1994 (10) TMI 81 - HC - Customs

Summary

Issues Involved:
1. Release of detained goods.
2. Jurisdiction of Customs Authorities.
3. Validity of Circulars issued by D.G.F.T. and C.B.E.C.

Summary:

1. Release of Detained Goods:
The petitioner, engaged in import-export, sought a writ of mandamus u/s Article 226 of the Constitution to command the Customs Authorities to release its imported electronic integrated circuits. The petitioner argued that these goods were capable of being used in the manufacture of radios, fulfilling the export obligation under the advance import licence. However, the Assistant Collector of Customs questioned the use of these circuits for radios and detained the goods, prompting the petitioner to file this writ petition.

2. Jurisdiction of Customs Authorities:
The petitioner contended that the Customs Authorities had no jurisdiction to question the use of the imported goods, relying on Circular No. 8/94 issued by the Directorate General of Foreign Trade (D.G.F.T.). The respondents argued that the Customs Act, 1962, is a complete code and the Assistant Collector was performing quasi-judicial functions. The Customs Authorities were within their rights to examine if the imported goods could be used for the manufacture of the export product specified in the licence.

3. Validity of Circulars Issued by D.G.F.T. and C.B.E.C.:
The petitioner challenged the validity of the C.B.E.C. Circular dated 9 May, 1994, which instructed Customs officers not to follow the D.G.F.T. Circular dated 27 April, 1994. The court noted that the Customs Act, 1962, and the Customs Tariff Act, 1975, govern the levy of Customs duties. The C.B.E.C. Circular was deemed valid as it directed adjudicating authorities to act in accordance with exemption notifications issued u/s 25 of the Customs Act. The court emphasized that the Customs Authorities must act as per the law and the statutory notification, even if there appears to be a conflict between the guidelines issued by D.G.F.T. and C.B.E.C.

Conclusion:
The court dismissed the petition, holding that it is for the Customs Authorities to determine if the goods were imported in terms of the licence and what duty, if any, is leviable. The petitioner has a remedy under the Customs Act by way of appeal. The court refrained from making any observations on the merits to avoid prejudicing the case of either party.