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TMI Blog1988 (10) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... tements of S/Shri Hari Niwas Gupta, Sri Niwas Gupta and R.K. Gupta, partners of the appellant firm were recorded. In his statement dated 23-12-1985 Shri R.K. Gupta inter alia stated that they had imported 43 sets of stitch machines through M/s. International Clothing Industries (P) Ltd., against bill of entry No. 1060/82 dated 3-5-1985; cash No. 1946 dated the 7th June, 1985; that the L/C had been opened by M/s. International Clothing Industries (P) Ltd., that the machines were then imported by the export house and cleared against additional licence No. 2855239 dated 20-9-1985; that they (export house) had taken advance money from them; that after clearance the export house despatched the goods to their office as per their requirements. He further stated that out of the said 43 machines, 35 machines were sold by them and the rest 8 machines were seized by the authorities concerned. As a sequel thereof Shri Akshay Kejriwal, Director of the export house namely International Clothing Industries (P) Ltd., Bombay was also examined under Section 108 of the Customs Act. In his statement Shri Akshay Kejriwal stated that they had imported 43 sewing machines during 1984-85; that they had imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced by the parties it would be useful to state a few admitted facts. There is no dispute that the contraband goods were imported and cleared against Additional Licence No. P/W/2855239/83 dated 20-9-1983. The said Licence allowed import of Capital Goods (i.e. Industrial Sewing Machines in question) listed in Appendix 2 to the I.T.C. Policy April 1983 - March 1984 as per its para 185(1) read with para 186(8). However, its sub-para (4) of para 185 puts a restriction upon such import and provides that such Capital Goods will be disposed of to eligible Actual Users (Industrial) only and information thereof shall be sent to the Licensing Authority and the sponsoring authority concerned, within 15 days from the date of sale or transfer of goods to the Actual User giving out the information mentioned therein. The terms Actual User , Actual User (Industrial) and Actual User (Non-Industrial) had been defined in paragraph 5 of the same Policy. In the instant case we are concerned only with the case of Actual User (Industrial) . 5. Sub-para (3) of Para 5 defines Actual User (Industrial) as follows - (3) Actual User (Industrial) shall mean an industrial undertaking, be it in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported goods as defined under Section 2(25) of the Customs Act. Consequently the contraband goods could not be confiscated under Section 111 of the Customs Act; and (4) that for a breach of condition of Additional Licence against which the contraband goods in question were imported only the Licensing Authority could take the action under the Imports and Exports (Control) Act, 1947 and not the Customs Authorities under the Customs Act, 1962. 7. In reply Shri T.H.K. Ghauri, learned SDR while refuting the contentions raised by the learned counsel for the appellants supported the impugned Order and after drawing our attention to the various provisions of the Customs Act, 1962 cited the following case law - (1) Lakshminarayan v. Collector of Customs, AIR 1961 Cal. 616. (2) Sheikh Mohd. v. Asstt. Collector, Customs, AIR 1970 Cal. 134. (3) Asstt. Collector, Customs v. U.I. Minerals Ltd., AIR 1976 Cal. 21. (4) Collector of Customs Central Excise v. Hindustan Motors, AIR 1975 Cal. 368. (5) N. Devidas S Co. v. Collector of Customs, 1987 (29) E.L.T. 247. 8. Point No. 1 : We have considered the submissions made by the learned counsel for the appellants that once the goods h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct applies to every type of prohibition . That prohibition may be complete or partial. Any restriction on import or export is to an extent a prohibition. In other words all types of prohibitions - Restriction is one type of prohibition. 12. In the instant case the contraband Industrial sewing machines were imported subject to the condition that the same will be disposed of in accordance with sub-para (4) of para 185 of Import and Export Policy April 1983 - March 1984 as extracted above, i.e. to say - (i) the imported goods namely Industrial sewing machines will be disposed of to eligible Actual Users (Industrial) only; and (ii) information thereof shall be sent to the licensing authority and the sponsoring authority concerned, within 15 days from the date of sale or transfer of goods to the Actual User giving out the required information such as name and full address of the Actual User (Industrial), address of the factory of the Actual User (Industrial); and the end-product manufactured by them, date of sale/transfer etc. 13. From the above it is clear that the Industrial sewing machines were permitted to be imported subject to the condition that on importation the importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to confiscation." 14. To this it may be added that admittedly in the instant case the goods were permitted to be imported with the condition that the same will be disposed of to the Actual User (Industrial) only and the information thereof would be given within 15 days to the licensing authority and the sponsoring authority concerned, but the said conditions were not complied with at all. Consequently, under these circumstances it is beyond our comprehension to understand as to how the accrued liability of the imported goods to confiscation which has resulted due to the non-compliance of the conditions subject to which the goods were permitted to be imported is extinguished or wiped out with the order passed by the proper officer under Section 47 of the Customs Act. In the case of Euresian Equipments Chemicals v. Collector of Customs, 1980E.LT. 38(Cal.) =AIR 1980 Cal. 188 a full Bench of the Calcutta High Court while over-ruling its earlier decisions rendered in the case of Jute Investigation Company Ltd. v. S.K. Srivastava, (1973) 77 Cal. WN 501 and Thomas Duff and Company (India) Pvt. Ltd. v. Collector of Customs, 1976 Tax LR 1567 held in para 29 that the goods can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were manufacturers/exporters of garments and had imported Sewing Machines during 1984-85 for their own use. From this stray sentence Shri Nankani tried to built up his argument that if the Director Shri Akshay Kejriwal of International Clothing Industries (P) Ltd., Bombay had imported the Industrial Sewing Machines for their own use the question of violation of post importation condition regarding their disposal to eligible Actual Users (Industrial) as laid down in sub-para (4) of Para 185 of Import and Export Policy April 1983 - March 1984 does