TMI Blog1991 (3) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... consignments, one containing spare parts for combination square sets, vernier height guages, micrometers etc. and the other containing spares of measuring instruments of diverse amounts from the same foreign suppliers viz. Messrs. Mitutoyo Manufacturing Co. Ltd., Japan by virtue of the aforesaid subsidiary licence. Both the consignments were shipped from Yokohama per "JANIKA" Rotation No. 502/87, Line Nos. 100 and 103 and the same arrived at the Port of Calcutta on or about 15th September, 1987. 4. Thereafter Bills of Entry were presented for assessment of Customs duty by the Clearing Agents for clearance of the subject goods against the aforesaid licence. The Customs authorities however, refused to clear the goods on the plea that the Shed Appraiser was directed to open the cases of the two consignments covered by the two Bills of Entry for appraisement and to examine them side by side and ascertain if the goods imported under these two Bills of Entry make for complete micrometers/combination square sets/vernier height gauges. The said Appraiser allegedly opened the case for appraisement and after an examination of the two consignments came to the purported conclusion that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring instrument including the specially designed instrument boxes for keeping the said precision instrument and instruction manual in the said two consignments. The importers placed the order and L/C (at sight) on the same date and the goods were supplied by the foreign supplier by the same vessel under two line numbers. The date of the invoice and B/L are also same. It appears that the importer has imported the goods making two consignments only to hoodwink the Customs authority and to prove the goods as spares only to evade the govt. duty and licensing provision. The duty rate of the complete measuring instrument is 40% + 40% + 15% C.V. whereas the importer filed the bill of entry claiming the goods as parts of measuring instruments and tried to release the goods paying duty at the rate of 45% 4- 40% + C.V. Nil only. In this case the attempted duty evasion is Rupees 45,234.00. The importer could not produce any price list for the parts of imported MITUTOYO measuring instrument, on the other hand they have submitted a price list for the complete measuring instrument which shows the price at the lower side. This is probably due to the dismantling charges taken by the manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector of Customs had both the consignments examined together, side by side by the Shed Appraiser to ascertain the contents. On examination the Shed Appraiser reported that the goods imported against the two Bills of Entry when combined together make complete Micrometer, Combination Squares and Vernier Height Gauge. On the basis of the Shed Appraiser's report, the learned Assistant Collector of Customs of D.I.U. held the view that the goods covered by the two Bills of Entry are complete instruments and not spares covered separately by the two Bills of Entry and as such were not covered by the licence issued under Para 265(6) of AM'85-88 Import Export Policy as that licence covers only spares of the instruments and not complete instruments themselves. (iii) We, however, most respectfully submit that it has been the established practice of the Custom Houses both Calcutta and others for the last 8-9 years to allow clearance against Export House Additional licence import of spares in different consignments which when combined together make a complete instrument. In support of this statement, we enclose herewith copies of Bills of Entry and Invoices of spares of instruments allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete measuring instruments. As the subject goods imported by the company were spare parts, correct declaration were made in the Bills of Entry regarding the description and classification of the goods in question, spares of measuring instruments being covered by Tariff Item 9806.00 read with Notification No. 69/87-Cus. and 205/87-Cus. and spares for combination square sets, vernier height gauges and micrometers being classifiable under Tariff Item No. 9806.00 read with Customs Notification No. 69/87-Cus. and 205/87-Cus. attracting the Customs duty at the rate of 45% ad valorem and 40% auxiliary respectively. 10. It is also contended that in the past the Customs authorities have allowed import of spares of measuring instruments imported in the same Vessel or in different Vessels which when combined together would make a complete instrument, on the basis that the same were spares and had levied customs duty at the rate of 40% ad valorem Basic Duty, 40% Auxiliary Duty and 15% C.V.D. which is the Customs duty chargeable in respect of complete instruments. In fact, spares of measuring instruments, combination square sets, vernier height guages, micrometers etc. have always been c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner No. 2 who is a shareholder of the company and carries on business through the agency of the company and in turn on his fundamental rights to carry on trade, business, occupation and/or profession guaranteed by Article 19(1)(g) of the Constitution. 16. In or about August, 1990 another application was made by the petitioner for release of the goods on the ground that such goods have been cleared by Customs Authorities on earlier occasions. No affidavit-in-opposition has been filed in spite of the opportunities given. It has not been disputed before me that the contentions raised by the petitioner are not correct. Records have been produced. From the records it appears that the following order was passed by the Collector on 6th January, 1988. "I have gone through the case records and the submissions made by the party. In the instant case, the goods have been imported in two separate line numbers but when combined together make a complete instrument in SKD condition. This has not been disputed by the party. However, it has been urged that in view of a decision of the Tribunal reported in 1987 (31) E.L.T. 400 (Tri.) = 1987 (12) ECR 1150 (CEGAT NRB), confiscation is not justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of measuring instruments of diverse amounts from the said foreign suppliers M/s. Mitutoyo Manufacturing Company Limited of Japan. 19. Both the consignments imported on the basis of the aforesaid original licence and the subsidiary licence were shipped from Yokohoma, Japan in vessel JANIKA, Rotation No. 502/87, Line Nos. 100 and 103 and arrived at the Port of Calcutta on or about 15th September, 1987. 20. The Customs Authorities, however, refused to clear the goods on the plea that the Shed Appraiser was directed to open the cases of the two consignments covered by the Bills of Entry for appraisement and examine them side by side and to ascertain if the goods imported under those two Bills of Entry make complete micrometers/combination square sets/vernier height gauges. The said Appraiser allegedly opened the cases for appraisement and after a purported examination of the two consignments came to the purported conclusion that the goods included under the two Bills of Entry made complete micrometers/combination square sets/vernier height gauges. 21. In my view, the contention raised by the respondents cannot be accepted. The petitioner company imported spares of measuring ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Annexure "J" to the writ petition. 26. In the very same vessel by which the goods in question have arrived, namely, vessel JANIKA, similar spares of measuring instruments and combination square sets, vernier height gauges, micrometers etc. were carried for delivery to Birla Jute Company Limited which were all cleared by the Customs authorities on the basis that they were spares. The petitioner has made out a specific case in this regard in paragraph 15 of the writ petition. The petitioner has called upon the respondents to produce the relevant documents in this regard before this Court. 27. But no contrary evidence has been produced or shown. Further this Court by order dated 9th February, 1988, directed the respondents to produce the records of similar imports including those referred to in paragraph 15 of the writ petition. The respondent Customs authorities have, however, failed and/or neglected to produce the said records in spite of the specific direction of this Court. 28. The respondent Customs authorities by treating similar imports as imports of spares while adopting a different view in the case of the petitioner (who is placed in similar circumstances as other im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declaration and the allegation in the show cause is totally perverse. That being the position, both the show cause notice and the summons are without jurisdiction. 33. The petitioner having imported the consignment in question under the bona fide and correct belief that the subject goods were spare parts of measuring instruments, (as induced by the Customs authorities) and there being no mala fide motive (even none is alleged) behind the imports (assuming but without admitting the allegations in the show cause notice to be correct), the provisions of Section 111 of the Customs Act do not and cannot have any application inasmuch as mens rea is an essential ingredient for an offence contemplated under Section 111 of the Act. The show cause notice, therefore, does not even prima facie disclose the offence or violation alleged. The show cause notice is, therefore, liable to be quashed. 34. For the reasons aforesaid, the writ petition is allowed; the show cause notice and the proceedings initiated in pursuance thereof are quashed. The respondents are directed to allow clearance of the subject goods upon assessment by the respondents and upon payment of duty on the basis that the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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