HINDUSTAN MOTORS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) This is an appeal from a judgment and order of Mr. Justice Bose, dated January 28, 1952, by which the learned Judge declined to issue any writ of mandamus or certiorari with respect to certain Demand Notices issued to the appellant under the provisions of the Sea Customs Act, or to direct the respondents to forbear from giving effect to the said notices or from taking any ac- tion against the appellant under the last clause of section 39 of the Act as threatened. The learned Judge had himself issued a Rule in the first instance on the respondents, the Union of India and the Assistant Collector of Customs, Calcutta, but ultimately he discharged the Rule on six different grounds,

(2.) In view of the very limited character of the argument addressed to us on behalf of the appellant, it will be sufficient to state the facts only in outline. Between January 20 and September 29, 1949 the appellant placed various orders in the United States of America for importing therefrom motor spare parts, service appliances and tools, parts of completely knocked down cars and trucks, as also some fully assembled trucks. The price of the goods was to be paid in dollars to a certain Bank in the United States against delivery of the relative documents to that Bank. In order that the price might be so paid, the appellant opened various letters of credit with the United Commercial Bank in Calcutta and, thereafter entered into three several forward exchange contracts with the Bank on three several dates in June, 1949 for the purchase of the required dollars. Necessarily, the rate of exchange adopted for the contracts was that prevailing on the respective dates of the contracts, which was a rate in accordance with the then current value of the rupee. Between July 4 and October 25, 1949, the Bills of Lading and other shipping documents relative to the goods arrived at the United Commercial Bank and the appellant took delivery of them on payment in terras of the forward exchange contracts. Between October 10 and November 16, 1949, the appellant filed with the Customs authorities the bills of entry in respect of the goods in accordance with section 29 of the Sea Customs Act and the Customs authorities, after the necessary scrutiny levied duty of an amount of Rs. 6,96.951-3-0. In doing so and in computing the "real value" of the goods for the purposes of section 29 and section 30 (b) of the Act, they proceeded on rates of exchange adopted in the forward exchange contracts of prior dates, in accordance with certain departmental instructions in force at the time. Between October and November 1949, the amount of duty levied on the appellant was either paid or debited to its account with the Customs authorities.

(3.) In the meantime, the rupee had been devalued with effect from September 17, 1949. Under the strict words of sections 29 and 30 of the Sea Customs Act, the real value of any imported goods is the value at the time of the importation and that time is taken to be the time when the bill of entry or the shipping bill is lodged with the Customs authorities. In November, 1949, it came to the knowledge of the Central Board of Revenue that in cases of forward exchange contracts, the Customs authorities in Calcutta were still accepting the exchange rate prevailing before the devaluation of the rupee, where the contracts had been entered into before the devaluation and the Board thought that the Calcutta Officials were presumably following the old departmental instructions. It was considered by the Board that those instructions were perhaps not legal, being in contravention of the statute and they decided that, in any event, those instructions should no longer be followed and that even in the case of forward exchange contracts, the assessment should be made on the basis of the rate of exchange ruling on the day when the bill of entry was presented. That decision was communicated to the Collector of Customs, Calcutta, by a letter dated November 11, 1949. In the case of the goods with which the present proceedings are concerned, the appellant had filed the bills of entry after the devaluation. Accordingly, by notices issued between November 26 and December 23, 1949, the Customs authorities demanded of the appellant a further payment of Rs. 4,96,103-14-0. It is those notices which the appellant impugns. The reason why several notices were issued is that the original assessments had been made severally in respect of the several consignments or classes of goods and the extra duty was charged by reference to those several assessments. Some mistakes were, however, made and the additional amount charged comprised certain demands, made twice. It is not disputed that if the duplicate demands are excluded, the computation of the balance is in accordance with the exchange value of devalued rupee as prevailing on the dates on which the bills of entry were lodged.