TMI Blog1988 (12) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... s also one of the Directors of the first petitioner M/s. Trident Television Private Limited. Both the petitioners are engaged in manufacture of Colour Television duly registered with the Director of Small Scale Industries. Both the petitioners have set up Small Scale Industries. They have Central Excise Licences. 3. The case of the petitioners is that they have been granted Import Licences such as Actual User Licence by the Joint Chief Controller of Imports Exports and they are eligible to import items of Open General Licence - listed in Appendix 6 of the Import Policy, 1985-88 as Actual Users. The petitioners are also eligible to import as transferee of REP Transferable Import Licence under Export Promotion Scheme for registered exporters and eligible to purchase import materials from Export House under Export House Scheme and as such they are authorised to import and/or acquire the various components and - material parts of T.V., VCR and Electronic Typewriters and various allied parts in connection thereto. 4. In or about July, 1987, the said firm being the second petitioner imported from Singapore 500 Sets Printed Circuit Board, Sub-Assembly, Speakers, degaussing Coil and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le the goods were being physically checked by the officers at NSD Docks, suddenly officers of the Dock Intelligent Unit (Appraising) of Collector of Customs seized the duty paid Bill of Entry and other documents. However, the goods were permitted to be removed for warehousing under Section 49 of the Customs Act. 8. On 7th August, 1987, the officers of the Special Investigation Branch from the Office of the Collector of Customs assisted by Officers of the Enforcement Department FERA conducted search and seizure on the strength of the single search warrant having two names and addresses jointly i.e. Trident Electronics, A/2D, Kyd Street, Calcutta and Western Commercial Corporation, 30 Jawaharlal Nehru Road, 16/B, Chowringhee Mansion, Calcutta. According to the petitioners, the said firm and the said company has no connection with the said firm Western Commercial Corporation. 9. On 7th August, 1987, the said officers conducted a search and seizure and seized from the petitioners' Madan Street Office one file containing relevant papers, 48 pieces of imported integrated circuit No. M 58485 P, 29 pieces of Tuning Block, 2 pieces of National Remote - Control Unit, 9 pieces of Upper dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents and requested him to release at least 25% of the consignment against personal bond to avoid closure of the factories. 16. Since the World Cup Cricket Tournament was to be staged at Calcutta after the puja vacation on 25th September 1987 the petitioners filed an application under Article 226 of the Constitution of India before this Court whereupon 50% of the goods were released pursuant to the order of this court. Thereafter there were talks of settlement and the said writ application and the appeal filed by the petitioners against the refusal to direct release of the entire goods which had been filed subsequently, were withdrawn by the petitioners. According to the petitioners, this withdrawal was made on the basis of the promise held out to the petitioners and particularly because of the goods are urgently required by the petitioners during the ensuing puja festivals and in the Reliance World Cup Cricket Tournament. 17. The case of the petitioners is that instead of reasonable or judicious loading of the value, the Collector of Customs by the order of adjudication dated September 29,1987 enhanced the price and imposed fine to the extent of Rs. 4,14,000/- and penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yoke coil are different from those covered under OGL. According to them, the goods were imported without valid licence and therefore liable to confiscation under Section 111(d) of the Customs Act, 1962, and for misdeclaration of the value of the goods, the same are liable to confiscation under Section 111(m) of the Customs Act, 1962. The respondents stated that as it prima facie appeared in course of investigation that the importers have unauthorisedly imported without proper licence 500 complete sets of Sony Trinitron KV 2092E Colour TV sets in SKD condition, a notice under Section 110 of the Customs Act, 1962 was issued. 19. The main contentions of the respondents are that the goods are imported in SKD condition and are not covered under Import Licence and/or OGL and are consumer goods and hence not covered by the licence. It is also contended that the goods are also undervalued. 20. The petitioners in their affidavit-in-reply contended that the three consignments are separate and the prices have been duly declared. They strongly denied that 500 sets of 20" Colour T.V. of Sony. Trinitron KV 2092E brand of Japanese Origin were imported in semi-knocked down condition with orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable 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 remedy provided by the Act by way of preferring an appeal to the Tribunal. It is also contended that the writ petitioners have not challenged nor can they challenge the jurisdiction of the adjudicating authority in adjudicating the matter nor have they pointed out any procedural infirmities in passing the said order. 