1988 (12) TMI 123 - HC - Customs

Summary

Issues Involved:
1. Maintainability of the writ petition.
2. Alleged misdeclaration and undervaluation of imported goods.
3. Classification of imported goods under OGL or restricted items.
4. Alleged arbitrary and unreasonable adjudication by the Collector of Customs.

Summary:

1. Maintainability of the Writ Petition:
The respondents argued that the writ petition is not maintainable as the petitioners had an alternative remedy under the Customs Act and had previously moved a writ petition on the same grounds. The court, however, held that alternative remedy is not a complete bar to the maintainability of the writ application, especially if the impugned order discloses an error of law apparent on the face of the record or is arbitrary and unreasonable. The court noted that the first writ petition was against the show cause notice, and the present one is against the final order, thus allowing the petitioners to invoke the writ jurisdiction for the second time.

2. Alleged Misdeclaration and Undervaluation:
The respondents contended that the goods were imported in semi-knocked down (SKD) condition and were undervalued. The court found that the charge of undervaluation was not substantiated. The instances referred to in the adjudication order did not indicate any model number or quantity, and the petitioners had provided evidence showing that similar goods were cleared at the same price. The court held that the Customs authorities are bound by their own precedents and cannot change their stance arbitrarily. The court also noted that the adjudication authority did not take into account the invoices and orders made by the Customs authorities in respect of identical items, making the findings perverse and unsustainable.

3. Classification of Imported Goods:
The main contention of the Customs authorities was that the imported items constituted complete T.V. sets in SKD condition and were not covered under Open General Licence (OGL). The court rejected this contention, citing the Supreme Court's decision in Union of India v. Tarachand Gupta & Bros., which held that parts and accessories imported under a valid licence cannot be treated as complete vehicles in CKD condition. The court also referred to the Division Bench decision in Collector of Customs v. Mitsuny Electronic Works, which rejected similar contentions by the revenue. The court emphasized that each consignment has to be separately assessed, and different entities importing different items cannot be clubbed together to form a complete T.V. set.

4. Arbitrary and Unreasonable Adjudication:
The court found that the Collector of Customs acted arbitrarily and without jurisdiction by ignoring relevant decisions of the Supreme Court, High Courts, and Tribunals. The court noted that the Customs authorities had previously cleared similar goods without objection and that the subject consignments were seized on frivolous grounds. The court held that the goods imported were covered under OGL and valid licences, and the department failed to prove any undervaluation.

Conclusion:
The court allowed the writ application, set aside the adjudication order dated 29th September 1987, and directed the Collector of Customs to pass a fresh order of assessment. The court ordered the release of the goods within four days after the new adjudication order, with the duty already paid to be adjusted against the balance duty.