IN Writ Petition Civil Nos 348 352 of 1985
Under Article 32 of the Constitution of India
Kapil Sibbal Additional Solicitor General Madan Lokur Ms Shobha Dikshit Gopal Subramaniam and Ms A Subhashini NP for the appearing parties
Pramod Swarup for the Intervener and RK Mehta NP for the State of Orissa
The Judgment of the Court was delivered by RANGANATH MISRA J
This is an interlocutory application at the instant of the respondents in the writ petitions where the following directions of this Court have been asked for i grant time to State of Uttar Pradesh for implementing judgment and order dated 25th September 1987 and commence the session for post graduate education from 2nd May 1990 in all the seven medical colleges ii further permit the State of Uttar Pradesh to hold the competitive examination for admitting the post graduate students for the year 1990 through the University of Luc know and iii pass such other and further orders as it may deem fit and proper in the interest of justice
138 The main judgment of this Court was delivered on 22nd June 1984 in Dr Pradeep Jain etc
vs Union of India  Ors
  By a subsequent order made on 21st July 1986 this Court directed that the total number of seats for admission to post graduate courses in each medical college or institution on the basis of All India Entrance Examination shall be limited to 25 and such examination would be held by the All India Institute of Medical Sciences at New Delhi
By order dated September 25 1987 this Court made clear directions for the sake of bringing about uniformity in post graduate medical teaching by requiring post graduate courses to be structured on a uniform basis directing that diploma prevailing in Tamil Nadu may not be available for admission to a post graduate degree course and ordering that provision in regard to super specialities like MD and other higher degrees need not be court controlled
For doing so this Court allowed a five year period upto 1992 inclu sive
With a view to bringing all the medical colleges and institutions subject to the scheme to one common discipline and for admissions beginning from 1993 the Court indicated that there should be only one pattern namely the three year degree course without any housemanship
After having done so the Court proceeded to fix uniform schedule for inviting applications for having the selection examination declaration of the result admission of students to the post graduate courses and commencement of the sessional teaching
The Court then desired that the discipline regarding holding of the selection examination admission and commencement of courses should be effective from 1988
In the penultimate paragraph of that order
it was said All necessary directions for post graduate course are now complete
We direct the Union of India the Medical Council of India the State Governments Universities Medical Institutions and all other authorities that may be involved in implementation of the scheme to give full effect to the orders and directions made by this Court in the proper spirit so that the scheme may become operative as directed
We make it clear that no application for any modification of matters already covered by our order henceforth shall ordi narily be entertained
A copy of this order shall be communicated forth with to the Chief Secretary of every State and Union Terri tory for compliance
A copy of it be also sent to the Direc tor 139 Generals All India  Radio and Doordarshan for appropriate publicity of the order in general interest
 We have ascertained from the Registry that there was due compliance of the direction contained in the last paragraph of the order
A matter from Bihar forming subject of Civil Appeal No 3589 of 1989 relating to admission in post graduate medical courses came before this Court
This Civil Appeal was dis posed of by this Court on 151189 AIR 1990 SC 749
Deal ing with the lapses on the part of the State of Bihar in the matter of compliance with the directions of 1987 which we have already referred to this Court said Obviously the relevant directions have not been followed by the examining body for the current year
Similarly the State of Bihar did not follow the directions of this Court while drawing up its prospectus
If the courses of study are to commence from May 2 the last qualifying date could not have been fixed as May 31 1989
It has been reiterated before us that several States have not been followingthe directions
Instead of issuing notice to the States and Union Territories for examining the correctness of the allegations of delay and non compliance of the directions we have thought it appropriate to indicate that every one including the States Union Territories and other authori ties running Medical Colleges with Post Graduate Courses are bound by our order and must strictly follow the time sched ule indicated in paragraph 6 of the order
We have not proceeded against the defaulting authorities for violation of this Court s order hoping that there would be no recur rence of it but we would like to administer a warning to everyone that if it is brought to our notice at any time in future that there has been violation a serious view of such default shall be taken
We hope and trust that everyone concerned shall comply with the time frame strictly and there would be no lapse in this regard in future
 This application is grounded upon the default which this Court has been anxious to eliminate and apprehensive of non compliance of directions wherein a serious threat of punishment had been held out
Both the State of Uttar Pra desh and the seven medical colleges run by it are bound to implement the scheme in the main judgment as modified from time to time and were covered by the orders of 1987 and 140 1989
