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G.D. Mining and Export Co. Vs. Union of India (Uoi) - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtDelhi High Court
Decided On
Case NumberCivil Writ Petition No. 953 of 1972
Judge
Reported in1979CENCUS239D
AppellantG.D. Mining and Export Co.
RespondentUnion of India (Uoi)
Cases ReferredSouth India Coil Mills Poockakkal v. Additional Collector
Excerpt:
customs act, 1962 - sections 111(d), 130, 27(3), 131 and 125 - confiscation under section 111(d) permissible when importation in contravention of statutory prohibition--revising authority can admit additional material under section 130--where refund due as a result of order passed in revision, period of limitation under section 27(3) does not apply--adjudicating authority not bound to give reasons for imposing a particular redemption fine. - - stress has been laid on the fact that the import license as well as classification had been issued by sh. on this material it is contended that the central government has failed to appreciate that there were two views possible in the matter and since the present proceedings are quasi-criminal proceedings dealing with the question of imposing fines.....orders.s. chadha, j.1. this writ petition under article 226 of the constitution of india seeks quashing of the order of the customs authorities re-opening the order permitting clearance of the goods imported and ultimately confiscating the goods imported under section 141(d) of the customs act, 1962, imposing a redemption fine of rs. 10 lakhs in lieu of confiscation and declining to refund the difference in duty without any claim within the statutory period.2. the bare facts to which there is no dispute are these : under the govt. of india barter scheme a public notice no. 58 dated june 25, 1968 was issued in terms whereof exporters were allowed to import certain specified items and 'stainless steel angles' was one of such items in the list thereof. the petitioners applied for and were.....
Judgment:
ORDER

S.S. Chadha, J.

1. This writ petition under Article 226 of the Constitution of India seeks quashing of the order of the Customs Authorities re-opening the order permitting clearance of the goods imported and ultimately confiscating the goods imported under Section 141(d) of the Customs Act, 1962, imposing a redemption fine of Rs. 10 Lakhs in lieu of confiscation and declining to refund the difference in duty without any claim within the statutory period.

2. The bare facts to which there is no dispute are these : Under the Govt. of India Barter Scheme a Public Notice No. 58 dated June 25, 1968 was issued in terms whereof exporters were allowed to import certain specified items and 'stainless steel angles' was one of such items in the list thereof. The petitioners applied for and were granted two Import licenses bearing No. 8430108 and 8430109 both dated September 6, 1968; The said two Import licenses were issued to the Minerals and Metals Trading' Corporation (India) Ltd. Two letters of authority both dated September 6, 1968 were also issued permitting the petitioners to import goods, open letters of credit and make remittances against the said two Import licenses. The petitioners negotiated with one Nomura Trading Co. Ltd. Tokyo and their agents in Calcutta and entered into a contract for supply of goods. The goods were thereafter shipped under the Cover of Invoice dated January 21, 1969 and mentioned the description 'stainless Steel Angles' AISI 304 Type 2B finish SWG 26 in thickness of sizes 6' x 6' x 10', 61/2' x 61/2' x 10' & 7 1/2'x7 1/2'x 10'. On the importation of the goods at Bombay the petitioners submitted a Bill of Entry No. 1548/21 on 27th February, 1969 for clearance of the goods, claiming it under itemNo. 63 (2) I.C.T. After the submission of the said Bill of Entry, the concerned Customs Officers took the opinion of Shri Brahma Prakash, Director Metallurgy Group, Bhabha Atomic Centre, Bombay ; Prof V.A. Alterkar, Prof, of Metallurigical Engineering and Shri. N.D.Sahukar, Manager of Godrej and Boyce Mfg. Co. Pvt. Ltd., Bombay. The Dock Appraiser, the Scrutinising Appraiser and the Principal Appraiser examined the goods and gave their recommendations to the Assistant Collector of Customs who accepted the recommendations in regard to the classifications of the goods. The Bill of Entry was thereafter completed and goods assessed to customs duty under Item 63 (2) I.C.T. as 'Stainless steel angles' and an order of clearance passed on 17th March, 1969. The assessed duty of Rs. 2,40,584.16 was paid on 17th March; 1969 and the goods were cleared. On March 19, 1969 the Asstt. Collector of Customs issued a short Levy notice as provided under Section 28 of the Customs Act, 1962 (hereinafter referred to as the Act) claiming the difference in duty. No further steps were thereafter taken on this notice.

