AHAMMAD SAIT Vs. COLLECTOR OF CUSTOMS COCHIN

JUDGEMENT

(1.) The petitioner is a partner of a firm, which carries on business as exporter of processed and deep freezed food. Stainless steel is an article, which was at this relevant time allowed to be imported only by actual users of important industrial goods as food freezing machinery, deep freezers etc. as per a public notice, Ext. P10 dated 25-7-1966 issued by the Deputy Iron and Steel Controller. Ex. P10 was subsequently clarified by another Public notice, Ex. P1 dated 20-3-1967 issued by the Iron and Steel Controller in the Ministry of Iron and Steel, Govt. of India. Accordingly three licenses were issued to the petitioner by the Import and Export Controller in April and May 1968, for import of stainless steel sheets. All that the petitioner really wanted was only stainless strips; and the goods actually imported under the above three licenses were stainless steel strips. Import duty on stainless steel sheets is 100% of the cost, while the duty on the import of stainless steel strips is only 27 1/2%. The petitioner cleared the goods on payment of cent percent duty, But subsequently he came to realise that he was liable to pay only 27% duty. Accordingly he made an application for refund of the excess duty collected by the Revenue. In the meanwhile the departmental internal audit had also pointed out that the duty collected from the petitioner was excessive, and that the excess should be refunded. Accordingly the excess amount collected from the petitioner was refunded to him. But then it was followed by a notice, Ext. P5 dated 18-9-1969 from the Assistant Collector of Customs, Appraising Department, Cochin stating that the petitioner, by importing stainless steel strips under the licenses issued to him which were in respect of stainless steel sheets contravened (he Government of India I.T.C. Order No. 17/55 dated 7-12-1955 issued under S.3 of the Imports and Exports (Control) Act, 1947, that the goods so imported were liable for confiscation under S.111(d) of the Customs Act, read with S.3(2) of Imports and Exports (Control) Act, 1947, and that the importer was also liable for personal penalty under S.112(a) of the Customs Act. Ext. P5 called upon the petitioner to show cause why the said penalties should not be imposed upon him. The petitioner showed cause against the proposed action. But his explanation was rejected by the first respondent, the Collector of Customs and Central Excise, Cochin, who, by his order Ext. P11 dated 24-3-1970, imposed on the petitioner under S.112(a) of the Customs Act a penalty of Rs. 10,500/-. This writ petition has been filed to quash the said order.

(2.) The only question that arises for determination is whether the licenses issued to the petitioner which was admittedly for import of stainless steel sheets covered the goods which he actually imported, viz. stainless steel strips. There can be no doubt that stainless steel sheets and stainless steel strips are commercially different goods. The rates of duty on the import of these goods are also different. Ordinarily, a licence issued for import of a particular goods cannot cover any other commercially different goods. But it is contended that by virtue of the public notice, Ext. P1 a licence issued for import of stainless steel sheets would cover also plates, strips and circles of stainless steel. Ext. P1 reads:-

(3.) The learned Government Pleader contends that Ex. P1 only extends the concession granted in respect of stainless steel sheets to plates, strips and circles, and that sheets cannot include plates, strips or circles. I am unable to accept this argument. It is for the Central Government to decide whether a licence granted for import of sheets should include or cover plates, strips and circles; and by Ext. P1 the Central Government decided by express words that sheets would include plates, strips and circles. There is nothing out of the ordinary in doing so. On the other hand, it may be strange to say that a person who is granted a licence to import stainless steel sheets cannot import under that licence strips of stainless steel. At any rate, the action taken against the petitioner is penal in character. In deciding the question whether a person has contravened a penal statutory provision, it has to be construed in favour of the alleged offender, if the said provision is capable of two interpretations, one in favour of the offender, and the other against him. On that ground also, it has to be held that the petitioner has not imported goods not covered by the licence issued to him.