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South East Tanning Company Vs. Assistant Collector of Customs - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtChennai High Court
Decided On
Case NumberWrit Petition Nos. 1484 and 1486 of 1970
Judge
Reported in1999(110)ELT453(Mad)
ActsPort Trust Act; Import Trade Regulations
AppellantSouth East Tanning Company
RespondentAssistant Collector of Customs
Appellant AdvocateE.S. Govindan, Adv.
Respondent AdvocateR.G. Rajan, Adv. for ;D.V. Sivagnanam, Adv.
Cases ReferredMetha Paint Works v. The Collector of Customs
Excerpt:
- .....for an ultimate adjudication on the question whether the goods imported were in accord with the goods licenced to be imported. ultimately, the collector of customs came to the conclusion that the goods did not conform to the specification and description in the licence and therefore he imposed a fine of rs. 42,000/- in lieu of confiscation. the petitioner appealed to the central board of revenue who passed the following order.'upon careful consideration of all the arguments put forth by the appellants the board observes that the appellants 'licence covers only certain specific items and 'leather finish agent' has not been specified. even though serbital finds use as leather finishing agent, it is strictly speaking not covered by the licence. however, having regard to the fact that.....
Judgment:

Ramaprasada Rao, J.

1. The Writ Petition coming on for hearing upon perusing the petition and the affidavit filed in W.P. No. 1484/70, the order of the High Court, dated 30-4-1970, and made herein, and the counter affidavit filed herein and the records relating to the Collector of Customs, dated 24-3-1970 in C5/12/13 and 14/69 Group I S8. 407, 408 and 409 in W.P. No. 1484/70 and records from the said Collector and the connected records on the file of the Respondents 2 to 4 and comprised in the return of the Respondents herein to the Writ made by the High Court, and upon hearing the arguments of Shri E.S. Govindan, Advocate for Petitioner in both the Petitioner and of the Central Government Standing Counsel on behalf of the Respondents 1 to 3 and of Shri R.G. Rajan for Shri D.V. Sivagnanam, Advocate for the 4th Respondent in both the petitions, the Court made the following order.

2. The Petitioner, a partner of M/s. South East Tanning Co., 4/5, Vepery High Road, Periamet, Madras, is seeking for a writ of Certiorari and Mandamus; in the former he desires that this court should quash the order of the Collector dated 24-3-1970 and in the latter he seeks a Writ of Mandamus against the Collector of Customs to furnish him with what is known as the Detention Certificate to enable him to obtain relief from the fourth respondent the Port of Madras. The petitioner imported under a valid licence held by him certain articles which according to him were covered by the licence, the licence itself was issued under the Export Promotion Scheme. The Collector interdicts the import at the Customs barrier and was of the view that the goods which were the subject-matter of the importation were not in accordance with those permitted to be imported under the licence. For this purpose, the goods were detained for examination. It is not in dispute in this case that the goods were so detained for customs examination and for an ultimate adjudication on the question whether the goods imported were in accord with the goods licenced to be imported. Ultimately, the Collector of Customs came to the conclusion that the goods did not conform to the specification and description in the licence and therefore he imposed a fine of Rs. 42,000/- in lieu of confiscation. The Petitioner appealed to the Central Board of Revenue who passed the following order.

'Upon careful consideration of all the arguments put forth by the appellants the Board observes that the appellants 'licence covers only certain specific items and 'leather finish agent' has not been specified. Even though Serbital finds use as leather finishing agent, it is strictly speaking not covered by the licence. However, having regard to the fact that under the relevant Export Promotion Scheme, finishing agents for leather were also permissible in the same basis as resin binders for which the appellants held licence, the Board takes a lenient view, remits the fine in lieu of confiscation of Rs. 42,000/-(Rupees forty two thousand only) cash imposed in the three appeals, and directs the goods be allowed clearance against the licence produced by the appellants.'

In the meantime however the goods were in 4th defendant and were suffering demurrage in the hands of the Port Trust, Madras, in accordance with the scale of rates prescribed by the Port and in accordance with the rules laid down by them under the Port Trust Act.The Petitioner's costs is that as the goods were detained for no fault of his, the Collector of Customs is bound to issue the detention certificate which in turn would enable him to secure a free clearance of the goods in the hands of the Port Trust without being burdened with a liability to pay the demurrage as claimed by them. The petitioner, after the disposal of his appeal by the Central Board of Revenue presented an application on 7-11-1969 for grant of such a detention certificate. It appears that the Assistant Collector of Customs dealt with this application and passed the original order. The petitioner under a mistaken impression that an appeal would lie as against that order filed what according to him, is an appeal, but what according to the department is a representation to the Collector of Customs. This was again scrutinised by the Assistant Collector of Customs, who confirmed the order whereby it was made clear that the petitioner was not entitled to the grant of detention Certificate since the goods have been released with 'lenient treatment on a warning'. The petitioner attempted further to take the matter to the Central Board of Revenue, who in their turn, did not entertain the appeal but administratively caused it to be referred back to the Collector of Customs, Madras, for necessary action. On receipt of this direction from the Central Board, the Collector of Customs once again reviewed the request for the issue of a detention certificate on 24-3-1970 and saw no reason to interfere with the order passed by the Assistant Collector of Customs earlier referred to. It is against this order of the Collector of Customs that the petitioner has initiated the present proceedings.