3. It appears from the records, that information was received that the goods in dispute were cleared unauthorisedly by mis declaring them as 'stainless steel angles' and paying less duty than the proper duty. On receipt of, this information, the Assistant Collector, Central Intelligence Unit of the Customs House seized the goods in dispute on April 3, 1969. Thereafter on July 17, 1969, a show-cause notice under Section 130 of the Act was issued and served on the petitioners. The Collector of Customs Bombay (who is delegated with the powers of the Board) stated that he had called for and examined the records pertaining to the said consignment to satisfy himself about the legality and propriety of the orders of clearance made by the proper officer under Section 47 of the Act and it appeared to him for the reasons stated that the said order allowing clearance of the goods against the licenses produced which are not valid licenses for the goods and without recovering proper amount of dutythereon were not in accordance with law, nor were they proper Orders. The Collector of customs expressed the view that the goods in dispute are 'stainless steel sheets' and not 'stainless steel angles' as declared, and proposed to set aside the order of clearance made by the proper officer, to confiscate the goods in dispute under Section 111(d) of the Act, to give the owner option to pay, in lieu of confiscation, a fine of Rs. 27,00,000/- for home consumption, to impose personal penalty of Rupees 6,00,000/- under Section 112 of the Act, and to recover the amount of duty short levied on the goods, viz., Rs. 6,13,841.59. After receiving the replies to the show cause notice and granting personal hearing, the Collector of Customs, Bombay in the first impugned order dated February 7, 1971 came to the conclusion, that the goods imported are correctly classifiable as 'stainless steel sheet' under Item. 63 (20A) I.C. T. and the import license originally produced for their clearance is not valid. He ordered that the seized goods shall be confiscated under S.111(d) of the Act. The owners were given an option to pay a fine of Rs. 21,00,000/- in lieu of such confiscation. A personal penalty of Rs. 4,00,000/. was also imposed under Section 112 of the Act. A demand of the short levy on the goods, viz. Rs. 6,13,841.59 was raised. The Collector of Customs also held that the previous order of clearance was illegal and improper and as such justified the proceedings under Section 130 of the Act.

4. The petitioners then preferred a Revision Application before the Central Government. In the second impugned order dated May 18, 1972, the Central Government held that the so-called angles were sheets and as such were liable to duty only at 10% ad valorem whilst the petitioners had been assessed to duty at 27 1/2 per cent, but the petitioners cannot be given the benefit of the lower rate as they have not lodged any claim within the time limit of six months and no circumstances exist to consider relaxation of the limiting provisions of the Act. In the circumstances of the case, the Central Government did not see any case for imposition of a personal penalty. On considering the facts of the case, the redemption fine was reduced to Rs. 10,00,000/-.

