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Bharat Metal Industries Vs. Shri T.P. Singh, Secretary, Ministry of Finance - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtDelhi High Court
Decided On
Case NumberCivil Writ No. 390 of 1970
Judge
Reported in1981(8)ELT716(Del)
Acts Customs Act, 1962 - Sections 111, 125, 128 and 131; Import Control Order, 1955; Customs Rules - Rules 3(2) and 5
AppellantBharat Metal Industries
RespondentShri T.P. Singh, Secretary, Ministry of Finance
Excerpt:
.....of import and export was competent to impose the conditions for import of goods - thus the goods imported in violation of the conditions, were liable to be confiscatedthe case discussed the procedure for proceedings in writ of certiorari under article 226 of the constitution of india - it was ruled that filing of counter affidavit was clarifactory in nature and it would be filed only, if necessary - the proper return to the order of rule in a writ of certiorari would be the original records - - they stated that they had placed the order for 22 gauge material in good faith and there was no mala fide intention on their part and the request made was for a lenient view in the matter and release of the goods. it is clear that the import of these goods was not permitted under the..........m/s. bharat metal industries, petitioner herein, was authorised to import 'prime stainless steel sheets/strips/circles other than 21 to 25g' of the value of c.i.f. in rs. 1,00,000/-. the license dated february 5, 1966 was granted by the iron and steel controller under the government of india, late ministry of commerce and industry order no. 17/55 dated december 7, 1955 issued under the imports and exports (control) act, 1947. the license was for the licensing period april to june, 1965 and was valid for shipping up to february 28, 1967. on the basis of the said license, the petitioner imported stainless steel sheets of the value of rs. 99,715/- from japan. when the goods arrived in india, it was found that they were stainless steel sheets of 22 gauge the import of which was not.....
Judgment:

1. This petition under Article 226 of the Constitution of India seeks the quashing of the orders dated June 27, 1966, September 30, 1967 and January 27, 1969 passed by the Authorities under the Customs Act, 1962.

2. The facts lie in a narrow compass and are not in dispute. M/s. Bharat Metal Industries, petitioner herein, was authorised to import 'Prime Stainless steel sheets/strips/circles other than 21 to 25G' of the value of C.I.F. in Rs. 1,00,000/-. The license dated February 5, 1966 was granted by the Iron and Steel Controller under the Government of India, late Ministry of Commerce and Industry order No. 17/55 dated December 7, 1955 issued under the Imports and Exports (Control) Act, 1947. The license was for the licensing period April to June, 1965 and was valid for shipping up to February 28, 1967. On the basis of the said license, the petitioner imported stainless steel sheets of the value of Rs. 99,715/- from Japan. When the goods arrived in India, it was found that they were stainless steel sheets of 22 gauge the import of which was not permitted under the license granted to the petitioner. The petitioners were served with a show cause notice dated April 25, 1965 by the Assistant Collector of Customs at Madras requiring as to why all the goods should not be confiscated under Section 111(a) of the Customs Act, 1962. Section 111(d) of the Customs Act, 1962 provides that specified goods brought from a place outside India shall be liable to confiscation :

'Any goods which are imported or attempted to be imported or are brought within the Indian Customs waters for the purpose of being imported contrary to any prohibition impost by or under this Act or any other law for the time being in force.'

3. In reply to the show cause notice, the petitioners sent a written Explanationn dated April 28, 1966. The petitioners stated that the gauge restriction was not noticed by them and that the earlier license issued under the Export Promotion Scheme did not mention any gauge restriction. The petitioner also produced the copies of import licenses where no gauge restrictions were mentioned. They stated that they had placed the order for 22 gauge material in good faith and there was no mala fide intention on their part and the request made was for a lenient view in the matter and release of the goods. By the first impugned order dated June 27, 1966, the Collector of Customs found that the goods have been imported without a valid import license in contravention of Section 3 of the Import Control Order, 1955 and an offence attracting the provisions of section 111(d) of the Customs Act, 1962 has thereby been committed. The Collector of Customs confiscated the goods under Section 111(d) of the Customs Act, 1962. The petitioners were given an option under Section 125 of the Customs Act, 1962 in lieu of confiscation to clear the goods for home consumption on payment of a fine of Rs. 50,000/-. The petitioners paid the fine and cleared the goods for home consumption. The appeal of the petitioners under Section 128 of the Customs Act, 1962 was dismissed by the second impugned order dated September 30, 1967. The Revision Petition filed under Section 131 of the Customs Act, 1962 was dismissed by the third impugned order dated January 27, 1969.

