Appeal No 2003 of 1966
Appeal from the judgment and order dated December 18 1964 of the Calcutta High Court in Appeal No 254 of 1963
Ram Janiavani and section P Nayar for the appellants
The respondent did not a pear
The Judgment of the Court was delivered by Shah J
On March 31 1959 the Ministry of Commerce and Industry Government of India granted to the respondents a licence permitting them to import from West Germany certain machinery described therein of the maximum CIF value of Rs 45000 
Condition No 1 of the licence provided that The 
application is accepted and import licence is hereby granted having quantity and value as the limiting factors and is not valid for clearance if the actual value of any item exceeds the CIF value indicated in the licence by more than 5
 The respondents submitted a bill of entry dated July 1 1960 disclosing the CIF value of the consignment as Rs 45179 92 inclusive of landing charges and cleared the consignment after paying duty assessed by the Customs authorities on the real value of the goods as disclosed in the bill of entry
On June 20 1961 the Customs authorities issued a notice requiring the respondents to show cause why penal action should not be taken against them under section 1678 of the  as being persons concerned in the unauthorised importation of the goods
This notice was amended by notice dated September 21 1961 whereby the respondents were charged with having committed offences under section 1678 read with section 32 of the Imports and Exports Control Act 1947 for 683 illegally importing the machinery
The respondents claimed that no breach of the conditions of the licence was committed
The Additional Collector of Customs Calcutta by order dated March 17 1962 directed confiscation of the machinery under section 1678 of the read with section 3 2 of the Imports and Exports Control Act 1947 and permitted the respondents to pay a fine of Rs 20000 in lieu of confiscation
A personal penalty of Rs 25000 was also imposed on the respondents
The respondents then moved a petition before the High Court of Calcutta under article 226 of the Constitution praying for a writ quashing the adjudication order dated March 17 1962
A Single Judge of the Calcutta High Court dismissed the petition but in appeal under the Letters Patent the High Court reversed the decision and issued a Writ of certiorari quashing the order dated March 17 1962
The Additional Collector of Customs Calcutta has appealed to this Court with certificate granted by the High Court
The only question which falls to be determined is whether for breach of a condition of the licence penalty may be imposed under section 5 of the Imports and Exports Control Act 1947 read with the 
The relevant statutory provisions may first be noticed
Under section 167 of the  the offences mentioned in the first column of the Schedule are punishable to the extent mentioned in the third column of the same with reference to such offences respectively Section of this Act to which offence Offences
has reference
Penalties 8
If any goods the importation or 18  19 such goods shall be liable to be exportation of which is for the confiscated  and any person con time being prohibited or resting herded in any such offence shall acted by or under Chapter IV of be liable to a penalty not exceed this Act be imported into or axing three times the value of the ported from India contrary to goods or not exceeding one such prohibition or restriction or thousand rupees Chapter IV of the  contains three sec tions  sections 1 8 19  19A
By section 18 an absolute prohibition is unposed in respect of importation of goods by land or by sea specified therein
Section 19 provides that the Central Government may from time to time by notification in the Official Gazette prohibit or restrict the bringing or taking by  sea or by 684 land goods of any specified description into or our of India across any customs frontier as defined by the Central Government
The Central Legislature enacted the Imports and Exports Control Act 1947 with the object of authorising prohibition and control on imports and exports
By section 3 of that Act it was provided
1 The Central Government may by order pub lished in the Official Gazette make provisions for prohibiting restricting or otherwise controlling in all cases or in specified classes of cases and subject to such exceptions if any as may be made by or under the order a the import export carriage coastwise or shipment as ships stores of goods of any specified description b the bringing into any port or place in India or goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which they are being carried
2 All goods to which any order under sub section 1 applies shall be deemed to be goods of which the import or export has been prohibited under section 19 of the  and all the provisions of that Act shall have effect accordingly except that section 183 thereof shall have effect as if for the word shall therein the word may were substituted
3 Section 5 of the Imports and Exports Control Act 1947 as originally enacted provided  If any person contravenes any order made or deemed to have been made under this Act he shall without prejudice to any confiscation or penalty to which he may be liable under the provisions of the  as applied by sub section 2 of section 3 be punishable with imprisonment for a term which may extend to one year or with fine or with both 6 85 In exercise of the power conferred by sections 3 and 4 A of the Imports and Exports Control Act 1947 the Central Govern ment issued the Imports Control Order 1955
Clause 3 of the Imports Control Order prevented importation of any goods of the description specified in Sch
I except under and in accordance with a licence or a customs clearance permit granted by the Central Government or by any officer specified in Sch
By sub cl
2 of cl 3 it was provided that if in any case it was found that the goods imported under a licence did not conform to the description given in the licence or were shipped prior to the date of issue of the licence under which they were claimed to have been imported then without prejudice to any action that may be taken against the licensee under the  in respect of the said importation the licence may be treated as having been utilised for importing the said goods
By cl 5 certain conditions could be imposed by the Licensing Authority issuing a licence
