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K.F. Mody and Co. Vs. Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtMumbai High Court
Decided On
Case NumberWrit Petition No. 576 of 1981
Judge
Reported in1989(20)LC68(Bombay)
AppellantK.F. Mody and Co.
RespondentUnion of India (Uoi) and ors.
Excerpt:
.....3 : classification--consumer goods-size of packing does not decide whether consumer or otherwise consumer goods specifically allowed for import under ann 10 are not banned under app. 3. - code of criminal procedure, 1973 [c.a. no. 2/1974]. section 41: [ swatanter kumar, cj, smt ranjana desai & d.b. bhosale, jj] arrest of accused - held, a police officer or a person empowered to arrest may arrest a person without intervention of the court subject to the limitations specified under the provisions of the code. the provisions of section 41 of the code provides for arrest by a police officer without an order from a magistrate and without a warrant. a distinct and different power under section 44 of the code empowers the magistrate to arrest or order any person to arrest the offender. under..........appeal was rejected by the collector of customs (appeals). he found from the records that the dry prunes imported were processed dry fruits. entry no. 22 in appendix 10 covered dry fruits excluding cashewnuts. the term 'dry fruits'' simpliciter meant fruits dried and sold as such. it did not include dry fruits processed with other ingredients. the dry prunes imported were, therefore, not covered by the entry. further, the dry prunes were in retail packing and were consumer items banned by appendix 3.5. the petitioners then filed a revision application which was decided against them by the government of india on 19th december 1980. the government found from serial no. 750 of appendix 3 that so long as the goods were consumer goods the import of the same was banned. the term 'consumer.....
Judgment:

S.P. Bharucha, J.

1. The petitioners are an import and export firm. This petition concerns the import by them of dry prunes under an open general licence.

2. The Import Policy for 1978-79 provided in paragraph 186 that the details of items which could be imported under Open General Licence (OGL) were given in Appendix 10. Item 22 thereof provided for 'Dry fruits, excluding cashewnuts'. Upon this basis the petitioners imported four consignments of dry prunes on O.G.L. The first two consignments were cleared without objection. The third consignment was detained by the Customs authorities.

3. On 15th May 1979 the Assistant Collector of Customs sent to the petitioners a memo alleging that the dry prunes had been imported in contravention of the Trade Control Order inasmuch as they had been imported in consumer, fancy packets of 500 gms. and 250 gms. which were not eligible for release under the provisions of the Open General Licence, Appendix 10, Item 22. On 1st June 1979 the petitioners replied. On 19th June 1979 the Assistant Collector of Customs found the reply unsatisfactory and confiscated the dry prunes under Section 125 of the Act and gave to the petitioners an option to pay a fine of Rs. 5,000/- in lieu of confiscation. 1 he petitioners paid the fine and cleared the dry prunes.

4. The petitioners then filed an appeal against the order dated 19th August 1979. On 6th October 1979 the appeal was rejected by the Collector of Customs (Appeals). He found from the records that the dry prunes imported were processed dry fruits. Entry No. 22 in Appendix 10 covered dry fruits excluding cashewnuts. The term 'dry fruits'' simpliciter meant fruits dried and sold as such. It did not include dry fruits processed with other ingredients. The dry prunes imported were, therefore, not covered by the entry. Further, the dry prunes were in retail packing and were consumer items banned by Appendix 3.

5. The petitioners then filed a revision application which was decided against them by the Government of India on 19th December 1980. The Government found from Serial No. 750 of Appendix 3 that so long as the goods were consumer goods the import of the same was banned. The term 'consumer goods' had not been defined in the Import Policy. In the circumstances, the nature of the packing and its uses would define the nature of the goods so as to decide whether the same were consumer goods or otherwise. Since the dry prunes were packed in fancy packing of 200 to 300 gms., they could, without any doubt, be considered to be consumer goods falling under Serial No. 750 of Appendix 3. As such, their import was banned. The Government noted, as regards the question whether the dry prunes were processed dry fruits or not, that the petitioners had rightly observed that, since in the show cause memo this issue had not been raised and had been raised only at the appeal stage, the principles of natural justice had not been fulfilled. However, in view of the fact that the appeal had been rejected on both counts, the Government did not consider it necessary to go into the aspect whether the dry prunes were processed or not. Since the facts were not disputed and the position in law was clear, the Government did not think it necessary to grant a personal hearing and it rejected the revision application.

6. This petition impugns the orders of confiscation, in appeal and in revision.

7. Mr. Hidayatullah, learned Counsel for the petitioners, submitted that the impugned orders overlooked the last few words of Item 750 in Appendix 3 which excluded from the ban consumer goods specifically allowed for import on open general licence. He submitted that no limitations were imposed as to the manner of packing in item 22 of Appendix 3 and that, therefore, it was not open to the authorities to rely upon the nature of the packing and find the dry prunes to be banned upon that basis. He also submitted that the impugned orders were arbitrary.

8. Mr. Bulchandani, learned Counsel for the respondents, submitted that, inasmuch as the dry prunes were packed in fancy packs of 200 gms. to 500 gms,, it was obvious that they were meant for retail sale and were, therefore, consumer goods to which the ban under Item 750 of Appendix 3 applied, in his submission, the last few words thereof did not exclude the dry prunes from the ban.

9. It appears to me doubtful whether goods can become consumer goods or not dependent upon the nature of their packing. If they are consumer goods, they are consumer goods, whether packed in large quantities or in small. It appears to me, therefore, not correct to term the dry prunes imported by the petitioners consumer goods because they were packed in packings of 200 to 500 gms.

10. More importantly, the phraseology of Item 750 of Appendix 3 is relevant. It reads thus :

Any consumer goods, howsoever described, of industrial, agricultural or animal origin, not appearing individually in appendices 5 and 8 or specifically allowed for import under OGL.

The item bans consumer goods, howsoever described, not specifically allowed for import under OGL. In other words, goods which are specifically allowed for import under OGL, even though they be consumer goods, are not banned by the item. Dry prunes, admittedly being dry fruits, are specifically allowed for import under OGL by Item 22 of Appendix 10. The dry prunes are, therefore, not banned goods under Item 750 of Appendix 3.

11. Upon this interpretation, the impugned orders must fall and it is not necessary to go into the contention that they are arbitrary.

12. The impugned orders are quashed and set aside The respondents shall refund to the petitioners the fine they have paid in the sum of Rs. 5,000/- within four weeks from to-day. The respondents shall pay to the petitioners the costs of the petition.

Rule accordingly.


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