(1) This judgment will dispose of Civil Writ Petitions Nos 605-D,562-D and 563-D of 1963. I am reciting only the facts of Civil Writ No. 605-D of 1963 as the learned counsel agree that the decision rendered in this case would govern the toher to petitions also.
(2) The petitioner was granted an import license dated 3rd September, 1960 for 'Industrial scrap- as per item of 3 of the attached list - 4.2 tons - Rs.2520'. The attached list consists of two parts, namely, 'A' and 'B' Part 'A' is headed 'Industrial Scrap' and gives a list of seven different items of industrial scrap, the relevant item in the said Part 'A' is item 3 reading-
'Tinplate strips of any gauge, of maximum widths of 254 mm of any random and assorted lengths'.
It is agreed by the learned counsel for the parties that the goods in question were imported by the petitioner and cleared by the Customs authorities on the authority of this very license. In toher words, the Customs authorities, while clearing the goods, also accepted the position that the petitioner was entitled to import the goods is question against the said license. The controversy, however, arose between the parties as to the correct duty payable. The duty was levied and charged under item 63(10) of the First Schedule to the Indian Customs and Central Excise Tariff which reads-
' Steel, tin plates and tinned sheets, including tin taggers, and cuttings of such plates, sheets or taggers - (1) of British manufacture (ii) nto of British manufacture'.
The petitioner, however, claimed that the goods fell under item 69(1) that is -
'Tin scrap and tinplate scrap'
At the relevant time goods covered by item 69(1) of the said Tariff were free from duty. The petitioner, thereforee, applied for refund of the duty charge which claim of the petitioner was rejected by order of the Assistant Collector of customs. Bombay, dated 16th September, 1961. The Assistant Collector held-
'Item 69(1) Ict covers tin scrap and tinplate scrap. As the goods in question consist of cuttings of steel tin plates they do nto quality for assessment under item 69(1) ICT. The original assessment made under item 69(10) Ict is thereforee in order. No refund is due and the claim is accordingly rejected'.
The petitioner filed an appeal which was rejected by the Additional Collector of customs on 30th March, 1962. The Additional Collector decided-
' I have carefully considered their contentions in their written appeal but observe that the goods under appeal are correctly assessable under appeal 63(10) Ict Scrap means unserviceable material fit for smelting and remaking. The goods in question although slightly defective and imperfect tin strips or circles are serviceable for many purposes toher than smelting and remaking.
I thereforee, see no reason to interfere with the Assistant Collectors order appealed against.
The petitioner's revision before the Central Government was also rejected by a summary order dated 13th December, 1962.
(3) Before I deal with the rival contentions, I may point out that if the decision of the case turned only on the appreciation of the nature of the goods and the evidence for fixing the particular entry applicable out of two or more which may possibly apply. I would have been reluctant to interfere in writ jurisdiction, I am, however, of the opinion that the authorities concerned have fallen into a fundamental error as to the scope of the various entries and their jurisdiction and that makes it a fit case for interference under Article 226 of the Constitution. The terms 'tin scrap' and 'tinplate scrap' have nto been defined in the Indian Customs and Central Excise Tariff and one has necessarily to go by the ordinary meaning of the terms. Mr. Yogeshwar Dayal, the learned counsel for the petitioner placed reliance on clause 2(j) of the Iron and Steel (control) Order, 1956, (as amended up to the 1st January, 1959) as indicative of the meaning generally given to the term's scrap' in the field of legislation. According to this clause 'scrap' means all iron or steel material which is commonly known as scrap and includes defective iron or steel material whether it is suitable only re-rolling of re-melting or can be used for to toher purposes.
The argument of Mr. Yogeshwar Dayal is that merely because of scrap can be used for purchases toher than smelting and remarking does of alter it from its essential character of being scrap. Mr. Yogeshwar Dayal has also placed strong reliance on the observation of the additional Collector of Customs when he says-
' The goods in question although slightly defective and imperfect tin strips or circles
According to the Concise Oxford Dictionary ' scrap' means small detached piece of something, fragment remnant, useless remains etc. Mr. Shankar, the learned counsel for the respondents, has on the toher hand, argued that it is entirely for the Customs authorities to determine the particular item of the said tariff under which the goods fall and that determination has essentially to be made on the basis of the nature of the goods and various toher connected factors. He further says that the mere fact that the licensing authority issued license for 'industrial scrap' is nto decisive of the entry in the said tariff under which the goods would fall and this Court cannto under Article 226 of the Constitution decide the question. Mr. Shankar also argued that for the purposes of issuing license goods may fall under a particular category and yet they may be covered by one or the toher entry in the Tariff and, thereforee, the latter question has to be decided in disregard of the fact that the license had been issued for scrap under a law regulating the import of goods.
(4) I agree with Mr. Shankar that issue of a license for a particular commodity will nto be decisive of the applicability of the entries in the Tariff because the commodity licensed for import may fall under one or toher items in the Tariff in that situation, of course, it would be for the Customs authorities to decide which entry of the Tariff applies. It must however, be remembered that if an item falls specifically under one entry of the Tariff it cannto, by the process of stretching, be brought to fall under antoher entry. The license was issued for 'Industrial scrap'. The Customs authorities allowed the clearance of the goods under that very license thereby accepting the fundamental nature of the goods as scrap. It was nto, thereforee, open to the Customs authorities to depart from their earlier position after the goods had been cleared and say that the material was nto 'scrap' at all. Having regard to the language of the two entries 63(10) and 69(1) it must be held that item 63(10) deals with cutting of plates etc. toher than scrap. If the customs authorities are held bound to treat the material as 'scrap' the goods must necessarily fall to entry 69(1) only. If there were more than one categories of scrap under different entries in the Tariff the Customs authorities could have legitimately said that they alone were competent to decide which entry covered that scrap.
In this view it must beheld that the Customs authorities acted without jurisdiction and committed a patent error in treating the goods as covered by entry 63(10). There petitions must, thereforee, be allowed and the impugned orders of the Assistant Collector, Additional Collector of Customs and the Central Government quashed with no order as to costs. I order accordingly.
(5) Petition allowed.