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Standard Electronic Engineering Corporation by Its Partner Sri M.B. Hiranand and Sri M.B. Hiranad S/O L. Mangharam, Standard Electronic Engineering Corporation Vs. the Collector of Customs and Central Excise and the Assistant Collector of Customs, Customs Division, Postal Appraising Department - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtKarnataka High Court
Decided On
Case Number Writ Petition Number 2603 of 1981
Judge
Reported in1981LC314D(Karnataka)
AppellantStandard Electronic Engineering Corporation by Its Partner Sri M.B. Hiranand and Sri M.B. Hiranad S/
RespondentThe Collector of Customs and Central Excise and the Assistant Collector of Customs, Customs Division
Excerpt:
.....imported components are within the competence of the petitioner to import under appendix-10 of the import policy for 1979-80 in accordance with the conditions prescribed therein, variance of those conditions as in the instant case by the insistence of production of approved phased production programme, would be unauthorised in the absence of a gazetted notification in that behalf.;appeal was admitted. - constitution of india -- article 226 & 227: [h.n. nagamohan das, j] writ petition filed by the trade union and an employee questioning the competency of the direction issued by the member of the national commission for sc & st to reinstate the fourth respondent, a senior manager locus standi of the petitioners held, first petitioner is espousing the cause of its members who are the..........goods. the petitioner is a holder of original general licence granted under appendix 10 of the import policy of the government for the financial year of 1979-80. on the said licence the petitioner opened and irrevocable letter of credit with the foreign exporter in west germany on 28.2.1980 and placed orders for certain components known as carbon transmitter inset. these were despatched by the foreign seller on 23.4.1980 and were received at bangalore by post in july 1980. the parcels were actually received at the postal appraising department, department of customs, bangalore.3. in fact the customs department on 2.7.1980 issued a call memo intimating the arrival of the parcels and requiring the petitioner to produce certain documents enumerated in the said call memo to enable the.....
Judgment:
ORDER

M.P. Chandrakantaraj Urs., J.

1. This petition is disposed of at the stage of preliminary hearing after notice to the respondents and after hearing the learned Counsel for the petitioner and the learned Counsel for the respondents.

2. The petitioner is a partnership firm engaged in the manufacturer of electronic goods and is registered as a small scale industry with the Government of Karnataka. It manufactures such electronic items as intercommunication equipments, transistorized equipments like tape-deck mechanism, transistorized radios, amplifiers etc. In order to produce the goods for which it is registered with the state Government as small scale industry, it is required to import certain components which go into the production of such goods. The petitioner is a holder of original general licence granted under Appendix 10 of the Import Policy of the Government for the financial year of 1979-80. On the said licence the petitioner opened and irrevocable letter of credit with the foreign exporter in West Germany on 28.2.1980 and placed orders for certain components known as carbon transmitter inset. These were despatched by the foreign seller on 23.4.1980 and were received at Bangalore by post in July 1980. The parcels were actually received at the postal appraising department, department of customs, Bangalore.

3. In fact the customs department on 2.7.1980 issued a call memo intimating the arrival of the parcels and requiring the petitioner to produce certain documents enumerated in the said call memo to enable the department to release the goods. The petitioner complied and produced those documents enumerated in the call memo. But the department did not release the goods. Instead of releasing the goods the department caused a summons to be issued under Section 108 of the Customs Act, 1962 (hereinafter referred to as the Act). The said summons required the petitioner firm to appear before the Appraiser, Postal appraising department. The summons also required certain documents to be sent, a list of which was annexed to the summons. In response to which on 23.12.1980 the petitioner firm sent certain documents with a covering letter. One of the documents that was required to be produced in item-2 under the aforementioned annexure to the summons, a true copy of which is produced at Annexure-B to the petition, was an approved phased production program me in respect of every item of parcel that had arrived. The petitioner firm did not send any approved phased production programme as required by the annexure to the summons in respect of the parcels which contained carbon transmitter inset as they had none. The department insisted that without the approved phased production programme it would not be possible for it to release the goods. Aggrieved by the stand taken by the respondents, the petitioner has approached this Court under Article 226 of the Constitution seeking a writ of mandamus from this Court directing respondent-2 to forthwith release the consignments referred to in Annexure-I of he summons (Vide Annexure-B) dated 17.12.1980 issued under Section 108 of the Act.

