TMI Blog1961 (5) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... authorising them to import musical instruments and parts thereof, all sorts. This licence was converted on their application to a licence for the import of electric insulations etc. excluding 38-II face value restricted items. The approximate value of the goods which could be imported was fixed at Rs. 1,000. There was an endorsement by the Assistant Controller relating to this conversion which ran thus : The import of these goods is subject to the restrictions mentioned in Col. 6 Section 2 of January June 1957 Policy . 3.The material part of that column is as follows : Not more than 7 per cent of the face value of quota licence or Rs. 500 whichever is higher can be utilised for the import of adhesive tapes . The relevant item of the Indian Tariff-Code Schedule is item 38 : Electric insulations including presspahn paper which fall under item No. 45 of the First Schedule to the Indian Tariff Act 1934, but excluding ebonite eose, tubes and sheets . In the Index a large number of electric insulations of different varieties are mentioned as covered by this Item 38. They include among others : (1) Adhesive tapes. (2) Black insulating tapes. (3) Cotton Ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd fall in line with Bombay and Calcutta Custom Houses to assess such goods under item 82(5) I.C.T. The goods were accordingly released without face value restrictions under Section 38/II as they were not then considered to be adhesive tapes. Regarding importer's claim that the goods are assessable under Item 73 I.C.T. as per the classification obtained from the Custom House, it is true that the Custom House had given such a clarification, but it does not affect the present case which pertains to the I.C.T. position. In the order-in-appeal ROR No. 329/55, dated 24-2-1956 (copy produced by importers), the then Collector of Customs had set aside the orders of the Assistant Collector of Customs as the importation there had been made in accordance with a long-established practice in the Custom House. In deciding to fall in line with Bombay and Calcutta Custom Houses, it was held that the assessment made by this Custom House of black insulating tapes under them 73 I.C.T. were not an established practice but only a few erroneous assessments. As such, the decision in this appeal does not also affect the issue in the case under adjudication. The goods imported were adhesive tapes and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the variety imported by the petitioners were treated by the authorities as falling under the classification of Black insulating tape while they were classified as adhesive tape by the Customs authorities in Bombay and Calcutta. It was only in December 1957 that the Customs authorities in Madras decided to fall in line with the Bombay and Calcutta Customs authorities and to classify these goods as adhesive tape. The learned Judge refused to accept the first ground for the following reasons : That the goods imported by the petitioner could be described as... 'Black Insulating Tape' did not admit of any doubt. That they are adhesive in quality was not in issue either. The question, therefore, arose, under which head should the goods be classified, adhesive tape or black insulating tapes ? I am unable to find anything either in Entry 38 or in the Index or anywhere else in the Policy Book to rule out the interpretation of the term 'Black Insulating Tapes' to cover only black insulating tapes other than adhesive tapes. The entry Adhesive Tapes , in the Index has no reference to colour. Obviously, it has reference to insulation, because it is one of the sub-heads o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect the proper classification of the goods, nor the question whether a contravention of Section 167(8) has been established. Obviously, in proceedings under Article 226 of the Constitution I am not concerned with the soundness or otherwise of the discretion exercised by the Customs Collector in levying a fine on the petitioner . 10.Mr. Gopalarathanam, learned counsel for the appellants, relied on the admitted practice which prevailed both with the businessmen and with the Customs authorities of considering the kind of goods which were imported by the appellants as not falling within the class of face value restricted goods . He relied on certain correspondence between other merchants and the Customs authorities relating to the same class of goods, with special reference to the importance of correct classification emphasised in the Handbook of Rules and Procedure relating to Import Trade Control (1956). The following three paragraphs deal with this matter : Para 4: Importance of correct classification : It is necessary for the intending importer to ascertain the correct classification of the goods he intends to import (with reference to the S. No. and Part of the I.T.C. Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods arrived when such practice was still in vogue. It is only when the goods were sought to be cleared that there was a change in the practice so far as the Customs authorities were concerned and the appellants found themselves faced with the objection which, if correct, would deprive them of their goods. It may be said that a clarification by the Customs authorities based on a misconception cannot preclude the same authorities from changing their view and adopting the correct view. Logically this cannot be challenged. There can be nothing like a legal estoppel precluding the Customs authorities from ever correcting a mistaken view. But this fact will have a bearing when we discuss later the question from a different aspect. 12.Mr. Gopalarathanam contended that even on the merits the order of the Collector was vitiated by an error apparent on its face. In the Index goods of different description were included in the same Item 38 of Section II. Adhesive Tapes and Black Insulating Tapes were enumerated separately. Mr. Gopalnrathanam contended that these two categories must be exclusive. if there was a category of goods known in the market as Black Insulating Tape , such c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestigation into disputed facts and materials. This was a matter for the Customs authorities to decide and it is obvious that this court cannot on an application under Article 32 of the Constitution, embark on such an investigation . 14.We do not understand that in making these observations their Lordships were laying down a rule of general application that the High Court under Article 226 would not have the power to quash the order of the Collector made on a demonstrable absurd basis that a particular article fell within a particular class. Moreover, as we have already mentioned, the case before the Supreme Court dealt with only the imposition of duty. A passage similar to that which we have extracted above from the Handbook of Rules and Procedure was cited to their Lordships and they said : We do not think that the aforesaid observations which relate to licensing policy have any bearing on the question at issue, namely, whether 'Lyra' brand crayons should be assessed under item 45 (a) as stationery not otherwise specified or item 45(4), as coloured pencils . These observations are not without significance because if the matter related to licensing, the fact tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial tribunal, such discretion must be exercised judicially and not arbitrarily. The Collector must decide in each particular case if there were circumstances which would call for the drastic punishment of confiscation. If there was a case in which discretion should have been exercised in favour of the importer, this was such a case. The appellants had placed the order and the goods had arrived when admittedly the practice prevailing both with the merchants and with the Custom authorities permitted goods of the category which the appellants imported under a licence such as the appellants held. The Collector does not appear to have dealt with the case as if he was vested with judicial discretion because he has not given any reason why the drastic punishment of confiscation should have been imposed on the appellants whereas two other similar merchants who had committed the same offence had been let off with a warning. 16. Therefore on both the grounds, namely, that there was an error apparent on the face of the record, and that the Collector as a quasi-judicial tribunal had not exercised his discretion judicially, the order of the Collector should be quashed. We allow the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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