1963 (9) TMI 7 - HC - Customs

Summary

Issues Involved:
1. Validity of the order of confiscation of goods under Clause (8) of Section 167 of the Sea Customs Act.
2. Classification of "black insulating tapes" as "adhesive tapes" under the I.T.C. Schedule.
3. Application of the Madras High Court's judgment.
4. Alleged discrimination under Article 14 of the Constitution.
5. Excessiveness of the fine imposed.
6. Requirement of payment of customs duty before clearance of goods.

Detailed Analysis:

1. Validity of the Order of Confiscation:
The petitioner challenged the validity of the order dated August 28, 1962, passed by the Assistant Collector of Customs, which ordered the confiscation of certain imported goods under Clause (8) of Section 167 of the Sea Customs Act, read with Section 3 of the Imports and Exports (Control) Act, 1947. This order was based on the contention that the petitioner's import license did not cover the imported goods, which were classified as "adhesive tapes" and banned under Serial No. 38 Part II of the I.T.C. Schedule.

2. Classification of "Black Insulating Tapes" as "Adhesive Tapes":
The petitioner argued that the imported goods were "black insulating tapes" and not "adhesive tapes." The petitioner contended that the Assistant Collector of Customs failed to properly interpret the import license and the I.T.C. Schedule. The index in the Import Trade Control Policy Book distinctly categorizes "adhesive tapes" and "black insulating tapes" separately under "electric insulations." The court found merit in the petitioner's argument, indicating that the Assistant Collector's approach was incorrect and arbitrary.

3. Application of the Madras High Court's Judgment:
The petitioner relied on a judgment from the Madras High Court in the case of Rikhbdoss v. Collector of Customs, where it was held that "black insulating tapes" could not be classified as "adhesive tapes." The Assistant Collector of Customs attempted to distinguish this judgment, but the court found this attempt to be a "pretence of perversely distinguishing it from identical facts." The court emphasized that customs officers across India should follow the decisions of High Courts to maintain judicial comity and certainty of law.

4. Alleged Discrimination under Article 14 of the Constitution:
The petitioner claimed that other importers of "black insulating tapes" were allowed to clear their goods with mere warnings, making the confiscation and fine imposed discriminatory and violative of Article 14 of the Constitution. The court found no substance in this contention, stating that the petitioner's goods were treated differently based on specific circumstances.

5. Excessiveness of the Fine Imposed:
The petitioner argued that the fine of Rs. 2,000/- was excessive and had no rational relation to the value of the goods. The court did not find merit in this argument, accepting the respondent's statement that the petitioner would have earned a 200% profit margin on the clearance of the goods.

6. Requirement of Payment of Customs Duty Before Clearance of Goods:
The petitioner contended that the condition to pay customs duty before clearing the goods was invalid under Section 183 of the Sea Customs Act. The court found no substance in this argument, referencing the case of Parmar & Co. v. V.R. Gupte, which upheld similar conditions.

Conclusion:
The court found the Assistant Collector of Customs' order to be arbitrary and perverse, primarily due to the failure to follow the Madras High Court's judgment. Consequently, the order dated August 28, 1962, was quashed and set aside. The court did not find merit in the other contentions regarding discrimination, excessiveness of the fine, and the requirement of paying customs duty before clearance. The respondents were ordered to pay costs.