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1970 (10) TMI 27 - SC - CustomsWhether for breach of a condition of the licence penalty may be imposed under Section 5 of the Imports and Exports (Control) Act 1947 read with the Sea Customs Act 1878? Held that - The High Court was right in holding that the scope of power under the Sea Customs Act was not enlarged by the amendment to Section 5 of the Imports and Exports (Control) Act and there is nothing in the amended Section 5 of the Imports and Exports (Control) Act which warrants the view that the provisions of the Sea Customs Act 1878 may be invoked to punish the breach of a condition of a licence granted under the Imports and Exports (Control) Act 1947. Appeal dismissed.
Issues:
1. Interpretation of penalty provisions under the Imports and Exports (Control) Act, 1947 and the Sea Customs Act, 1878 in case of breach of license conditions. Analysis: The case involved a dispute regarding the penalty imposed on the respondents for allegedly importing machinery exceeding the value specified in the license granted by the Ministry of Commerce and Industry. The Customs authorities sought penal action against the respondents under the Sea Customs Act for unauthorized importation. The respondents challenged this penalty, leading to a legal battle. The central issue before the Supreme Court was whether penalty for breaching license conditions could be imposed under Section 5 of the Imports and Exports (Control) Act, 1947, read with the Sea Customs Act, 1878. The Court examined the relevant statutory provisions, including Section 167 of the Sea Customs Act, 1878, and Section 3 of the Imports and Exports (Control) Act, 1947. It highlighted that the Sea Customs Act provides for confiscation of goods in case of prohibited importation or exportation, along with penalties for offenders. The Imports and Exports (Control) Act, on the other hand, authorizes prohibition and control on imports and exports. The Court emphasized that the amendment to Section 5 of the Imports and Exports (Control) Act in 1960 expanded the scope to include contravention of any condition of a license. The Court referred to previous judgments to support its interpretation. It cited the case of East India Commercial Company Ltd. v. Collector of Customs, where it was held that penalty could be imposed for contravention of orders under the Imports and Exports (Control) Act but not for breaching license conditions. The Court also mentioned the case of Boothalinga Agencies v. V.T.C. Poriaswami Nadar, which further clarified the implications of the amendment to Section 5. In the present case, the Customs authorities had directed confiscation of the machinery and imposed a penalty for breaching license conditions. However, the Court ruled that under the amended Section 5, penalties for license breaches should be enforced under the Sea Customs Act, not the Imports and Exports (Control) Act. The Court emphasized that the power to confiscate goods and impose penalties for license violations lies under the Sea Customs Act, specifically Section 167 clause 8. Therefore, the order of confiscation and penalty imposed by the Customs authorities was deemed inappropriate. Ultimately, the Supreme Court upheld the decision of the High Court, ruling that the amendment to Section 5 of the Imports and Exports (Control) Act did not empower the Sea Customs Act to penalize breaches of license conditions. The appeal was dismissed, and no costs were awarded.
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