9911796707
TMI Blog1988 (12) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... The case of the petitioner is that in or around July 1987, the petitioner purchased 600 pieces of Tape Deck Mechanism from one such Export House, namely, M/s. Mercury Exports on 'High Sea Sales Basis'. 4. The petitioner also purchased 600 pieces each of V.C.R. Top Cover, Bottom Plates and Chasis Front Panel from M/s. Oriental Leather Industries who is also an Export House on 'High Sea Sales' Basis'. 5. Apart from the above-mentioned two High Seas purchases, the petitioner himself imported two consignments of Printed Circuit Board Sub-Assembly, Remote Control and Misc. Hardware. 6. The goods imported by M/s. Mercury Exports and M/s. Oriental Leather Industries are covered by two separate valid import licences dated 16th December, 1986 and 11th February, 1987. The Custom authorities had examined and physically verified the said goods imported by the said two Export Houses. Upon such examination and verification, they found the goods according to the declaration as regards the value and specification. Thereafter they assessed the Customs duly. The Customs authorities permitted the goods imported by M/s. Mercury Exports to be kept in the Bonded Warehouse under section 59 of the-C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d absurd and M/s. Mercury Export is a registered and recognised export house having export of about 1.5 crores per year and 100% export growth. According to the petitioner, the said letter was purported to be back-dated to circumvent and confuse the fact that one hundred prices of Tape Deck mechanism was released by the authorities on August 28, 1987 for home consumption on the basis of the value declared by the petitioner. Due to the withholding of all the above consignments and non-availability of the parts in time, the petitioner's production came to stand still and he lost good market during World Cup Cricket, Puja Festival and Deepwali festival. The petitioner then filed an application under Article 226 of the Constitution of India challenging the illegal search and seizure and orders were passed thereon. On 24th September, 1987 the following order was passed by the Writ Court :- "Considering the submissions of the learned counsel of the respondents, the Collector of Customs is directed to conclude the investigation and/or adjudication before the 8th October, 1987 and the matter will be heard further as to whether the goods can be released. It is made clear that the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opy forwarded to the petitioner, the Assistant Collector of Customs, SIB demanded the sum of Rs. 2,90,672.62 as duty short levied in terms of the adjudication order passed by the Collector on 29th September, 1987. The said amount was also paid by the petitioner under protest. By another letter dated 8th October, 1987 addressed to the importer, M/s. Mercury Exports, respondent No.6and a copy forwarded to the petitioner, the respondent No. 3 further demanded a sum of Rs. 28,119.33 as duty short-levied and the petitioner also paid the said sum under protest. By another demand letter dated 8th October, 1987, the respondent No. 3 demanded further sums of Rs. 68,431.91 and Rs. 24,765.82 and the petitioner also paid the same under protest. So, it appears that the petitioner paid a total sum of Rs. 11,11,990.11. The break up, according to the petitioner, is as follows: (i) Personal penalty as per verbal demand of Assistant Collector of Customs (SIB) and also paid at his office Rs. 5,00,000.00 (ii) Fine as per verbal demand of Assistant Collector of Customs (SIB) stated to be a redemption fine in lieu of confiscation of Printed Circuit Board Sub-assembly consignment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act when the proper officer has accepted licences and assessed the goods after examination of the goods, such an order which is ah order of adjudication in law, can be modified or revised only in a manner known to law. According to the petitioner, there is no legal basis empowering the Collector of Customs with any authority or jurisdiction under the Act to initiate proceedings once over in respect of the goods in question on identical evidence and on identical set of circumstances. After the construction of the Tribunal on and from 11th October, 1982, there is no power of review or revision available to the Collector of Customs under the said Act and the only recourse open to him is to file an appeal in terms of Section 129D of the Act. 16. According to the petitioner, no show cause notices have been served upon the concerned importers, respondent Nos. 6 and 7 nor were they invited to participate in the purported adjudication proceedings. 17. By the said impugned order, the Collector of Customs held that assessable value of goods in question shall be determined ignoring the invoice value declared. He further confiscated the detained goods under Section 111(d)(m) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve laid down the principles of determination of the question as to importation of components in SKD condition. 19. At the hearing, the learned counsel for the respondents has submitted that the present application is not maintainable. According to the respondents, the writ petitioner had earlier moved a writ petition on the very self-same grounds. In the said writ petition, this Court passed certain interim orders. It was contended on behalf of the respondents that this Court should not interfere inasmuch as the Customs Act being a self-contained Act provides the Forum for redressal of any grievance of the importer. The writ petitioner should have exhausted the remedy available under the Act before moving the writ petition. The writ petitioner thereafter withdrew the earlier petition and as such the same was dismissed and thereafter submitted to the jurisdictional adjudicating authority. The Collector after hearing the parties has passed the-adjudication order which is appealable to the Central Excise, Customs and Gold (Control) Appellate Tribunal. Accordingly, the second writ petition is bad in law and/or premature inasmuch as the petitioner has not exhausted the alternative rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the show cause notice." 