5. The first submission of Mr. S.S. Ray, learned Counsel for the petitioners is that in view of the finding of the Central Government that the license could be read either way and there was certain amount of ambiguity in the matter, there could be no confiscation or imposition of redemption fine in lieu inasmuch as the Customs Authorities had to prove their case beyond reasonable doubt. Attention is invited to the findings of the Central Government in para 9 of the impugned order quoted in extenso subsequently. He contends that the Central Government admitted that the classification issued by the Licensing Authorities if literally construed would go in favor of the petitioners and covered angles of any width of flanges and that the Licensing Authorities may license something for a specific purpose. He submits that the Central Government obviously was referring to the Import license which had authorised importation of 'Stainless Steel Angles' and the clarification issued on 29th April, 1969 (Annexure C-Page 48) wherein the Deputy Assistant Iron and Steel Controller had stated that his office had no objection to the import of Stainless Steel Angles of 26 gauge in any section against the said licenses when it observed that the classification can be read either way and it introduces a certain amount of ambiguity. Stress has been laid on the fact that the import license as well as classification had been issued by Sh. H. D. Paul, Dy. Assistant Iron and Steel Controller who is duly authorised. Reference was also made to the evidence and decision of Shri H. D. Paul in case of Barterer M/s. Shanti Lal Chhotelal and Co. permitting import. of S. S. Angles of 26 S. W. G. against similar license already issued to them. On this material it is contended that the Central Government has failed to appreciate that there were two views possible in the matter and since the present proceedings are quasi-criminal proceedings dealing with the question of imposing fines and penalties and not merely confined to the assessment of goods to duty, the Customs Authorities had to hold that the charge was not proved beyond a reasonable doubt. Reliance is placed on Amba Lal v. Union of India AIR 1961 SC 264 wherein it was held (at p. 266):

This Court has held that a Customs Officer is not a judicial tribunal and that a proceeding before him is not a prosecution. But it cannot be denied that the relevant provisions of the Sea Customs Act and the LandCustoms Act are penal in character. The appropriate customs authority is empowered to make an inquiry in respect of an offence alleged to have been committed by a person under the said Acts, summon and examine witnesses, decide whether an offence is committed, make an order of confiscation of the goods in respect of which the offence is committed and impose penalty on the person concerned, see Ss. 168 and 171-A of the Sea Customs Act and Ss. 5 and 7 of the Land Customs Act. To such a situation, though the provisions of the Code of Criminal Procedure or the Evidence Act may not apply except in so far as they are statutorily made applicable, the fundamental principles of criminal jurisprudence and of natural justice must necessarily apply.If so, the burden of proof is on the Customs authorities and they have to bring home the guilt to the person alleged to have committed a particular offence under the said Acts by adducing satisfactory evidence.

Reliance is next placed on Shanti Prasad Jain v. Director of Enforcement : [1963]2SCR297 wherein it was held that the proceedings under the Foreign Exchange Regulations Act, 1947 are quasi-criminal in character and it is the duty of the authorities as prosecutor to make out beyond all reasonable doubt that there was violation of the law. According to the counsel the provisions for confiscation, and imposition of redemption fine indicate that the proceedings under the Act are also quasi-criminal. Relying on Tolaram Relumal v. State of Bombay AIR 1254 SC 496, it is urged that it is well settled rule of construction of penal statutes that if two views are possible, the Court must lean in favor of a construction which exempts the subject from penalty.

6. This argument though attractive seems to me to be without merit. Section 111(d) of the Act provides that 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 imposed by or under the Act or any other law for the time being in force shall be liable to confiscation. Any prohibition applies to every type of prohibition. Any restriction on import is to an extent a prohibition. Section 3(1) of the Imports and Exports (Control) Act, 1947 provides for power to prohibit or restrict imports and exports. In exercise of this power, the Government of India promulgated the Import Control Order, 1955 providing restrictions on import of certain goods. The import of stainless steel sheets/angles/strips is prohibited in the relevant year except under or in accordance with a license. The goods which have been imported and subsequently seized in this case could not have been imported into India without a license under the Import Control Act and there is, thereforee, a prohibition in law for the import of the goods except in compliance with the Import Control Act. The categories of Iron and Steel allowed to be imported under the Public Notice No. 58 dated June 25, 1968 are given in the Annexure to the Public Notice and does not include 'Stainless Steel Sheets or Strips' but includes only 'Stainless Steel Angles'. The said two Import licenses also permit the import of 'Stainless Steel Angles'. The Import licenses which were utilised by the petitioners for the purpose of clearing the goods, according to the findings of the Customs Authorities, did not cover the goods imported, thus the import of the goods cannot be valid. Goods imported, thereforee, cannot be treated to be lawfully imported goods. If the finding of the Central Government is correct, the goods must be held to have been brought into India contrary to a prohibition imposed by law as contemplated by Section 111(d) of the Act and in that case the goods imported are liable to confiscation. Even in the case relied upon by the petitioners' counsel, 'East India Commercial Co. Ltd. Cal. v. Collector of Customs' : 1983(13)ELT1342(SC) it was held that by reason of Section 3(2) of the Imports and Exports (Control) Act, 1947, all goods to which any order under Sub-section (1) of Section 3 applies, shall be deemed to be goods of which the import and export has been prohibited, under Section 19 of the Sea Customs Act, 1878. This provision in its turn attracts, along with others Section 167(8) of the Sea Customs Act and the goods imported in contravention of an order under the Act are liable to be confiscated. In the case before me it is not the breach of a condition of license, as is argued, but a decision whether the articles imported are covered by the said two licenses or not.

