TMI Blog1989 (10) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... peal under Section 128(a) of the Act and, accordingly, its complaint in that regard is not justified. Appeal dismissed. - 4407 of 1989 - - - Dated:- 19-10-1989 - Murari Mohan Dutt and S. Ratnavel Pandian, JJ. [Judgment per : Murari Mohan Dutt, J.]. - This special leave petition has been heard at length and both parties have made elaborate submissions on the merits of their respective cases and, accordingly, we proceed to dispose of the special leave petition after granting leave. 2. The appellant, Roche Products Limited, a public limited company has, by this appeal, challenged the propriety of the decision of the Division Bench of the Bombay High Court dismissing the appeal preferred by the appellant against the judgment of a learned Single Judge dismissing the writ petition of the appellant. In the writ petition, the appellant challenged the order of the Collector of Customs passed in exercise of his revisional jurisdiction under Section 130(2) of the Customs Act, 1962, hereinafter referred to as 'the Act', directing confiscation of the goods imported by the appellant, but giving to the appellant an option to pay in lieu of such confiscation a fine of Rs. 19,00,000/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gate value of Rs. 53,31,000/- including isoxamine. The licence was valid for a period of 24 months from the date of issue of the same. It, however, contained a condition that all the goods that would be imported under it should only be used in the factory of the appellant. 7. By its letter dated September 20, 1978, addressed to the Under Secretary, Government of India, Ministry of Petroleum, Chemicals and Fertilisers, the appellant stated their difficulties in manufacturing SMX from indigenous materials and made a request that it might be allowed to import isoxamine until the middle of 1979. The appellant also wrote another letter dated September 29,1978 to the said Under Secretary, again pointing out to him, inter alia, the difficulties which the appellant had to face in developing the manufacture of isoxamine from locally produced materials, indigenous articles and ingredients and the delays which had occurred as a consequence. 8. Although the appellant did not get any reply to its representation from the Government permitting it to import isoxamine until the middle of 1979, yet it placed an " order on Hoffmann-La Roche Limited, Basle, Switzerland, for supply of isoxamine and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant in contravention of the Import Trade Control order issued under Section 3 of the Imports and Exports (Control) Act. In the circumstances, the Collector of Customs proposed to review the said unauthorised clearance of the goods. 12. The appellant submitted its reply to the show cause notice contending, inter alia, that the industrial licence dated April 23,1974 granted to it for the manufacture of SMX was still valid and operative. 13. The Collector of Customs, after hearing the appellant and after considering the facts and circumstances of the case, by his order dated November 14,1979, held that the appellant was not an Actual User (Industrial) in respect of the said imported raw material, isoxamine, after April 22,1976, that is to say, after the expiry of two years from the date of issue of the industrial licence to the appellant, and that since the industrial licence was invalid for manufacture of SMX the importation of the raw material, namely, isoxamine, was impermissible. It was also held by the Collector of Customs that the appellant had furnished a false declaration on the basis of which it got the goods cleared by the Customs Officers. Accordingly, the Collector o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under OGL. If that had been the only condition for clearance of the goods then, of course, the Customs Authorities could not confiscate the goods. But, that was not the only condition to be fulfilled by the appellant. Another condition that has to be fulfilled by the appellant is that contained in Paragraph (6) of Appendix 10 of the Import Policy 1978-79 which is as follows :- "(6) All Actual Users, at the time of clearance of goods shall furnish to the Customs Authorities a declaration giving particulars of their registration as an Actual User with the concerned authorities and affirming that such registration has not been cancelled or withdrawn or otherwise made inoperative. In case, where separate registration number is not allotted by the sponsoring authority concerned, the importers shall produce other evidence to the satisfaction of the Customs Authorities that they are registered as industrial units. Actual Users (non-Industrial) shall, at the time of clearance of the goods furnish to the Customs Authorities the original or a photostat copy of the (currently valid) Registration Certificate held by them under the Shops and Establishments Act, Cinematographic Act, or conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Paragraph 