We have read our order of 1987 again and find no scope for the stand of the respondents in the present petition for the position that there was scope for confusion relating to the directions in regard to uniform pattern of the courses and the time scheduled for the various aspects concerned with the selection examination admission of students into the Post Graduate and commencement of sessional teaching
These were two different matters and while in regard to items referred to in the order of 1987 a clear five year period was allowed to evolve the system of uniformity time frame for every purpose like admission and teaching was intended to be brought into force from the year 1988
Two distinct sets of directions were made one in regard to the requirement of change of the regulations and rules and the procedural aspects in operating the scheme and the other for regulating admission and commencement of teaching
We reject the plea of the Uttar Pradesh Government and the other respondents that there was scope for confusion and non compliance with the directions was relatable to a bona fide mistake
This is a clear instance of either wilful default or total callous indifference to binding and lawful orders made by this Court
Where the direction is clear and arising out of default of compliance a further direction is made clarifying the position and warning defaulting parties of serious consequences we find no scope for any justifica tion for continued default
More so when the State Govern ment and its officers obliged to give effect to our direc tions fail to take notice of the same and exhibit a conduct of noncooperation and callousness
It was the obligation of the State of Uttar Pradesh in terms of the two orders referred to above to initiate action for admission in appropriate time so as to allow the com mencement of the course for the year 1990 with effect from May 2 1990
It is the respondents  stand that for the year 1990 the Entrance Examination for the remaining seats besides 25 controlled by the AllMS was to be conducted by the University of Lucknow on 27th May 1990
This itself was contrary to the scheme and exhibited the same pattern of conduct as appeared in the Bihar case referred to above
In fact on looking at the matter from every possible angle we have not been able to appreciate the submissions of Mrs Dixit and are of the view that the performance of the State of UP and its public authorities is anything short of contumacy
At one stage we were thinking of initiating contempt action against the State and the Principals of the seven medical colleges
Such steps for disciplining the State and the public authorities concerned would result in multiplicity of proceedings therefore instead of undertak ing such an exercise we have thought it appropriate to impose 141 exemplary costs against the State of Uttar Pradesh as also the principal of each of the seven medical colleges
We direct that the State of UP shall pay costs of Rs20000 twenty thousand while each of the Principals shall pay Rs500 five hundred by way of costs
So far as the State of Uttar Pradesh is concerned it has of course to come from the public fund of the State
In regard to the principals of each of the seven medical colleges located at Lucknow Agra Kanpur Jhansi Meerut Gorkhpur and Allahabad the amount of costs shall be recovered personally from their salary and they would not be entitled to reimbursement of the same from the State exchequer
These payments be made with the Regis try of this Court by 30th of September 1990
A copy of this order shall be made available to each of the principals of the seven medical colleges for compliance
The State of UP is directed to hold the Selection Examination stipulated by it for May 27 1990 by 30th of September 1990 and the University of Lucknow is authorised to conduct it
The result of the examination should be published within one week that is by 8th of October 1990 and admissions should be completed on or before 26th of October 1990 and classes shall commence on 1st of Novem ber 1990
The classes shall be deemed to have commenced from 2nd May 1990 and each of the medical colleges shall undertake to provide additional teaching in course of the session so as to compensate the students for the days lost on the basis that the course begun on 2nd May 1990
Each of the principals of the medical colleges shall certify to the Registry of this Court by 15th November 1990 that this part of order has been implemented
Before we part with the case we would like to again administer a warning to everyone associated with the scheme for implementing the directions contained in the main judg ment and the subsequent orders that a future default by anyone in any part of the country shall indeed be seriously viewed and drastically dealt with
This Court has stated in the past and we would like now to reiterate that the direc tions of this Court are not intended to be brushed aside and overlooked or ignored
Meticulous compliance is the only way to respond to directions of this Court
PSS Application disposed of


Summary:
Section 141 of the provides that where a duty of customs is chargeable on any goods by refer ence to their value the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold or offered for sale
for delivery at the time and place of importation
in the course of international trade
The appellant company a small scale manufacturer of plain paper copiers
had submitted
alongwith their applica tion for approval of the phased manufacturing programme the quotations received by them from their foreign collaborators based in Hongkong in respect of the various components and obtained a licenee in this regard for Rs494500
Subse quently they imported three consignments of components and consumables in SKDCKD form from suppliers at Hongkong and another consignment from Singapore
The total value declared under the four bills of entry was Rs99612