22. I am, however, unable to accept this contention. It is true that the writ petitioners moved earlier and certain interim orders were made in the said writ application. The writ petitioners also preferred an appeal against the said interim orders refusing to release the entire consignment. There is no doubt in my mind that there was some understanding between the writ petitioners and the respondents regarding the manner and mode of assessment to be made. But for one reason or other, the respondents did not rise up to the expectation. The writ petition and the appeal arising out of such writ petition were withdrawn in the expectation that the respondents would jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutory remedy is not adequate or onerous the Court can invoke Article 226 of the Constitution even if there is an alternative remedy under the statue. The court can also interfere where the resort to statutory remedy would cause irreparable injury to the citizen or where the impugned order infringes on a fundamental right of a citizen or where the impugned order betrays complete non-application of mind. The petitioners have challenged the impugned order on the ground that it discloses an error of law apparent on the face of the records - error of law which would render the adjudication order invalid. It may be that the Collector had the jurisdiction to pass the adjudication order under the Act, but if such order demonstrates arbitrariness or on the face of it manifests error of law, in that event, this court can allow the writ petitioners to invoke the jurisdiction. In this case, Collector had adjudicated and passed an order which is highly prejudicial to the petitioners. If this order has to be challenged in the appropriate forum, the petitioners may not get the desired relief for long time to come. This aspect of the matter cannot be overlooked in considering whether the applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in absence of any specific licence is an unauthorised importation and is liable to be confiscated. It is also contended that in any case there was under-valuation of the goods imported by the petitioners. In substance the contention of the Customs authorities is that the goods are imported in SKD condition and are not covered under OGL. These are consumer goods and accordingly not covered by the licence and secondly the goods are under-valued. I shall first deal with the contention regarding under-valuation. 27. The charge of under-valuation is not substantiated on the facts of the case. The instances and/or examples referred to in the adjudication order with respect to the Colour Picture Tube does not indicate any model number. Number of pieces imported are also not mentioned. According to the petitioners, in the International as well as Inland Trade, the prices vary according to the quality of the goods i.e. Model number and the quantity of import. An importer of bulk quantity naturally enjoys a higher discount and/or advantage than an importer of small quantity. Moreover, the contract entered into by the petitioners with the foreign supplier pertains to much earlier period whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll rigour to Administrative Agencies and Officers, and whether a reasonable latitude should be given to them or administrative Tribunals to correct or modify their previous decisions may still remain debatable controversy in the world of law; nevertheless I am clearly of the opinion that neither the Appraiser nor the Collector of Customs can change his mind from time to time in respect of the same articles by assessing them in the case of one importer under one section and then assessing them for another importer under different section. To allow the Customs to do so will lead to utter confusion on the very basis and principles of taxation and grave uncertainty in business and foreign trade of India." "The Customs are bound by their own precedents in administering taxing statues involving the very basis of taxation in respect of particular article and not leave it to them to modify their own previous decisions to leave it to them to Courts or Parliament or Legislatures, as the case may be, to put the law beyond doubt .... Tariff rulings are in the nature of administrative directions or guides......These departmental instructions, guides or rulings can always be examined by Courts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and contract is concluded and actual sale takes, the price may then indicate whether there is any case of under-invoicing. In Kazaria Exports Ltd. and Ors. v. Collector of Customs Ors. reported in 1986 (1) CLJ 231, Umesh Banerji, J. considered at length this aspect of the matter and negatived the contention of the Revenue. A higher quotation would not by itself without there being any other material or evidence justify the inference of under-invoicing. 33. I fail to appreciate how the Customs authorities can bypass the orders passed by the Tribunal dealing with the identical issues. There must be some finality somewhere. The Customs Authorities cannot ignore the decision of the Tribunal and come to a finding contrary to the decision of the Tribunal. An assessee has the right to arrange its affairs on the basis of views taken consistently by the Tribunal. If the authorities take different views at different times at different ports on the same set of facts, the assessee will suffer the consequence. The order of Appellate Authority is binding on the subordinate authorities even in the subsequent proceeding. The Collector has acted without jurisdiction in not considering the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h appears to be high. The same plea was made for other items like accessory and miscellaneous. Regarding picture tube, it was submitted that it was the practice of this Custom House to allow such goods to be cleared all along. Since this is the established practice, there should not be any sudden change on it. Regarding the price of Picture Tube, it is submitted that there is importation by the Government Agency and the same are in US Dollar 50-65. In view of this, loading the goods from 136 to 230 is too high and not reasonable. It is submitted that it should be round 160 dollars or so. The same plea was made for the plastic parts." 36. The petitioners also relied on the invoices and orders made by the Customs authorities in respect of identical items. The adjudication authority did not take account any of the materials. The findings of the Collector are therefore perverse and cannot be sustained. 