not arise. After due consideration, we find no substance in this plea. It is settled rule of appreciation of evidence that the statement of a person should be read as a whole. So read nothing turns out on the said stray sentence. The said statement of Shri Akshay Kejriwal as reproduced in the Adjudication Order reads as follows - 9. Shri Akshay Kejriwal, Director; International Clothing Industries (P) Ltd. Bombay, in his statement under Section 108 of the Customs Act, 1962, inter alia, stated that he was one of the Directors of M/s. International Clothing Industries (P) Ltd., which was recognised export house and were manufacturers/expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be valid for import of Capital Goods listed in Appendix 2 and raw materials, components, consumables and spares (excluding items covered by Appendix 5) which have been placed on Open General Licence for Actual Users (Industrial). This facility will be subject to the same conditions as laid down in para 185 above, except that the endorsement referred to in sub-para 185(3) will not be required in the case of Additional licences which are already non-transferable. Thus from the above it is clear that the importation of the Industrial Sewing Machines against the Additional licences was exempted from prohibition subject to the conditions laid down in Para 185 of the said Policy. While dealing with Point No.1 above we have stated that the Industrial Sewing Machines in the instant case were permitted to be imported subject to the condition that the same would be sold or transferred to Actual Users (Industrial) only and information thereof shall be sent to the Licensing Authority and the sponsoring authority concerned, within 15 days from the date of sale or transfer of goods to the Actual User as stipulated in sub-para (4) of Para 185 of the Import and Export Policy for the relevant pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the light of the above we reject the said contention of the learned counsel for the appellants. 21. Point No. 3 : The other contention of the learned counsel for the appellants that since the contraband goods were cleared under Section 47 of the Customs Act for home consumption the same ceased to be imported goods as defined under Section 2(25) of the Customs Act and therefore could not be confiscated under Section 111 of the Customs Act is also without any substance. Section 111 (0) speaks of any goods and not of the imported goods . The term goods has been defined in sub-section (22) of Section 2 of the Customs Act as follows - (22) goods" includes - (a) vessels, aircrafts and vehicles; (b) stores; (c) baggage; (d) currency and negotiable instruments; and (e) any other kind of movable property;" The expression imported goods is defined in sub-section (25) of Section 2 as follows - (25) imported goods" means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption;" 22. The contraband imported Industrial sewing machines are goods as defined in Section 2(22), ibid is not in di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be replaced with the meaning given in the definitions. 5. If, therefore, the words brought from a place outside India are merely descriptive of the words goods they do not signify the act of bringing them in. They do not exclude even by implication goods cleared for home consumption. When once the words imported goods do not find a place in Section 111, it is unnecessary to specify therein further that the goods liable to confiscation include those that have been cleared for home consumption. In other words, if it were the legislative intent to exclude goods cleared for home consumption from any liability to confiscation, all that was necessary was to substitute the words goods brought from a place outside India with the words imported goods . Nothing would have been easier." 24. Thus we reject the aforesaid contention. 25. Point No. 4: The contention of the learned counsel for the appellants that for a breach of condition of Additional Licence against which the contraband goods in question were imported only the Licensing Authority could take the action under the Imports and Exports (Control) Act, 1947 and not the Customs Authorities under the Customs Act, 1962 app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the effect that on importation such goods will be disposed of to the eligible Actual Users (Industrial) only and information thereof will be sent to the Licencing Authority and the sponsoring authority concerned within the given time as prescribed under sub-para (4) of para 185, ibid. Thus when in the instant case it was found that the condition by way of restriction was put on importation of the Industrial sewing machines i.e. the same on importation will be disposed of to Actual Users (Industrial) no exception can be taken for drawing the proceedings for confiscation under the Customs Act by the Customs Authorities if it is established that the said condition was not complied with. To be terse, when the contraband Industrial sewing machines were allowed to be imported against the Additional Licences in the instant case with the condition that the goods so imported would be disposed of to the Actual Users (Industrial) only and information thereof shall be sent to the Licencing Authority and the sponsoring authority within 15 days from the date of sale or transfer of the goods to Actual User, the goods so cleared against the Additional Licences became prohibited on the non-observan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1878. The said Act now stands repealed by the Customs Act, 1962. In the Sea Customs Act the expression prohibited goods was not defined. Section 2(33) of the Customs Act, 1962 now defines the expression prohibited goods . Likewise Section 111 (o) in the Customs Act, 1962 is a new provision. Hence, the case of the appellants has to be decided in the light of the provisions available in the Customs Act, 1962 and the case of East India Commercial Company, supra is not applicable to the instant case. Even otherwise the liability for breach of a condition of the licence granted under the provisions of the Imports and Exports Control Act, 1947 and the liability of the goods to be confiscated for violation of the provisions of Section 111 of the Customs Act are independent and distinct in their nature and both the authorities under the Customs Act and the Imports Exports (Control) Act, 1947 are free to take action under their respective Acts according to law. Thus we reject the contention of the learned counsel for the appellants and hold that the Customs Authorities were competent to confiscate the goods in question under Section 111 (o) of the Customs Act. 28. In the result ..... X X X X Extracts X X X X X X X X Extracts X X X X
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