21. As the settlement failed, which is demonstrated by the order of adjudication, the petitioner has challenged the validity of such order. That apart the first writ petition was against the show cause notice, and the present one is against the final order. Accordingly, it cannot be said that the petitioner cannot invoke the writ jurisdiction for the second time. 22. The next question is whether alternative remedy which has been provided under the Act is an efficacious remedy and whether such remedy completely bars jurisdiction of this court in entertaining the second writ application. It is now well settled that alternative remedy under the relevant statute is not a complete bar to the maintainability of the writ application. It is equally well-settled that if the impugned order is passed without jurisdiction or in violation of the rules of natural justice or it discloses an error of law apparent on the face of the record or if the impugned order is based on extraneous and malafide consideration or the statutory remedy is not adequate or onerous the Court can invoke Article 226 of the Constitution even if there is an alternative remedy under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... item, it becomes a precedent and subsequently it cannot hold that the valuation is not correct. In support of the aforesaid contentions, Mr. Sen relied on a decision of this Court in Kazaria Exports Ltd. v. Collector of Customs Ors. reported in 1986(1) CLJ 231 wherein it has been held that for under-invoicing Customs Authorities may refuse clearance. But, quotation at higher rate would not by itself show under-invoicing of the goods sought to be imported. To arrive at a decision of under-invoicing the concerned authority must act reasonably. When a few months earlier the Authority cleared the goods to others at the same invoice amount, the Authority cannot take the plea of under-invoicing. 24. It is contended on behalf of the respondents that on merits also, the writ petition is liable to be dismissed. The main contentions of the respondents are that the goods are imported in SKD condition and are not covered under Import Licence and/or Open General Licence and are consumer goods and hence not covered by the licence. It is also contended that the goods are undervalued. 25. I shall first take up the question relating to the under-valuation. When the identical goods were impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Corporation v. Union of India reported in 1980 E.L.T. 274 where the Bombay High Court held as follows :- "Once a finding is given by a Superior authority on contentions raised before it, it is binding upon the subordinate authorities in subsequent proceedings, unless some other material is brought to their notice, which compels them to take a contrary view. The Court was concerned with the levy of countervailing duty in that case. The same principle would apply to the levy of excise also. In the present case, no other material was before the subordinate authorities at the time when the show cause notices were issued, which would warrant a different view being taken by the subordinate authority for either the previous or subsequent years or the same years." 28. The declared value of the tape deck mechanism has been accepted by the Customs Authorities by its order dated 29th August, 1987 and consequently the balance goods were released. Once the Customs Authorities have accepted the valuation, they should be bound by their own precedents and estopped from acting to the contrary. 29. Some of the instances set out in the adjudication order regarding valuations are quotations an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsignments were purchased by the petitioners on High Sea Sales Basis while it is alleged by the Customs authorities that the said Export Houses, being respondent No. 6 and 7 were name-lenders only. 32.Petitioner himself imported only one consignment i.e. P.C.B. Sub-assembly without valid import licence. 33.Goods as aforesaid were imported by three different entities and separate individual identities. Therefore, the petitioner cannot be said to have been imported complete V.C.R. in S.K.D. condition. 34.The instances and/or examples set out in the Adjudication Order are mostly based on US Dollar, but the subject importation was valued at Singapore Dollar, conversion of US Dollar into Indian Rupees and then re-conversion to Singapore Dollar is not justified to prove any misdeclaration or under-valuation. The learned counsel on behalf of the petitioners also referred to the decision of the Tribunal in Janata Traders, Bombay v. Collector of Customs, Bombay, reported in 1988 (34) E.L.T.65To reinforce his argument. In my view the Department has failed to establish any case of under-invoicing. 35.Some of the instances set out in the Adjudication order regarding valuation are quot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted to the Exporter clandestinely. In absence of any such proof the authorities should be estopped from alleging under-valuation. There are a few other facts to be noted. 39.The main contention of the Customs Authorities is that the subject consignments are not spares. They are complete VCR set in SKD condition and hence not covered under OGL. This contention is wholly without any substance. Reliance has been placed in the decision of the Supreme Court in Union of India. v. Tarachand Gupta Bros. reported in 1983 E.L.T. 1455. The facts and contentions would appear from the judgment which are reproduced as under :- "The respondents held an important licence dated July 10,1956 permitting them to import parts and accessories of motor scooters as per appendix XX VI of the Import Policy Book for July-December, 1956. Under the said licence, the respondents imported certain goods which arrived in two consignments, each containing 17 cases, by two different ships. According to the respondents, the goods so imported by them were motor cycle parts which their licence authorised them to import. The Customs authorities, on the contrary, held, on examination of the goods, that they consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in knocked down condition. He held, on the other hand, that though the goods were not in completely knocked down condition it made no difference as the tyres, tubes and saddles were easily obtainable in India and their absence did not prevent the machines being otherwise complete. He also found that there was a trade practice under which traders were supplying motor cycles without tyres, tubes and saddles unless the purchaser specially asked for those parts. According to him, the goods could not be regarded as spare parts but ware 'Mopeds in disassembled condition." 