37. The main contention of the Customs authorities is that the subject consignments are not spares. They are complete T.V. Sets 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 Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res and control cables and grips, had been imported in equal numbers - All these went to show that the goods were not imported as spare parts but as complete vehicles in a knocked down condition. The goods were therefore considered to be correctly classifiable under Item 75 (2) of the I.C.T. corresponding to S.No. 294/IV of the I.T.C. Schedule. The licence under which clearance was-sought, could not, therefore, be accepted." The Deputy Collector rejected the respondents' contention that the two consignments which arrived in two different ships at different dates should be viewed separately, that the machines were incomplete as they were without tyres, tubes and saddles, and therefore, they could not be said to constitute motor cycles 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 thos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooters in C.K.D condition. Such a condition was advisedly not placed in Entry 295 but was put in Entry 294 only. The reason was that import of both motor cycles and scooters as also parts and accessories thereof was permitted, of the first under Entry 294 and of the other under Entry 295. A trader having a licence in respect of goods covered by Entry 294 could import assembled motor cycles and scooters, but not those vehicles in C.K.D. condition, unless he was a manufacturer and had obtained a separate licence therefor from the Controller of Imports who, as aforesaid, was authorised to issue such a licence on an ad hoc basis. Thus the restriction not to import motor cycles and scooters in C.K.D. condition was against an importer holding a licence in respect of goods covered by Entry 294 under which he could import complete motor cycles and scooters and not against an importer who had a licence to import parts and accessories under Entry 295. If Dr. Syed Mohammed'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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or cycles and scooters in C.K.D. condition. Remark (ii) containing that prohibition had nothing to do with Entry 295 which did not contain any limitations or restrictions whatsoever against imports of parts and accessories. That being so, if an importer has imported parts and accessories, his import would be of the articles covered by Entry 295. The Collector could not say, if they were so covered by Entry 295, that when lumped together, they would constitute other articles, namely motor cycles and scooters in C.K.D. condition. Such a process, if adopted by the Collector would mean that he was inserting in Entry 295 a restriction which was not there. That obviously he had no power to do. Such a restriction would mean that though under a licence 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 vehicles 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 tanta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts and components, the revenue authorities cannot take the plea that if those are assembled together, there would be complete T.V. Set. This is exactly what has been done in this particular case, notwithstanding the decisions of the Courts and Tribunals as mentioned earlier. 41. The contention of the revenue was that those decisions have no application on the facts and circumstances of this case. It is contended that the importation in Mitsuny Electronic Works was made prior to introduction of Item 122 in Appendix 2 Part 'B'. It is also contended that the case of Tarachand Gupta (supra) has no application inasmuch as the goods imported in that case were admittedly complete knocked down condition C.K.D., whereas in the instant case the goods imported are semi-knocked down condition S.K.D. which fairly fall under new Item in Appendix 2 Part 'B'. The learned Counsel has sought to distinguish the case of Debabrata Kanjilal (supra) on the ground the question involved in that case whether the Directorate of Intelligence can make second seizure and initiate further adjudication proceedings in respect of the very same goods which had been released by the proper Customs authorities. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h would clearly demonstrate that the identical similar consignments were allowed to be cleared in case of other part transferee of the same licence and restricted items as mentioned in Appendix 2B. It is inconceivable that import of identical items in respect of identical licence is found authorised while it is imported by another transferee of a part of the same licence and is unauthorised in respect of the first petitioner which is transferee of the remaining part of the same licence. This manifests clear bias, motive and mala fide which cannot be also ruled out. 45. The action of the Collector of Customs is not only contrary to the law as prevalent at the material time but it is arbitrary inasmuch as it has not been disputed that similar goods had been imported earlier and were released by the Customs authorities. Several Bills of Entry have been relied on by the petitioner. The importation in respect of those Bills of Entry were made before the import of the present consignments. Although the earlier consignments were released, the subject consignments had been seized on the ground of, inter alia, misdeclaration. 46. It is not in dispute that in respect of the same licence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as T.V. Sets for the purpose of finding out whether the import was authorised or not. When the Policy permits import of all components of T.V. Sets, some against licences and some under Open General Licence, the Collector has no jurisdiction or authority to object to the clearance of the O.G.L. items on the ground that those items if clubbed together with other items imported against licences would constitute complete T.V. Sets under S.K.D. condition. In this case, there was an added difficulty on the part of the respondents as indicated earlier because two different entities have imported different types of items and unless anything contrary is shown by cogent evidence, the apparent must be taken to be real. 51. Another fact has to be mentioned. The definition of consumer goods for the purpose of Import Policy can only mean consumer goods which can directly satisfy human needs without further processing. Components imported by the concerned petitioners would not directly satisfy human needs. Further processing would be required before a complete T.V. set can come into existence. It cannot, therefore, be held that the components imported are consumer goods within the meaning of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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