1960 (6) TMI 1 - HC - Customs

Summary

Issues Involved:
1. Validity of the import license for tape recorders.
2. Error apparent on the face of the record.
3. Violation of principles of natural justice.
4. Rational relation between the fine imposed and the value of goods.
5. Jurisdiction to impose personal penalty.

Detailed Analysis:

1. Validity of the Import License for Tape Recorders:
The petitioner challenged the confiscation of goods under the Sea Customs Act and the Imports and Exports (Control) Act. The petitioner held two licenses, dated July 4, 1956, and June 5, 1956, for importing parts of office machines and dictating machines respectively. The goods imported were 22 cases of tape recorders. The Assistant Collector of Customs, Bombay, deemed the licenses invalid for importing complete tape recorders, which should be classified under Item 73 of the I.T.C. Schedule, requiring a license under serial No. 78/V. The petitioner argued that the licenses under serial number 65 (6) (a) (iii) of part V of I.T.C. Schedule allowed the import of completely assembled tape recorders.

2. Error Apparent on the Face of the Record:
The petitioner contended that the impugned order contained an error apparent on the face of the record. The Assistant Collector's order failed to address the petitioner's argument that the licenses under serial number 65 (6) (a) (iii) covered the importation of tape recorders. The order only stated that the goods were complete tape recorders assessable under Item 73 of the I.T.C. Schedule and did not consider the petitioner's contention that the description in the licenses was sufficient for importing tape recorders. The court found that the relevant contentions and facts were not considered, leading to an error on the face of the record.

3. Violation of Principles of Natural Justice:
The petitioner argued that the principles of natural justice were violated as the personal hearing was given by one officer, A.V. Venkateswaran, while the order was passed by another, M.G. Abrol, without a subsequent hearing. The court referenced the Supreme Court's decision in G. Nageswara Rao v. A.P.S.R.T. Corporation, which emphasized that personal hearing should be conducted by the decision-maker. The court found that the petitioner's representation submitted in January 1958 was not considered in the impugned order, indicating a failure to afford a fair hearing and a violation of natural justice.

4. Rational Relation Between the Fine Imposed and the Value of Goods:
The petitioner contended that the fine of Rs. 33,000 was disproportionate to the value of the goods, Rs. 24,640, indicating non-application of mind. The court referred to the decision in Misc. Application No. 436 of 1958, which emphasized that fines should be rational and not arbitrary. However, the Assistant Collector's affidavit stated that the fine was based on the market price of the goods, including profit margins. The court concluded that it was not within its purview to substitute its judgment for that of the Customs authorities, who had considered the relevant factors.

5. Jurisdiction to Impose Personal Penalty:
The petitioner argued that the personal penalty of Rs. 16,000 exceeded the jurisdictional limit under Section 167 (8) of the Sea Customs Act, which capped personal penalties at Rs. 1,000. The court acknowledged that this position was incontrovertible and did not require further argument, thereby agreeing with the petitioner.

Conclusion:
The court quashed and set aside the order dated January 31, 1958, due to the error apparent on the face of the record and the violation of principles of natural justice. However, the court did not award costs to the petitioner, noting that the petitioner had failed to present himself for a hearing despite extensions.