40.The Supreme Court noted the argument that since there was a restriction in Entry 295 against imports of motor cycles and scooters in C.K.D. condition, the importer could not be allowed to do indirectly what he could not do directly. The Supreme Court repealed the contention in the following words :- "The argument apparently looks attractive. But the question is what have the respondents done indirectly what they could not have done directly. In the absence of any restriction in Entry 295, namely, that a licence in respect of goods covered by Entry 295 would not be valid for import of parts and accessories which, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a licence in respect of goods covered by Entry 294 under which he could import complete motor cycles and scooter and not against an importer who had a licence to import parts and accessories under entry 295. If Dr. Syed Mohamed's contention were to be right we would have to import remark (ii) against Entry 294 into Entry 295, a thing which obviously is not permissible while construing these entries. Further, such a condition, if one were to be implied in Entry 295, would not fit in as it is a restriction against import of motor cycles and scooters in C.K.D. condition and not their parts and accessories. There is, therefore, no question of a licensee under Entry 295 doing indirectly what he was not allowed to do directly was importing motor cycles and scooters in C.K.D. condition under a licence under which he could import complete cycles and scooters only. That restriction, as already observed, applied to a licence in respect of goods described in Entry 294 and not a licensee in respect of goods covered by Entry 295. The result is that when the Collector examines goods imported under a licence in respect of goods covered by Entry 295 what he has to ascertain is whether the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence in respect of goods covered by entry 295 an importer could import parts and accessories of all kinds and types, he shall not import all of them but only some, so that when put together they would not make them motor cycles and scooters in C.K.D. condition. In the present case even that was not so because he would have to buy tyres, tubes and saddles to convert them into motor cycles and scooters into C.K.D. condition. That would be tantamount to the Collector making a new entry in place of entry 295 which must mean non-compliance of that entry and acting in excess of jurisdiction during the course of his enquiry even though he had embarked upon the enquiry with jurisdiction. In our view that was preciously what the Collector did. This is, therefore, not one of those cases where between two competing entries the statutory authority applied one or the other, though in error, and where a civil court cannot interfere." 42.In Collector of Customs v. Mitsuny Electronic Works reported in 1987 (30) E.L.T. 345, the Division Bench of this Court noted the contention of the revenue and rejected similar contention that was raised in that Court and the contention of the revenue was reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms which are not otherwise contraband on certain terms. The Customs authorities are estopped from extending the said benefits to the petitioner. This only reveals the malafide or harassing attitude of the respondents. 46.Apart from the importation by the petitioner himself the petitioner purchased items imported by two Export Houses on 'High Sea Sales Basis'. In one case, after assessment the goods were allowed to be stored in Bonded Warehouse under section 59 of the Customs Act and in other case, the goods were assessed and upon payment of duty, the goods were also released. The petitioner is a bonafide purchaser of value of those items purchased from the Export House being the respondent Nos. 6 and 7 herein. If those assessments are invalid or illegal for any reason, it is for the Customs authorities to take recourse of the provisions of Section 129D of the Customs Act. They cannot impose any liability on the petitioner who is the purchaser of the imported goods. It is strange that without serving any show cause notice to the Export Houses, the petitioner was sought to be fastened with the liability in respect of the goods purchased from the Export Houses. The demand was made o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impression that the authorities proceeded with vindictively and malafide. The malice in law and fact writ large cannot be ruled out. Even after the adjudication proceedings were over, various summons were issued to the Export Houses who had been selling the authorised goods imported under valid licence to the petitioner. 48.For the reasons aforesaid, it must be held that the finding of the Collector that three consignments of spares of VCR, if assembled would make complete V.C.R. cannot be sustained. The Export Houses, being the respondent Nos. 6 and 7 imported the goods under Open General Licence. Their import was authorised. So long as the assessments made upon them are set aside in accordance with the provisions of the Act, the Revenue cannot indirectly refuse or modify the assessments indirectly which it could not have done directly. The importation of Printed Circuit Board Sub-Assembly by the petitioner himself is without the valid import licence. Therefore, redemption fine for the particular consignment cannot be interfered with even though the redemption fine is on high side having regard to the valuation adopted. There is no evidence that the goods have been under-valued ..... X X X X Extracts X X X X X X X X Extracts X X X X
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