7. Para 276 of the Import Trade Control Hand Book of Rules and Procedure provides that it is within the jurisdiction of the Customs Authorities to determine whether or not the goods imported are in conformity with the description given in the licenses. Although in the case of doubt in regard to the correct description of the goods given in the license the Customs Authorities may consult the Import Trade Control Authorities, the final authority rests with the Customs Authorities. Para 277 of the I.T. C. Handbook also points out that the Customs Classification and I.T.C. Classification can be on different footing. The Collector of Customs has held in his order dated February 7, 1971 after evaluating the entire material on the record that the goods are not stainless steel angles. The Central Government also expressed that it is evident from the opinion of the experts that the goods are not angles in the conventional sense, that the angles known in the trade are generally those which provide support to the structures, that the said angles can provide surface but not strength or support to the surface and that the correct classification of the goods imported is 'Stainless Steel Strips' liable to duty under Item 63 (14) I. C.T. Thereafter the Central Government considered that the import license allows 'Stainless Steel Angles'. It is then observed:

It is difficult to go behind the intention of the Licensing authorities in this case, but the clarification they have given can be read either way. They have stated that they have no objection to the import of 26 gauge stainless steel angles in any section. Now, the words 'any Section' literally applied will go in favor of the party and cover angles of any width of flanges whether such angles exist or not; if applied in trade sense it will cover only such angles as are traded in the market. Neither in the I.S.I. specification nor in the records of the case there is anything to show that stainless steel angles are traded in the indigenous market; they appear to be fabricated for the occasion. The petitioners have produced letters from two reportedly well-known manufacturers ofU.K. to show that such angles are formed from sheets for the purpose of manufacture of hospital equipment. However, it appears that the letters of foreign manufacturers only show that the stainless steel sheets have to be bent into the form of angles before the hospital equipment such as tanks, racks, etc. are manufactured. Obviously, the formation of an angle is merely an intermediary process and not that the angles exist as such. However, the fact remains that the clarification given by the Iron & Steel Controller does introduce a certain amount of ambiguity, in the matter.

