HINDUSTAN TRADING COMPANY Vs. COLLECTOR OF CUSTOMS MADRAS

JUDGEMENT

(1.) THIS is a petition under Art. 226 of the Constitution praying for the issue of a writ of certiorari to quash the older of the Collector of Customs made in connection with certain imports. The petitioner company had two import licences for the value of Rs. 500/- and Rs 660/- respectively for the import of watch movements or parts of watches. According to the petitioner, the foreign manufacturers, circularised the Indian dealers, the petitioner among them, to say that they had on their hands a stock of parts of watches of Indian models which had become dead stock as there was a ban on the import of watches as a whole. Since these parts were of those specially manufactured for Indian conditions and could not be sold in other markets, the manufacturers were prepared to reduce the prices for these job lots and requested the petitioner to utilise its import licences for importing these spare parts. In pursuance of this understanding, the petitioner claimed that it placed an order for the import of parts of watches upto the value of the licences. When the goods arrived by post-parcel in November, 1959, the Assistant Collector of Customs, Postal Appraising Department, purported to value the goods at Rs 1470/- as against the invoice value of Rs. 1165/-. He claimed that the excess was not covered by the licences produced, and that the goods were under-valued, such under-valuation being an offence under the provisions of the Import Trade Control Order, read with the provisions of the Sea Customs Act, 1878. A notice was issued by the Assistant Collector of Customs to the petitioner. The petitioner pointed out that the value stated in the invoice was the correct value and produced the circular letter from its manufacturers to establish the reasons for the lowering of the price by the manufacturers. It was also pointed out that the Bombay Customs accepted the position, but the Assistant Collector of Customs, Madras declined to give any credit to the explanation and by the order dated 20th April, 1960, he confiscated the goods under Section 167(8) as having been imported without a valid licence and gave the option under Section 183 of the Sea Customs Act, 1878 to clear the goods for home consumption on payment of fine of Rs. 950/-. The petitioner paid the penalty under protest and obtained release of the goods and thereafter an appeal was filed to the Collector of Customs, who, however rejected the contentions of the petitioner and dismissed the appeal. The petitioner claims that the relevant documents produced before the Customs Authorities fully establish that the real value of the goods was within the limits of the licences and that the respondent Collector of Customs erred in taking into consideration factors which were wholly irrelevant to the determination of the value. It is also claimed that the authorities purported to rely upon evidentiary material of which the petitioner was given no notice whatsoever and had no opportunity of meeting that evidence.

(2.) IN the counter-affidavit of the respondent, it is stated, that the import contravened the provisions of the Import Trade Control Order inasmuch as the appraised value of the goods was found to be much higher than the invoice value and the value importable under the licence. It is pointed out that the circular issued by the manufacturers was incomplete in details inasmuch as the price stated therein did not specify the quantities for which these prices were fixed. It was claimed that the Collector is the authority under the relevant provisions of the Sea Customs Act, 1878 to ascertain the real value in such circumstances as those that obtain in the present case and that the procedure adopted cannot therefore be attacked. While it is conceded that the basis of the price of Rs. 21/- adopted by the Collector with reference to the imports of closely comparable watch movements of the like kind and quality was not brought to the notice of the petitioner, it is contended that the petitioner could have asked for details of the evidence upon which the real price of the goods was determined. It is pointed out that even in the appeal, the petitioner did not ask for information upon this point. For these reasons, it is claimed that the petitioner is not entitled to challenge the order of the Collector of Customs.

(3.) IN the appeal, the Collector of Customs, apparently concurred in the view taken by the Assistant Collector. He stated: