COLLECTOR OF CUSTOMS Vs. MEHTA PAINT WORKS

JUDGEMENT

(1.) THE Collector of Customs, Madras, who was the first respondent in the writ petition, is the appellant in the writ appeal. The first respondent herein, Mehta paint Works, filed W. P. 1706 of 1967 impleading the Collector of Customs, and the Port Trust, Madras, for the issue of a Writ of Mandamus directing the collector of Customs, to issue a detention certificate in favour of the first respondent herein and permitting the first respondent to clear the consignment without paying the demurrage charges. The learned Judge allowed the writ petition and directed the issue of a rule in the nature of mandamus directing the Collector of Customs to issue a detention certificate for the period from 101- 1967 to 12-4-1967. The learned Judge further directed that the first respondent herein, on the basis of the said certificate, would be entitled to the necessary adjustments in the matter of payment of demurrage charges to the port trust on the goods in question, Against this order, the Collector of Customs has preferred this writ appeal.

(2.) THE first respondent-firm was issued a licence for the import of pigment dyestuff. A consignment of 2999 paper bags of powdered whiting of the C. I. F. value of Rs. 25371-24 was imported against the said licence. A bill of entry was filed by the first respondent herein on 3-1-1967, for clearing the consignment. After certain returns. the first respondent properly presented the Bill of Entry on 11-1-1967. When the goods were examined by the Customs authorities on 111-1967, the first respondent made an endorsement on the bill of entry to the effect that the import licence duly covered the import of powdered whiting. The first respondent also stated that two consignments of similar nature were cleared by it. The ship completed the discharge of all its cargo on 16-1-1967. After checking the goods on 19-1-1967, the customs authorities issued a show cause notice on 20-1-1967 to the first respondent calling upon it to explain why the goods should not be confiscated on the ground that the import licence produced was for pigment dyestuffs and the import of powdered whiting under the said licence was not permitted. On 24-1-1967, the first respondent complained that it was not allowed to clear the goods. On 25-1-1967, the first respondent received the show cause notice and gave a reply on 28-1-1967, reiterating the plea that the article imported was permissible under the import licence. The customs authorities were not satisfied with the explanation and referred the matter for the opinion of the Chemical Examiner on 7-2-1967. The report was received on 14-2-1967. As there was some delay, the first respondent issued a reminder. After a joint meeting of the Chief Controller and collector of Customs on 10-3-1967, a notice for adjudication was put up on 153-1967. On 25-3-1967, the first respondent received a letter fixing the date of personal hearing on 1-4-67. On 1-4-1967, the first respondent attended the personal hearing and on 6-4-1967, an order of adjudication was passed. On 124-1967, the goods were directed to be released and were in fact cleared on that day itself. The order of adjudication was to the following effect: "powdered whiting is banned item for actual users as per April, March policy 1966-67 Red Book and to import this item a specific endorsement is necessary in the licence. Since the licence produced does not bear specific endorsement, it is not valid for the goods under reference. As such the importation is unauthorised and against Import trade Control Regulations. 2. However, having regard to the circumstances of the case, the goods in question have been allowed clearance as a special case.

(3.) THERE has been breach of law, but in view of the extenuating circumstances no penal action is being taken on the present occasion, but this leniency may not be repeated". When the goods were cleared on 12-4-1967, the Port Trust authorities called upon the first respondent to pay demurrage charges for the detention of the goods from 10-1-67 to 12-4-67. The main contention on behalf of the first respondent consignee was that detention of the goods between 10-1-67 to 124-67, was due to the customs authorities and that they are bound to issue a certificate, which would enable the first respondent to obtain the clearance of the goods at a concessional rate. 3. Section 45 (1) of the Customs Act, 1962 provides that all imported goods unloaded in a customs area shall remain in the custody of such person as may by approved by the Collector of Customs until they are cleared for home consumption. The customs authorities also are enjoined not to permit such goods to be removed from the customs area or otherwise dealt with, except under and in accordance with the permission in writing of the proper officer. Section 46 (1) requires that the importer shall present a bill of entry to the proper officer. Section 17 (3) of the Act enables the proper officer to require the importer to produce such documents as are necessary for the due compliance of the import control order and to assess the duty payable thereon. Sec. 17 (1)requires that the examination and testing by the proper officer will be conducted without undue delay. Under Section 47, where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty that has been assessed thereon, the proper officer may make an order permitting clearance of the goods for home consumption.