The finding thus is that the petitioners were authorised to import 'Stainless Steel Angles' by the said licenses and that the goods imported were not stainless steel angles. The affidavit of the respondent about the classification from the office of the Iron & Steel Controller is that the letter expressing the opinion had been issued on the basis of examination undertaken when a third party approached the Iron & Steel Controller. This is factually correct as the Bill of Entry was submitted on 27th February 1969 and clearance made on 17th March, 1969, whereas the letter was issued on 29th April, 1969 after the seizure. The letter only says that there was no restriction of gauges for steel angles in the license policy and it was agreed to the import of 26 gauge angles. But the Central Government clearly hold that neither in the I. S. I. specification nor in the record of the case there is anything to show that stainless steel angles are traded in the indigenous market; they appear to be fabricated for the occasion. This finding must have been returned taking into consideration that the categories of the Iron & Steel allowed to be imported under the Barter Scheme did not include the 'Stainless Steel Sheets' or 'Stainless Steel Strips'. Sufficient material has been placed on the records that the stainless steel sheets of 15', 13' and 12' were bent in the bending machines and imported in this country by misstating them as angles for the purpose of clearance through Customs. The finding of the Central Government that they appear to be fabricated for the occasion is thus clearly supported by the evidence on record and has to be accepted as correct. The observations of the Central Government that it can be read either way and introduces a certain amount of ambiguity are not to be read in isolation but in the context in which they are made. The Central Government in the subsequent part of the order clearly holds that the said goods cannot be classified as angles as they do not appear to be traded in the market as such and there is no clear cut clarification of the licensing authority In this view of the matter, the conclusion of the Customs Authorities that the imported goods are not stainless steel angles is final and binding. Whether the goods imported are stainless steel angles or not is a question of fact and this court would not ordinarily reconsider the matter on evidence with a view to decide whether the said finding is right or not, though I was taken through the entire evidence on the record. I went through it only to ascertain whether any reasonable person could have returned the finding and I am convinced that it cannot be branded as perverse as is argued by the counsel.

8. Under Section 111(d) of the Act Confiscation is permissible when there is an importation in contravention of the statutory prohibition. The goods imported cannot be treated to have been lawfully imported as they were not covered by the license ; because they could not be classified as 'stainless steel angles'.

9. The Customs Authorities have adduced satisfactory evidence as is detailed in paras 5 to 9 of the show-cause notice dated 17th July, 1969 and the accompanying documents on the basis of which the finding is returned. This, in my opinion, discharges the burden of proof by the Customs Authorities to the charge of importation contrary to the prohibition imposed by law as contemplated by Section 111(d) of the Act and satisfies the test laid down in Amba Lal's case AIR 1961 SC 264 that the Customs Authorities have to bring home the guilt to the person alleged to have committed the particular offence under the Act by adducing satisfactory evidence.

10. Reliance by the petitioners counsel on Shanti Prasad Jain's case AIR 1962 SC 1774 is misplaced. Section 111(d) of the Act provides in case of the goods imported contrary to the prohibition for confiscation of the goods which is an order in rem. A distinction has to be drawn between an action in rem and a proceeding in personam. Proceedings under the Foreign Exchange Regulations Act is a proceeding against an offender and is applicable to the person who contravenes any of the provisions of the said Act. It is on this consideration that their Lordships of the Supreme Court held that it is the duty of the authorities as a prosecutor to make out beyond all reasonable doubt that there was violation of law. So far as the confiscation of the goods is concerned, it is a proceeding in rem and the penalty is enforced against the goods. In such a case the guilt is to be brought home only by satisfactory evidence.

11. The last case cited by the counsel-only points out that where penalties for infringement are imposed, it is not competent to the Court to stretch the language of the provision. No such question arises in this case.

11-A. The show-cause notice dated 17th July 1969 and the consequential orders dated 7th February, 1971 passed by the Collector of Customs under Section 130 of the Act revising the order of clearance made on 17th March, 1969 by the proper officer under Section 47 of the Act are next argued as without jurisdiction. Section 130(1) of the Act reads as follows:

130 (1). The Board may of its own motion or on the application of any aggrieved person call for and examine the record of any proceeding in which an officer of customs has passed any decision or order under this Act (not being an order passed in appeal under Section 128) for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may pass such order thereon as it thinks fit.

It is contended by the petitioners' counsel that Section 130 of the Act imposes limitations on the jurisdiction to be exercised after calling for and examining the record of the clearance of the goods in which the proper officer made an order permitting clearance of the goods for home consumption and this examination is for the purpose of satisfying as to the legality or propriety of the orders. It is urged that Section 130 of the Act not only limits the scope of its jurisdiction but also defines the material on the basis of which the jurisdiction could be exercised. The record of the proceedings comprised of the examination orders and reports of the Dock Appraiser, the Scrutinizing Appraiser, the Principal Appraiser and the Assistant Collector and the written opinion of the three experts mentioned above, all of which, according to the counsel, expressed the considered view that the goods imported were stainless steel angles. The counsel submits that the action of the Collector of Customs in ignoring these records and considering the material subsequent to the order of clearance is without jurisdiction vitiating the entire proceedings. It is also urged that in exercise of the revisional power the Collector of Customs could only proceed to take action on the basis of the material already present on the record and was not entitled to institute any enquiry so as to include additional material in order to judge the correctness of the order sought to be revised. Reliance is placed on State of Keralav. K.M. Charia Abdulla : [1965]1SCR601 , wherein their Lordships of the Supreme Court considered the provisions of Section 12 of the Madras General Sales Tax Act, 1939, which are pari material to Section 130 of the Act. It was held (at p. 1585):

There is no doubt that the revising authority may only call for the record of the order or the proceeding and the record alone may be scrutinised for ascertaining the legality or propriety of an order or regularity of the proceeding. But there is nothing in the Act that for passing an order in exercise of his revisional jurisdiction, if the revising authority is satisfied that the subordinate officer has committed an illegality or impropriety in the order or irregularity in the proceeding, he cannot make or direct any further enquiry. The words of Sub-section (2) of Section 12 that Dy. Commissioner 'may pass such order with respect thereto as he thinks fit' mean such order as may in the circumstances of the case for rectifying the defect be regarded by him as just. Power to pass such order as the revising authority thinks fit may in some cases include power to make or direct such further enquiry as the Deputy Commissioner may find necessary for rectifying the illegality or impropriety of the order or irregularity in the proceeding. It is, thereforee, not right baldly to propound that in passing an order in the exercise of his revisional jurisdiction, the Deputy Commissioner must in all cases be restricted to the record maintained by the Officer subordinate to him and can never make enquiry outside that record.

12. The second ground of attack also fails for these reasons. It is clear from Section 130 of the Act that the Board may only call for the record of any proceedings in which an officer of the customs has passed any decision or order and that record may be scrutinised for ascertaining the legality or propriety of the order. It has been brought on the record that the petitioner imported a consignment of 201 cases declared to contain Stainless Steel Angles S. S. Kazukawa Maru vide Bill of Entry No. 1548/121 of a declared value of Rs. 8,25,335/-. The Shed Appraiser had carried out the examination of the goods and recorded on the reverse of the Bill of entry 'description and sizes checked' and sent the sample to the Scrutinising Appraiser to confirm such description. The Scrutinizing Appraiser was doubtful about the description of the goods and, thereforee, had to make market enquiries and consult three experts. While doing so, only a cut sample of the goods imported was sent for opinion. On seeing the cut sample, the experts advised, that the imported goods were stainless steel angles. The Principal Appraiser on the basis of the recommendations gave the opinion that the goods imported are stainless steel angles and placed the record before Asstt. Collector of Customs who accepted the recommendations and ordered clearance of the goods. The show cause notice dated July 17, 1969 mentions the facts that Collector of Customs had called for and examined this record to satisfy himself about the legality and propriety of the orders of clearance. It mentions that the goods imported are stainless steel sheets of S.W.G. 26 and the width of 12', 13', 15' and length 10' and are bent in the middle along the length. The material in support of it, ante orders of clearance, inter alia, is the labels attached to the cases in which the goods in dispute are imported showing the following dimensions of the goods:

S.W.G. 26 12' x 10'S.W.G. 26 13' x 10'S.W.G. 26 15''x 10'

As against the above, the following particulars of the goods are declared in the relative Bill of Entry

Stainless Steels Angles I.C.T. Item 63(2)

6'x 6' x 10'

61/2' x 61/2' x 10'

71/2' x 7 1/2' 10'

This clearly indicates the importation of stainless steel sheets in the boxes which contained sheets of 12', 13' and 15''. The Collector of Customs also notes that the examination and obtaining the opinion of the experts was on the basis of a cut sample from the goods imported. If the above material alone is considered, then, in my opinion, the proceeding for revision are not based on mere conjecture; on the contrary there are reasonable grounds for invoking the revisional powers. The Collector of Customs has disclosed the reasons which led him to take proceedings for exercising his revisional power and it cannot be said that it was a mere surmise. On the said material alone the Collector of Customs could express the opinion which he did that the order allowing clearance of the goods imported against the license produced which are not valid licenses for the goods and without recovering proper duty thereon were not in accordance with law nor were they proper orders.

