year 1971-72. The Deputy Collector of Customs, Bombay, by his order dated November 22, 1971 rejected the claim made by the petitioners and ordered that the goods in question should be confiscated under section 111(d) of the Customs Act, 1962 read with section 3 of the Imports and Exports (Control) Act, 1947. The petitioners were given liberty under the provisions of section 125 of the Customs Act to pay a fine of Rs. 48,000/- and to clear the goods into town. According to the Deputy Collector, the provisions of interchangeability did not apply as the imported items did not figure as permissible items against Serial No. 38-A(c)/II of the Policy Book.
4. The petitioners carried an appeal before the Appellate Collector of Customs, Bombay. The petitioners made a specific case before the appellate authority that the goods imported are high pressure mercury vapour lamps which do not emit light and are not designed for such purposes. The petitioners stated that the lamps imported are ultraviolet lamps used for medical and laboratory usage and HQV lamps are used for spectroscopy as per the invoice. The petitioners stated that item 2(iii) against Serial No. 38-A (c)/II at page 135 of Section IV of the Red Book refers to lamps for spectroscopy to cover ultraviolet region and, therefore, the import was properly covered by the import licences issued by the department. The appellate authority, by its order dated August 19, 1972 dismissed the appeal holding that the provisions of interchangeability are not applicable s the goods being other than the studio and projector lamps. According to the appellate authority though the provisions of interchangeability were available at the relevant time as the petitioners hold a licence under Serial No. 65(1-4)(ii) of the Import Trade Control Policy, the same cannot be used for goods covered by Serial No. 38-A(c) of Section II of the Red Book.
5. The petitioners carried a revision before the Government of India against the order passed by the appellate authority but the said revision ended in dismissal. The Joint Secretary to the Government of India took the view by his order dated Mary 24, 1973 that the proper Indian Tariff Code Classification of the imported goods seems to be Serial No. 38-A(f)/II. According to the revisional authority, that being a residuary item and for the purpose of licence the items covered thereunder are not permitted to be imported, the claim made by the petitioners cannot be entertained. The petitioners have filed the present petition under Article 226 of the Constitution of India to challenge the correctness and legality of the order passed by the three authorities below.
6. Mr. Joshi, the learned counsel appearing in support of the petition, invited my attention to item under Serial No. 65(1- 4)(ii) of Section II appearing on page 94 of the Red Book. The entry opposite this item as regards the actual user is, that detailed licensing policy is given in Appendix 31. Appendix 31 appears at page 371 and entry No. 20 which is Test Film and testing instruments other than banned types and Entry No. 33 which is Spare parts for all the above items, as also for items banned under List C. Mr. Joshi, thereafter, invited my attention to Page 135 of the Red Book where Serial No. 38- A(c) is quoted as studio electric and projector bulbs including Halogen lamps. The learned counsel appearing for the petitioners relied upon Item 2(iii) opposite this entry which reads as under:
"(2) Quota licences will be valid for import of the following types of lamps : -
(iii) Prefocussed tungston filament lamps for use in Calorimeter and spectrophotometers."
According to the learned counsel, in view of the Annexure to Section - IV appearing on page 158 of the Red Book, the principle of interchangeability for the period April,1971 to March, 1972 was provided for and in support of this submission, the learned counsel invited my attention to that entry appearing in Group V on page 158 of the Red Book. The entry indicates that although quota licences will be granted separately for radio electric and projector bulbs and Cinema machinery and parts thereof. They will be interchangeable and can be utilised for the import of any goods falling under those Serial Numbers. Now this Group V mentions Serial No./ 38 A(c)/II and so also Serial No. 65 (1-4) (ii) of the Import Trade Control Policy. Relying upon this provision, the learned counsel appearing for the petitioners submitted that as the petitioners were holding Import Licences for Import of permissible items under Serial No. 65 (1-4) (ii) of the Import Trade Control Policy, it was o0pen for the petitioners, in view of the provisions of interchangeability, to import the goods covered under Serial No. 38-A(c)/II of Section IV.
7. Mr. Joshi submitted that the show cause notice issued to the petitioners merely stated that the petitioners are not entitled to import the goods as the said goods required specific licences under Serial No. 38-A(c) of Part II. Mr. Joshi further submitted that the revisional authority made out anew case for the petitioners by holding that the item imported from under Serial No. 38-A(f) of Section II. The learned counsel is right in this submission that the revisional authority has made a new case which was not made known to the petitioners at the time of show cause notice. Mr. Joshi's contention that in view of the provisions of interchangeability, the petitioners are entitled to import the goods which were confiscated by the Assistant Collector of Customs, Bombay, seems to be just and reasonable.
5. On behalf of the department, no return was filed though time was sought from this Court from time to time. Mr. Kotval, the learned counsel appearing on behalf of the department, applied for adjournment and requested that the department would file the return if sufficiently long time is granted. The request made by the learned counsel was rejected as I find that the petition is pending in this Court for the last six years and though the hearing was adjourned to enable the department to file return, the same is not forthcoming. Mr. Kotval is unable to give any valid or cogent explanation as to why the return was not filed. In absence of any return, Mr. Kotval tried to support the orders passed by the authorities below. It was urged on behalf of the department that the view taken by the revisional authority that the item imported falls under Cereal No. A(f)/II of Section II is correct and should be upheld. It is impossible to accept this submission. I have pointed out hereinabove that the show cause notice issued by the Assistant Collector clearly sated that the item imported by the petitioners falls under Serial No. 38-A (c). Part II and the petitioners were never given an opportunity to meet the case which the revisional authority made out for the first time.
9. Mr. Kotval then contended that the provisions of interchangeability relied upon by the petitioners are limited only to item falling under Serial No. 38-A(c)/II. According to the learned counsel to the learned counsel for the department, this indicates that what is available under the principle of interchangeability was item under Section II of the Red Book appearing on a page 61. The view propounded by the learned counsel appears to have been adopted by the appellate authority but on the fact of it, the submission is misconceived and will have to be rejected. A plain reading of acts appearing on page 158 of the Red Book clearly indicates that hat is interchangeable is the item appearing at Serial No. 38-A(c) of Pat II of Section IV and it is the fallacy to suggest that Part II is not one under Section IV but Part II is really Section II itself. If is impossible to conceive how an ANnexure to Section IV would refer to Section II and the submission in this connection of the learned counsel must be turned down. In my judgment, what is provided by the principles of interchangeability are the items provided under Serial No. 38- A(c) of Part II of Section IV and the contention of the petitioners that the items imported by them clearly fall under this Serial Number must be upheld. In my judgment, the view taken by the three authorities is entirely perverse and cannot be sustained and it is necessary to set aside the orders passed by the three Authorities below while exercising jurisdiction under Article 226 of the Constitution of India. Save and except the submissions mentioned hereinabove, no further submission was made on behalf of the department to sustain the orders. In these circumstances, the orders passed by the authorities below confiscating the goods of the petitioners or in the alternative giving an opportunity to the petitioners to pay a fine of Rs. 48,000/- to clear the goods deserve to be set aside.
10. In the result, the petition succeeds and the rule is made absolute in terms of prayer (a) of paragraph 20 of the petition. The respondents shall pay the costs of the petition. Mr. Joshi, also invited my attention to the minutes of the order dated September 21, 1973 passed by this Court. The petitioners had furnished a Bank guarantee for a sum of Rs. 48,000/- as per the order and in view of the judgment, that Bank guarantee would stand discharged. The respondents have agreed to issue a detention certificate for remission and refund charges in favour of the petitioners as the petitioners have succeeded in the petition.