4. It is not disputed and cannot be disputed that the description of the goods mentioned in the import license had allowed the import of prima stainless steel/strips/circles other than 21 to 25 gauge. It is the common case that the goods imported were stainless steel sheets of 22 gauge. It is clear that the import of these goods was not permitted under the license granted to the petitioner and the importation was, thereforee, clearly unauthorised as being in contravention of clause 3 of the Import Control Order, 1955. At the time of hearing, some dispute was raised about the import policy. According to the affidavit of Shri P. K. Kapur, Under Secretary to the Government of India, the policy for the import of stainless steel sheets at the time when the license was granted to the petitioners, contained restrictions in respect of stainless steel, sheets of 21 to 25 gauge. Stainless steel sheets of 21-25 gauges are known to be utilised graded sheets i.e. to say they can be used or diverted to the use or for the purpose of making utensils. The Government of India letter's dated July 26, 1965 conveyed to the Engineering Export Promotion Council the Government decision that the stainless steel sheets/strips plates etc. which were permitted against the export of all products falling under Parts I, II and III of Annexure V of the Special Export Promotion Scheme for engineering goods would not be in consumed by or transferred to manufacturers for the manufacture of stainless steel utensils or domestic wares including cutlery, watch straps etc. According to the Affidavit, this letter merely clarifies the intention of the government to permit the import of stainless steel only for the purpose of surgical instruments, hospital equipment and ancillaries. This letter was brought to the notice of the petitioners at the time of hearing of the appeal by the Central Board of Excise and Customs when the petitioners contended that the licensing policy prevailing at the time of issue of the license contained no gauge restriction of the import of stainless steel sheet and that the gauge restriction mentioned in the license was an error. An inference is recorded by the Appellate Authority that Stainless steel sheets of 21-25 gauge are known to be utensil grade sheets and as such they were not licensable at the relevant time. It is thus clear that there is no error of law apparent on the face of the record, that stainless steel sheets of 21 to 25 gauge were known to the trade to be sheets of the grade for making utensil there from and such sheets which could be used for the purpose of making utensils etc. could not be imported and license to import such sheets could not be given.

5. The Licensing Authority while issuing the license was competent to insert restriction condition regarding the gauge of steel sheets/strips etc. in accordance with the provisions of sub-rule (2) of Rule 3 and of Rule 5 of the Import Control Order, 1955. The description of the goods in the import license excluded the stainless steel sheets of 21 to 25 gauge. The petitioners accepted the license and did not ask for the modification of the license before effecting the import. It is too late in the day to urge that there could be no restriction in the import license relating to gauge of stainless steel sheets.

6. The counsel for the petitioners also made reference to the end use of the goods imported by the petitioner. He contends that in reply to the show cause notice and in the additional memorandum dated May 20, 1966 they had stated that they were prepared to give in writing an undertaking to the effect that they would utilise the sheets imported for manufacturing the hospital ware and surgical equipments, or to produce, an end use certificate to evidence the proper utilisation of the goods as stated above. It was further stated that they did not intend and under no circumstances use these sheets for manufacturing utensils or other consumable articles. Reference was also made to paragraphs 6 and 12 of the counter affidavit wherein it is stated that it was never the case of the petitioner at any stage of the adjudication proceedings or even in the present petition that they intended to use the goods for the manufacture of hospital equipment and surgical instruments only and that they did not intend to use the goods imported for them for the manufacture of utensils and other domestic wares. The counsel submits that the authorities under the Act have not taken into consideration the categorical stand of the petitioners of the end use of the imported articles and, thereforee, the impugned orders are vitiated in law.

7. The petitioners have imported the goods in violation of the conditions of license granted to the petitioners and thus the goods are liable to confiscation under Section 111(d) of the Customs Act, 1962. The findings of the authorities under the Act are clearly supported by the material on the record and is in accordance with law. The end use of the goods imported contrary to the prohibition imposed by the license issued under the said Act is not one of the considerations that may weigh with the authorities under the said Act in considering the confiscation of improperly imported goods. The end use may be taken into consideration when option to pay fine in lieu of confiscation is given under Section 125 of the Customs Act, 1962. The authorities under the Act may give to the owner of the goods an option to pay in lieu of confiscation as such fine as the officer thinks fit. It is at the stage of the fixing of the quantum of fine that the consideration of leniency and the end use may operate. The Collector of Customs has taken a lenient view allowing the clearance of the goods for home consumption on the payment of fine of Rs. 50,000/-. The total landed cost, even according to the petitioner, is Rs. 3,39,000/- and the market value may be much more.

8. At the outset, the counsel for the petitioner states that the copy of the affidavit-in-opposition to the writ petition was only furnished today and a request is made for time to file Rejoinder. This request is declined as the affidavit-in-opposition was filed in the year 1972 and the writ petition was filed in the year 1970. Moreover in a writ of certiorari the return to the Rule is the original records and the counter affidavit is only by way of clarification, if necessary.

9. For above reasons, I do not find any error of law apparent on the face of the record. The writ petition merits dismissal and is dismissed with no order as to costs.


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