9911796707
TMI Blog1966 (2) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... ctober 5, 1964 from Messrs. British Bloodstock Agency Ltd., London, informing him that one of its clients was interested in obtaining a foal by his stallion Pieta from the said client's Brood Mare. It was eventually agreed by and between the appellant and the said Messrs. British Bloodstock Agency Ltd., that one of its clients, the Glasgow Stud Farm would lease a brown English mare to the appellant, which would be shipped to India and would be kept there pending her producing two foals by the appellant's breeding race-horse Pieta , after which the mare would be returned to England. The petitioner returned to Calcutta on November 7, 1964 by air and submitted at Dum Dum Airport an international passenger's Baggage Declaration indicating that 7 unaccompanied baggages would follow him by sea or air. Eventually, a brown mare by the name of Jury Maid was shipped to Calcutta by S.S. Chinkoa , which was due to arrive at Calcutta on or about December 25, 1964. On or about January 7, 1965 the appellant through his clearing agents submitted to the Customs authority a second Baggage Declaration for clearance of the said mare which was stated to be arriving at the Port of Calcutta by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary 1965, the Assistant Collector of Customs issued a show cause notice which is annexure I to the petition and appears at pages 35 to 36 of the Paper Book. Firstly, it states that the imported mare was a high pedigree animal used for breeding purposes and the value was under-estimated. No proper certificate from the Director of Animal Husbandry of the State of West Bengal had been produced. Secondly, the importation of such a horse required an I.T.C. licence but no such licence had been produced. The goods, therefore, had been imported in contravention of Government of India, Ministry of Commerce and Industries Order No. 17/55 dated 7th December, 1955 read with section 3(1) of the Imports Exports (Control) Act 1947. The notice concluded as follows : You are called upon to show cause to the Collector of Customs within 7 days from the date of issue why the goods should not be confiscated and action taken against you under sec. 3(2) of the Imports Exports (Control) Act, you are also asked to state whether you would require to be heard in person. If you desire a personal hearing, this can be arranged by previous appointment with the Collector of Customs. All corroborative evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re does not belong to Shri Omer. It has been leased to Shri Omer for producing two foals in India and later return to England duly tested positively pregnant to Pieta. It is quite clearly a business deal and not a case of importation of a pet animal. In this connection, it is also relevant that pet animals of passengers for purposes of I.T.C. exemption would be those which passengers carry with them even during their travels and which invariably stay with the passengers in their houses. From that point of view too, this particular animal cannot be considered as a pet brought by a passenger. Under the circumstances an offence warranting penal action under section 111(d) of the Customs Act is clearly established. Since Shri Omer arranged for the importation of this animal he rendered himself liable for action under section 112 of the Customs Act, 1962. In view of the foregoing, I confiscate the animal in question under section 111(d) of the Customs Act, 1962 read with section 3(2) of the Imports and Exports (Control Act) 1947, as amended. I also impose on Shri S.M. Omer a personal penalty of Rs. 5,000 (Rs. Five thousand only) under section 112 of the Customs Act, 1962, for having i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as follows :- (33) prohibited goods means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with. The next section is Section 11 of the said Act, which is contained in Chapter IV, with the heading Prohibitions on importation and exportation of goods . Sub-section (1) runs as follows :- 11(1) If the Central Government is satisfied that it is necessary so to do for any of the purposes specified in sub-section (2), it may, by notification in the Official Gazette, prohibit either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification, the import or export of goods of any specified description. 6. Sub-section (2) specified certain purposes referred to in sub-section (1). So far as Section 11 is concerned, there are only two notifications that could be discovered and which are set out at pages 307 to 309 of the commentary on the Customs Act by A.N. Nanda (2nd Edn.). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed classes of cases, and subject to such exceptions if any, as may be made by or under the order :- (a) the import, export, carriage coastwise or shipment as ships stores of goods of any specified description; (b) the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which they are being carried. (2) All goods to which any order under sub-section (1) applies shall be deemed to be goods of which the imports or export has been prohibited or restricted under section 19 of the Sea Customs Act, 1878 (VIII of 1878) and all the provisions of that Act shall have effect accordingly, except that section 183 thereof shall have effect as if for the word shall therein the word may were substituted. * * * * Section 5 deals with penalty in the case of contravention or attempted contravention of any order made under the Act. In exercise of the powers conferred by section 3 of the Imports and Exports (Control) Act, 1947, the Government of India has promulgated an order known as the Imports (Control) Order, 1955 date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of import of dogs and cats originating from countries where Rabies infection is known to exist, a health certificate containing a record of vaccination, the vaccine used, brew of the vaccine and the name of the production laboratory and to the effect that the dog/cat was vaccinated against Rabies more than one month, but within 12 months prior to actual embarkation with nervous tissue vaccine or within 36 months prior to actual embarkation with chicken embryo vaccine, both vaccines having previously passed satisfactory potency tests. (iii) In the case of parrots, a certificate to the effect that the parrots were subjected to a compliment fixation test for Psittaoosis with negative results within 30 days prior to actual embarkation. The first point taken in this case, directly involves clause 4 of the last-mentioned notice issued by the Government of India as set out above. Briefly put, the argument is that the mare Jury Maid was imported by the appellant and is excluded from import trade control restrictions under clause 4, as it comes within the heading pet animals . In order to consider this point, it would be necessary also to refer to a public notice of im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied to a lamb reared by hand. Any animal tame and fondled . 11. There is no such species of animal known as pet animal . What happens is that certain kind of animals or birds are often domesticated and when a particular person becomes fond of such an animal or bird it may be said to have become a pet of that person, and may be called a 'pet animal'. It is a subjective expression. In the present case, the mare Jury Maid was not the pet of any particular person. So far as the appellant is concerned, he had not even seen the mare when it arrived in India. It cannot be said that he became fond of it at any relevant point of time. In actual life we find that men have at times become fond of strange animals like lions, tigers and even crocodiles. It was not intended to make the baggage rules a warrant for transforming passenger ships into a Noah's Ark. 'Pet animals' in clause 4 means an animal usually kept as a pet, like dogs, cats and even horses. But in order to qualify, not only should the animal belong to such a class, but must be the pet of a particular person. 12. The position seems to be quite clear. Section 3 of the Imports and Exports (Control) Act, 1947 giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrolling . It is argued that these are three different categories altogether. In other words, prohibition means absolute prohibition which is to be differentiated from restriction or control. Coming now to clause 3 of the Import (Control) Order, 1955 it is pointed out that the heading is restriction on import of certain goods . Sub-clause (1) provides that in the case of restricted goods, a licence or customs clearance permit must be obtained as a pre-condition of import. It is argued that the word restriction used in the heading shows that the obtaining of a licence is not a prohibition as contemplated in sub-section (1) of section 3 of the Imports and Exports (Control) Act, 1947. Finally, it is argued that under Section 111(d) of the said Act, there can be a confiscation only if there is an import contrary to any prohibition imposed by any law for the time being in force. It is contended that in this case there is no prohibition but only restriction. Attractive as this argument may seem, it does not seem to be acceptable for the following reasons : We are concerned in this case with the word prohibition used in Section 111(d) of the Customs Act, 1962. I have already set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum in his possession. Upon investigation it was found that he was taking with him in the ship, a motor car in which there was a secret chamber in which was concealed more than three lakhs of Indian currency, as also a large amount of American dollars. Thereupon, the same was confiscated. It was inter-alia argued that under Section 167(73) of the said Act, there could be confiscation only if the importation of the goods was prohibited. It was argued that prohibition meant absolute prohibition under Section 18 of the Sea Customs Act, 1878 and did not apply to goods like currency in respect of which there was only a restriction. Nayar J., said as follows :- It is argued that apart from dutiable goods (of which there is no question in this case) this item speaks only of prohibited goods and that therefore it can apply only to goods in respect of which there is an absolute prohibition under S. l8 and not to goods like currency in respect of which there is only a restriction under S. l9 of the Sea Customs