5 should be read with the definition of "Actual User" in Clause (1) of Paragraph 5. So read, it is clear that an "Actual User (Industrial)" means an industrial undertaking which is entitled to utilise the imported goods "in the manufacturing process or operations conducted within its authorised premises". Much emphasis has been laid by the learned Counsel for the appellant on the first sentence of Clause (1) of Paragraph 5 - "Actual User" means a person who applies for/secures a licence for the import of any item or an allotment of a canalised item required for his own use, and not for business or trade in it. It is submitted on behalf of the appellant that the appellant having secured the OGL for the import of isoxamine for its own use and not for business or trade in it, the appellant should be held to be an Actual User. We do not find any substance in the contention made on behalf of the appellant. The appellant is not entitled under the industrial licence to utilise the imported goods for its own use for the manufacture of SMX. Even otherwise, the latter part of Clause (1) makes it very clear that the imported goods have to be utilised for the manufacturing process or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such situation, the respondents would only take recourse to Clause 10-C(1) of the Imports (Control) Order. Clause 10-C(1) provides that where, on the importation of any goods or at any time thereafter, the Chief Controller of Imports and Exports is satisfied, after giving a reasonable opportunity to the licensee of being heard in the matter, that such goods cannot be utilised for the purpose for which they were imported he may, by order, direct the licensee or any other person having possession or control of such goods to sell such goods to such persons, within such time, at such price and in such manner as may be specified in the direction. The appellant cannot, in our opinion, take resort to the provision of Clause 10-C(1). That provision is not meant for granting relief to an importer who on the basis of a false declaration gets his goods cleared, nor does it apply to any import which is in violation of the conditions of an industrial licence. Clause 10-C(1) will apply to a case where the goods have been validly imported, but cannot be utilised for some reason or the other. The contention of the appellant is unsound and is rejected. 20. Next contention of the appellant is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or of Customs in exercise of his revisional power under Section 130(2) of the Act. This, in our opinion, is a mere irregularity not affecting the order. Admittedly, the Collector of Customs had the power to confiscate the goods and impose penalty under Section 122 read with Section 124 of the Act. When an authority has the power to do a certain act and in exercise of such power he does the same, but refers to a wrong provision of the law, that would be a mere irregularity and would not vitiate such act. In the instant case also, the Collector of Customs had admittedly the power to confiscate goods and impose penalty and even though in the impugned order it is stated that the confiscation of the goods was made and the penalty was imposed in the exercise of his power under Section 130(2) of the Act, that would not be fatal and vitiate the order. 22. The decision of the Delhi High Court in Addl. Commissioner of Income Tax v.J.K. D'Costa, [1982] 133 ITR 7, strongly relied upon by the appellant, does not apply to the facts and circumstances of the instant case. In that case, the Addl. Commissioner of Income Tax came to the conclusion, inter alia, that the failure of the Income Tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before the Central Board of Excise and Customs under Section 128(a) of the Act. When the Collector of Customs could confiscate the goods and impose penalties only in exercise of his original jurisdiction under Section 122 read with Section 124 of the Act, surely, the appellant had a right of appeal against such confiscation and imposition of penalty. At this stage, we may notice a very significant fact that in the impugned order of the Collector dated November 14,1979, it has been specifically stated at the very outset that an appeal against the order lies to the Central Board of Excise and Customs, New Delhi, within three months from the date of its despatch. It cannot, therefore, be said that the appellant was misled, as the order was purported to have been passed by the Collector of Customs in exercise of his revisional jurisdiction. The appellant, however, did not avail itself of its right of appeal under Section 128(a) of the Act and, accordingly, its complaint in that regard is not justified. 25. Before we part with this appeal, we may dispose of two other minor contentions of the appellant. Counsel for the appellant submits that as the appellant has been found not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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