13. The show cause notice then mentions the second opinion of the three experts that the so-called angles of these dimensions are not self supporting and cannot be used as supporting structural member for which angles are commonly used. It then mentions the documents seized by the officers of the Customs House from the premises of the importers showing that the stainless steel sheets were bent in the bending machines by M/s. Nomura Trading Co. Ltd., Japan and their agents. The inference drawn from the second opinion of the experts and the documents seized are detailed in the show cause notice on the basis of which the view is expressed that the goods in question are stainless steel sheets imported in the manner indicated and not stainless sheet angles as declared. The Collector of Customs disclosed the material to the petitioner on the basis of which he intended to actually interfere. Since the show cause notice is composite, it included in it the additional material on the strength of which the Collector of Customs proposed to pass the orders after setting aside the order of clearance made by the officer of Customs under Section 47 of the Act.

14. The power is conferred on the Board under Section 130 of the Act to revise an order and may pass such order thereon as it thinks fit. Whenever such a power is conferred on an authority, the authority is entitled to examine the legality and propriety of the order and to pass such suitable orders as it may think fit in the circumstances of the case before it. In other words a revising authority necessarily has the power to pass such orders as in its opinion the case calls for when the authority is satisfied that it is a fit case for interference. When actually interfering the authority is entitled to hold an enquiry or direct an enquiry to be held and for the purpose admit additional evidence. To arrive at a proper and just decision, there can be no bar to the revising authority to rely upon additional material. This power to admit additional material has been upheld by the Supreme Court even in the case relied upon by the petitioners' counsel.

15. The third contention of, the counsel is that the respondent erred in law in not remitting the refund of the excess duty collected from the petitioners. This contention must succeed. The Bill of Entry was completed and the goods imported assessed to Customs duties under Item 68(2) I.C.T., as stainless steel angles and an order of clearance passed on 17th March, 1969. The assessed duty at 27 1/2 per cent amounting to Rs. 2,40,584.16 was paid and the goods cleared. The Central Government came to the conclusion that the I.S.I. specification for strips and sheets etc., show that flat material even up to 500 to 600 mm is listed as strips; that the so-called angles are nothing but strips bent into the form of angles and as such they are liable to duty at 10 per cent ad valorem under Item 63(14) I.C.T. read with Notification No. 188 of 1965. The Central Government, however, went wholly wrong in taking the view that the petitioners cannot be given the benefit of the lower rate, as they have not lodged any claim within the time limit of six months and no circumstances exist to consider relaxation of the limiting provisions of the Act. This part of the order is contrary to the provisions of Sub-section (3) of Section 27 of the Act which reads as follows:

27(3) Where, as a result of any order passed in appeal or revision under this Act, refund of any duty becomes due to any person, the proper officer may refund the amount to such person without his having to make any claim in that behalf.

The refund of the duty became due to the petitioners as a result of the orders of the Customs Authorities' (Central Government) passed in revision under Section 131 of the Act. Thereafter, It 'is the Statutory obligation of the proper officer to refund the amount without any claim in that behalf.' The period of limitation of six months does not apply to a case like the petitioners which squarely falls under Sub-section (3) of Section 27 of the Act. It is unfortunate that the stand in the affidavit in opposition is that the question of refund does not arise. According to the own decision of the Customs Authorities they had collected excess duty which was not legally due and it was proper that an order of refund should have been made by' the Central Government or the proper officer should have refunded the amount of difference in duty to the petitioners without any claim, I thereforee, direct the respondent to refund within two months to the petitioners the excess-customs duty levied and collected from the petitioners being the difference between the Customs Duty assessable (c) 10% ad valorem and that collected from the petitioners @ 27 1/2%.