Act. It is also pointed out that both the heading of S. 8 of the Foreign Exchange Regulation Act and the body of Section 23A of that Act refer to what is imposed by S. 8 as a restr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as issued on 25th August, 1948 to the effect that except with the general or special permission of the Reserve Bank no person shall bring or send into India, any gold etc. The Reserve Bank issued notification dated 25th August, 1948 whereby conditions were laid down for granting permission for the importation of gold etc. The object of citing this decision is to consider how the Supreme Court viewed the case of a prohibition with a condition attached. This is how Ayyangar J. puts it :- When one turns to the main provision whose contraven tion is the subject of the penalty imposed by sec. 23(1-A) viz., S. 8(1) in the present context, one reaches the conclusion that there is no scope for the invocation of the rule of mens rea. It lays an absolute embargo upon persons who without the special or general permission of the Reserve Bank and after satisfying the conditions, it any, prescribed by the Bank bring or send into India any gold etc., the absoluteness being emphasised, as we have already pointed out, by the terms of S. 24(1) of the Act. 16. The position, therefore, is as follows : Under the Foreign Exchange Regulation Act read with the notice of the Reserve Bank, the importa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order themselves are an express and unqualified prohibition of the acts done in this case by St. Margarets Trust Ltd. What was alleged in that case was that St. Margarets Trust Ltd. had contravened the conditions laid down in the Second Schedule. Thus, we find that a prohibition with a condition, where the condition was not fulfilled was described as an Express and unqualified prohibition . With reference to the Supreme Court decisions mentioned above, Mr. Gorai has argued that they are cases under the Foreign Exchange Regulation Act, 1947 and are not applicable to the facts of this case. The Foreign Exchange Regulation Act, 1947 is an Act to regulate certain payments dealing in foreign exchange and securities and the import and export into and out of India, of currency and bullion. The relevant part of Section 8 of the Foreign Exchange Regulation Act, 1947 runs as follows :- 8. Restrictions on import and export of certain currency and bullion. - (1) The Central Government may, by notification in the official Gazette, order that, subject to such exemption, if any, as may be contained in the notification, no person shall, except with the general or special permission of the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lia by Section 11 of the said Act. The argument is that since there is no reference to any notification in Section 3(2), there can be no prohibition or restriction in the instant case, because no notification has been issued under Section 11 relating to horses. In fact, in the only two notifications issued under Section 11, there is no mention of horses. It is argued that unless such a notification is issued under Section 11 there cannot be said to be any prohibition under it, in spite of the provisions of sub-section (2) of Section 3 of the Imports and Exports (Control) Act, 1947. I am unable to appreciate this argument. Under Section 23A of the Foreign Exchange Regulation Act, 1947, the restrictions imposed by Section 8(1) thereof shall be deemed to have been imposed under Section 11 of the Customs Act, 1962. In such a case, a fresh notification under Section 11 was accordingly not necessary, as the deeming provision makes a notification under Section 8(1) of the Foreign Exchange Regulation Act, 1947 effective as a notification under Section 11 of the said Act. Similarly, under sub-section (2) of Section 3 of the Imports and Exports (Control) Act, 1947 all goods to which any orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be unloaded in contravention of the provisions of Section 33 or Section 34 . In such a case, the import is not prohibited, and yet there is a provision for confiscation if the unloading is done in contravention of Section 33 or Section 34. Mr. Gorai has also argued that the obtaining of a licence cannot be called a condition. I am unable to accept this argument. If goods are prohibited from being imported except under a licence, the obtaining of a licence is clearly a condition for importation. In fact, it is a precondition. 20. For the reasons aforesaid I am of the opinion that the second point raised has not been substantiated. In other words, in my opinion, the Imports Exports (Control) Act, 1947 read with the Import (Control) Order, 1955 and the schedule thereto, have laid down that the importation of horses into India could only be done subject to the obtaining of a valid licence or a customs clearance permit. This is a prohibition with a condition and where the condition has not been fulfilled the goods are prohibited goods and comes within the mischief of Section 125 of the said Act. That being so, the adjudging officer had a discretion to impose a fine or not and w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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