It may be recalled that one of the conditions of the licence issued by the respondent was that the value of any item shall not exceed the CIF value indicated in the licence by more than 5 
It was the case of the Customs I authorities that the real value of the machinery imported exceeded the declared value and on that account the respondents had infringed the conditions of the licence
In East India Commercial Company Ltd Calcutta  Anr
vs The Collector of Customs Calcutta this Court held that section 167 cl 8 of the  read with section 32 of the Imports and Exports Control Act 1947 authorised the imposition of penalty if goods were imported in con travention of any order under the Imports and Exports Control Act 1947  but the section did not expressly or by implication authorise confiscation of goods imported under a valid licence on the ground that a condition of the licence not imposed by the order was  infringed
This view was reiterated by this Court in Boothalinga Agencies vs T C Poriaswami Nadar 2
These cases were decided on the interpretation of section 5 of the Imports and Exports Control Act 1947 as it stood before it was amended by Act 4 of 1960
By the Imports and Exports Control Amendment Act 4 of 1960 in section 5 after the words any order made or deemed to have been made under this Act the words or any condition of a licence granted under any such order were inserted
Contravention of any condition of a licence granted under any order was therefore liable to be punished under section 5 as amended
1 L196313SCR338
2 19591 1 SCR 65 686 In the present case the Customs authorities did not direct section for contravention of any condition of a licence directed confiscation of the machinery and imposed penalty lieu thereof
But on the terms of section 5 as amended the right impose penalty for contravention of any condition of a may be exercised under the  and under the Imports and Exports Control Act 1947
For are of any condition of a licence it is open to the authorities direct prosecution but no order confiscating goods and ring penalty in lieu thereof could be made
The order of fiscal could only be made under section 167 cl 8 of the Sea atoms Act 1878  in terms cl 8 of section 167 provides for action of the goods importation or exportation of which is the time being prohibited or restricted by or under Ch
IV the 
The notification of which contravention is said to have began made is not issued under 19 of the  but under the Imports and Control Act 1947
It has not been urged before us a rightly that penalty of confiscation is incurred under the pro sons of the  for breach of the con lions of the licence
In our judgment the High Court was right in holding the scope of power under the was not enlarged by the amendment to section 5 of the Imports and Exports Control Act and there is nothing in the amended section 5 of the Imports and Exports Control Act which warrants the view that provisions of the  may be invoked punish the breach of a condition of a licence granted under Imports and Exports Control Act 1947
The appeal fails and is dismissed
There will be no order as to costs


Summary:
Under section 3 of Imports  Exports Control Act 18 of 1947 all goods to which any order under sub section
1 applied shall be deemed to be goods of which the Import  Export has been prohibited under section 19 of the Sea
Customs Act 8 of 1878 and all the provisions ofthat Act shall have effect accordingly
In exercise of power conferred by sections 3 and 4A of the Act 18 of 1947 the Central Government issued the Imports control Order 1955
Clause 3 of the Order prevented the importation of any goods of the description specified in Schedule except under and in accordance with a licence or a customs clearance permit granted by the Central Government or by any officer specified in Sch
Section 5 of Act 18 of 1947 as originally enacted provided  If any person contravenes any order made or deemed to have been made under the Act he shall without any prejudice to any confiscation or penalty to which he may be liable under the provisions of the  as applied by sub section
2 of section 3 be punishable with imprisonment for a term which may extend to one year or with fine or with both
 By the Imports  Exports Control Amendment Act 4 of 1960 contravention of any conditions of a licence ranted in accordance with The terms of any order passed under the Act was also made punishable under section 5
The respondents imported certain goods from West Germany under licence granted by the Ministry of Commerce
According to the Government the goods imported were in excess of the terms of the licence and accordingly the respondents were charged with having committed  offences under section 1678 read with section 32 of Act 18 of 1947 and the a good s imported by them were confiscated
In lieu of the confiscation however a fine of Rs 20000 was imposed an the respondents
A personal penalty of Rs 25000 was also imposed
The respondents filed  a writ petition in the High Court which was dismissed by the Single Judge but allowed by the Division Bench
With certificate the Collector of Customs appealed
The only question for consideration was whether for breach of a condition of the licence penalty may be imposed under section 5 of Act 18 of 1947 read with section 1678 of Act 8 of 1878
HELD The appeal must be dismissed
For breach of any condition of a licence it is open to the authorities
under section 5 of Act 18 of 1947 as amended to direct prosecution but no 682 order confiscating goods and imposing penalty in lieu thereof could be made
The order of confiscation could only be made under section 167 cl 8 of Act 8 of 1878  in terms cl 8 of section 167 provides for confiscation of the goods importation or exportation of which is for the time being prohibited or restricted by or under Ch
IV of the 
The notification of which the contravention was alleged was not issued under section 19 of the but under the Imports  Exports Control Act 1947
The High Court was therefore right in holding that the scope of power under the was not enlarged by the amendment to section 5 of the Imports  Exports Control Act
There is nothing in the amended section 5 of the imports  Exports Control Act which warrants the view that the provisions of the  may be invoked to punish the breach of a condition of a licence granted under the Imports  Export  Control Act 1947
686 B C