3. W.P. No. 1484 of 1970 is for the issue of a Writ of Certiorari to quash the impugned order dated 24-3-1970 and W.P. No. 1486 of 1970 is for a Writ of Mandamus directing the Collector of Customs to issue the detention certificate as he is alleged in law to do. No doubt the Port Trust is made a party to this Writ Petition so that the final relief if any granted by this Court may be made known to them and obtained in their presence.

4. The main question in these petitions is whether there is any error apparent in the order impugned and even otherwise whether the Collector of Customs, Madras, is bound to issue the Detention Certificate. On a perusal of the order impugned which in turn attracts the initial order dated 18-7-1969, it appears to me that both the Assistant Collector of Customs and the Collector of Customs were under a misapprehension. They were practically interpreting the order of the Central Board of Revenue which I have already extracted. The learned Counsel for the Central Government however impresses upon me that the text of the order of the Central Board of Revenue lends support to the conclusion of both the Assistant Collector of Customs and the Collector of Customs. In short, he would state that when the Board said it was taking a lenient view in remitting the fine in lieu of confiscation of Rs. 42,000/- it would appear that the Board meant to impose a warning to the importer. He gains support for this contention from the post script in the order which means;

'The petitioner should however note that leniency shown this time is not likely to be repeated in future'.

Whatever may be import of this postscript, the order of the Central Board is clear. It directs that the goods be allowed clearance against the licence produced. If however the Central Board intended that the importer should be penalised, by warning them they should have said so. As a matter of fact similar imports were made in the country to the effect that under the Export Promotion Scheme, the finishing agent for leather were also permissible on the same basis as resin binders for which the appellants held licence. Thus the Central Board exercised its mind and were of the view that there was no violation in the matter of this importation and the goods ought to be allowed clearance on the licence as usual. In the context of things, it appears to me that it was never the intention of the Central Board to warn the importer and much less to penalise him. The post script in fact strengthens this view because they would only reserve any such imposition of penalty or warning for a future occasion.The present however in clear, that they were lenient. They excused the petitioner and directed the release of the goods as against the existing licence.

5. It therefore follows that the order dated 18-7-1969 which is practically repeated in the impugned order introduces something which the order of the Central Board does not contain. There is nothing to indicate a introvertly or extrovertly that the Central Board's order projected a warning on the importer for any alleged violation of the Import Trade Regulations. In the order of the Central Board, the order of the Assistant Collector of Customs which was repeated by the Collector of Customs that the goods have been released 'with a lenient treatment on a warning' is an incorrect statement not supported on record.

6. If this is the reasonable conclusion that could be arrived at on the materials placed and facts disclosed, this impugned order suffers from an error apparent and has to be quashed.

7. The other question which incidentally arises is whether the Petitioner is entitled to a Writ of Mandamus. I had occasion to deal with a similar situation in Metha Paint Works v. The Collector of Customs, Madras and Anr., W.P. Nos. 1706 of 1967 and 2326 of 1968. There I said.

'The Customs Authorities while detaining goods for examination and ultimate decision as to the property of the import, undoubtedly deal with the rights of the importer and therefore they do exercise quasi-judicial functions in such a situation. A public duty contemporaneously rests on their shoulders to be quick in their examination or in the alternative to give a detention certificate for the number of days in which they were engaged in such examination, so that the importer may not be penalised by the Port Trust by the infliction of demurrage as per rules.... There is therefore a conceivable nexus between demurrage and the detention certificate. The former is levied by the Port Trust in the absence of the issue of a detention certificate by the customs. In this context it is seen that the duty to grant a detention certificate by the Customs is in the nature of a public duty specially affecting the rights of an individual. The Customs no doubt have the statutory power to check the import but coupled with the power is the duty to act reasonable and discreetly. Mandamus being neither a writ of course nor a writ of right, is generally classed as a legal remedy essentially equitable in content and scope and depends on the circumstances of each case'.

The Petitioner would be entitled to the rule though not as a matter of course but if he satisfies the conscience of the Court that he is not at fault and therefore he should not suffer. The non-issuance of the detention certificate which was occasioned by the violation of the Customs Authorities cannot penalise a third part to the bargain namely the importer himself, if ultimately the importer is found to be free from accusation and his import is allowed clearance on the existing licence. This is what has appenced in this case. The Central Board directed the releases of the goods on the same licence. It follows therefore that the importer was not at default. If the importer is not at fault he is entitled as a matter of right for the issue of the detention certificate at the hands of the Customs Authorities. I have already observed that the right to detain the goods for customs examination is interlaced with the public duty to issue a detention certificate, if ultimately it is found that the importer has not violated any of the conditions of the licence. As it happens, the petitioner did import the goods in accordance with the licence. The order of the Central Board ex facie does not say that they were imposing a warning on the petitioner. The interpretation put upon the order of the Central Board by the Collector is erroneous. In this state of events, the petitioner is entitled to a Writ of Mandamus as prayed for. The Rule NISI in W.P. 1486/70 is made absolute in so far as the Collector of Customs is concerned. In other respects, the rule is discharged. W.P. No. 1484 of 1970 is allowed. In both these petitions, there will be no order as to cost. The detention certificate will be issued within fifteen days from this date or upto the date of issue, whichever is later.


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