16. Another contention of the counsel is that the Central Government has erred in law in fixing the redemption fine of Rupees 10,00,000/-ignoring the fact that under Section 125 of the Act, no redemption fine can be imposed in excess of the market value of the goods. According to the counsel the value of the goods imported was Rs. 8,25,335/-and on it the petitioners were entitled according to the rules to 7 1/2% profit only and thus the market value of the goods imported could not be more than Rs. 8,87,870/-. Another facet of this submission is that the Customs Authorities were bound to give proper reasons and disclose proper evidence or material on the basis of which the quantum of fine was arrived at. The failure to do so is urged as rendering the fine illegal and bad in law. This latter aspect is stated to be rejected. Imposition of fine inlieu of confiscation is discretionary with the Customs Authorities. There is no basis to hold that specific reasons have to be given in each case as to why a particular redemption fine is imposed. The law does not require it and this Court cannot insist. Under Section 125 of the Act the adjudging officer is empowered to give the owner of the goods an option to pay in lieu of confiscation such fine as the officer thinks fit.

17. But under the proviso to Section 125 of the Act such fine cannot exceed the. market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon. The impugned order, while reducing the redemption tine to Rs. 10 lakhs, only says that no further consideration can be given in this regard to the contention that since the petitioners are entitled only to 7 1/2 % profit they will suffer needless loss. The impugned orders also do not show that the Customs Authorities ascertained its market value and the 'redemption fine does not exceed the market value. The affidavit in opposition in this court is only this that 'fine in lieu of confiscation was within the limitations provided under Section 125 of the Customs Act, 1962. The contention that the petitioners were entitled only to 71/2% profit is not correct. State Trading Corporation or Minerals and Metals Trading Corporation do not enforce these conditions,' It is thus impliedly admitted that the petitioners were entitled only to 71/2 per cent margin of profit and not more. The market price, of the goods, prima facie, would be the amount at which the petitioners could legitimately sell, i.e., Rs. 8,87,870/- and this is less than Rs. 10 Lakhs. By relying on South India Coil Mills Poockakkal v. Additional Collector ofCustoms : [1976]3SCR905 , the counsel urges that this Court should reduce the redemption fine as was done by the Supreme Court. On the facts and circumstances of the case, I am not persuaded to usurp the jurisdiction of the Customs Authorities to determine the quantum of the redemption fine, more so when the maximum is related to the market value for which there is no material on the record. I, thereforee, quash the imposition of redemption fine of Rs. 10 Lakhs with liberty to respondent to reimpose the redemption fine which is not in excess of the market value of the goods imported, after ascertaining the then market value.

18. Lastly I may notice two more arguments feebly advanced but not pursued. The first is that there was no justification for confiscation when personal penalty was remitted.Surface if to say that there are two independent provisions in Sections 111(d) and 112 of the Act. The order of confiscation of improperly imported goods is not dependent on the personal penalty under Section 112 but it is otherwise. The second is that the copies of the first opinion of the three expert were not supplied to the petitioners and thus the petitioners were handicapped in the cross-examination, of the three experts. The substance of the first report of the three experts was available on the records and I see no prejudice caused to the petitioners in the non-supply of' the earlier opinions.

19. In the result the writ petition is partly allowed, A writ of mandamus is issued, requiring the respondent to refund within two months to the petitioners the excess customs duty levied and collected from the petitioners, being the difference between the Customs duty at the rate of 10 per cent ad valorem and that collected from the petitioners at the rate of 27 1/2 per cent ad valorem. I also quash the imposition of redemption fine of Rs. 10 lakhs with liberty to the respondent to reimpose the redemption fine in the light of my observations. The other reliefs claimed are declined.

20. In view of partial success and the facts of the case, the parties are left to bear their own costs.


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