4. After notice, the respondents have entered appearance and filed their statement of objections. Sri U. L, Narayana Rao, learned Central Government Senior Standing Counsel, fairly conceded that the facts were not in dispute. The respondents were insisting upon the production of approved phased production programme as it was required to determine the bona-fides of the import inasmuch as that would give the particulars of the requirement of the imported components by the importer. He drew my attention to paragraph-5 of the Statement of objections. Till 11.4.1980 the Director of Industries and Commerce and Development Commissioner, New Delhi, was not entitled to approve the phased production programme for electronic goods in the country in small scale industrial sector. However, he was authorised to do so with effect from 11.4.1980 and therefore the Director of small Scale Industries Service Institute, Bangalore, addressed latter to tie Assistant Collector of Customs at Bangalore drawing his attention to the personal discussion he had and asked the Assistant Collector to insist in respect of electronic units requiring imported raw materials/components to obtain the approval of the Phased Production programme from the office of the Development commissioner, Small Scale Industries, New Delhi.

5. He has fairly submitted that it was on the basis of this letter that the respondents were insisting for the production of the approved phased production programme as certified by the Development Commissioner for Small Scale Industries, New Delhi. In fact, learned Counsel for the respondents has drawn my attention to some other records pertaining to the petitioner in which such approved phased production programmes have indeed been produced in respect of some other electronic goods than the intercommunication equipment with which we are now concerned in this writ petition. Therefore, it is the submission that the writ petition is misconceived and is liable to be rejected directing the petitioners to comply with the requirements of summons at Annexure-B.

6. Sri K.G. Raghavan, learned Counsel appearing for the petitioner has drawn my attention to appendix-10 of Import Policy of 1979-80 which is the relevant policy applicable to the facts of the case. Normally the policy is to be operative from the first April of an year to 31st of March of succeeding year subject to variations made in accordance with law. In the instant case, however, by a public notice dated 31.3.1980 ail were informed that the Import policy for the year 1980-81 would be announced on 15.4.1980 and therefore, the Import policy of 1979-80 would be operative till 14.4.1980. Hence, Sri Raghavan contends that the petitioner-firm having Open General Licence is entitled to import the components on merely satisfying that it is an actual user (industrial) which is not in dispute. It is however, his contention that he has produced the document necessary to prove that he is an actual user and he is registered as a small scale industrialist in the State of Karnataka as required under law and the Import policy for 1979-80. According to him, the insistence by the respondents on the production of approved phased production programme for the year is not a legal requirement nor the respondents have the authority to so insist.

7. He has drawn my attention to Section 11 of the Act which provides for change in the conditions of licences only by a gazetted notification issued by the Central Government. Therefore, since the imported components are within the competence of the petitioner to import under Appendix-10 of the import policy for 1979-80 in accordance with the conditions prescribed therein, variance of those conditions as in the instant case by the insistence of production of approved phased production programme, would be unauthorised in the absence of a gazetted notification in that behalf.

8. The submission by the counsel is liable to be upheld because the letter of Director of Small Scale Industries of Government of India at Bangalore, cannot be presumed to have conferred the power to alter the conditions of open general licence issued under the import policy of 1979-80. No doubt the suggestion made in the letter to which my attention was drawn by the learned Counsel for the respondents that it would be in the proper interest of the licencing policy that such approved phased production programme should be insisted upon as it would assist the department in keeping track and assessing the requirements of each importer of the raw material and components and thereby preventing abuse of foreign exchange as well as its conservation. If that is so, it is open to the Central Government at all times to issue the necessary notification under Section 11 of the Act altering the conditions even after the import policy has been declared in any given year. in the absence of such a notification the petitioner must succeed in this Court and secure for itself a writ of mandamus for the release of items referred to in Annexure-1 at 1 to 41, item-42 having been already released. As there is no dispute that all the other requirements by the petitioner have been complied with, the goods will be released within 48 hours after the receipt of this order by the respondents as there has been inordinate delay without sufficient cause in releasing the parcels earlier.

9. Rule in this behalf will issue as well as a mandamus. But there will be no order as to costs.

A copy of this order may be given to the counsel for the respondents free of cost forthwith.


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