The Collector of Customs found that the invoices submit ted by the company were undervalued and determined the price of goods at Rs715485 with reference to the quotations for the purposes of section 141 of the Act
He thus held that there was a misdeclaration of value to the tune of Rs615873 that the duty payable thereon would be Rs109622820 and that the entire goods were liable to confiscation under section 111m of the Act
He also held that the goods imported were fully finished copiers in SKDCKI form and as such there was a misdeclaration that the import ed goods were only parts of the copiers that description of most of the items in the invoices had been deliberately manipulated to suit the description in the licence that fully assembled copiers were not permissible to be imported and this was a clear violation of the Act and the terms of the licence
In the alternative he held that even if all the parts contained in SKDCKD packs were 29 viewed individually none of the items was covered by the licence
He further held that the value of the parts import ed for the purposes of section 141 of the Act would be Rs563332 whereas the importers were permitted to import goods worth Rs494500 that there was thus an excess of Rs68832 and as such the goods were liable to confiscation under section 111d of the Act
Consequently he directed con fiscation of the entire goods with an option to the company to pay Rs3 lakhs in lieu thereof and also Rs2 lakhs in personal penalties
The Customs Excise and Gold Control Appellate Tribunal dismissed their appeals
In these appeals under section 130e of the Act it was contended for the appellants that the quotations had indi cated prices at Hongkong and not the place of importation that at the time of submitting the application for grant of licence the prices were quoted for fixing the upper limit of the value of the licence that when the actual purchase transactions were entered into the company negotiated for the price and having regard to the quantum of purchase and the prospects of future sales the company was given 25 per cent discount by the suppliers and that in the absence of any other material on record the invoice price alone could form the basis of valuation of the imported goods
For the respondents it was contended that the prices quoted by the collaborators were based on the prices given by the manufac turers
and there was no question of supplying the compo nents on a lesser price than given by the manufacturers themselves that the goods imported were not components of plain paper copiers as declared that the cartons in fact comprised of all the parts required for full and complete assembly of 14 copiers that the company in importing them in the guise of separate components and accessories had not only violated the terms and conditions of the licence but also committed a complete fraud that in the circumstances the adjudicating authority was fully justified in placing reliance on the prices mentioned in the quotations
Dismissing the appeals under section 130e of the Act the Court HELD 11 According to section 141 of the for purposes of assessment the value of the imported goods is to be deemed to be the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation in the course of interna tional trade where the seller and the buyer have no inter est in the business of each other and the price is the sole consideration for the sale or offer for sale
36G H 12 In the instant case the appellant company itself had produced 30 a copy of the quotations received by them from their collab orators at Hongkong in respect of the copiers and other items imported alongwith their application for approval of their phased manufacturing programme
They therefore
could not dispute the correctness of the prices mentioned in the said quotations
Not only that they have also failed to produce any other material on record to show that the value mentioned in the invoices was the correct market value of the goods imported at the relevant time
The adjudicating authority in these circumstances was perfectly justified in taking the prices mentioned in the quotations as a basis for determining the correct value of the imported goods
37A C 21 The goods covered by the three bills of entry dated 3rd February 1987 had been shipped from Hongkong on the same day ie on 21st January 1987
The entire goods had arrived on the same day and by the same flight on 30th January 1987
These goods had been supplied by the same supplier
They comprised of ten numbers copiers in SKDCKD condition accessories spares consumables and excess items
The goods covered by the 4th bill of entry were four numbers copiers in SKDCKD condition and consumables
If assembled together these would constitute full and complete copiers
The licenee produced was valid for certain compo nents and was not valid for fully assembled copiers
The appellant company was thus doing indirectly what they were not permitted to do directly under the licence
37H 38A B Girdbari Lal Bansi Dhar vs Union of India  referred to
Union of India vs Tarachand Gupta  Bros  distinguished
22 The intention and purpose of the import policy was to give incentive and encouragement to the new entrepreneurs establishing small scale industries and in the first phase to import 62 of the components of the copiers and the balance of 38 was to be manufactured by them indigenously
This percentage of 62 was to be reduced in the subsequent years
The import policy was not meant for such entrepre neurs who instead of importing 62 of the components im ported 100 of the components of a fully finished and com plete goods manufactured by a foreign country
Fully fin ished plain paper copiers were the end product of the im porters and hence could not be imported by them
The device a looted by the company in the instant case was thus a complete fraud on the import policy itself
37D F 31 23 The order confiscating the goods and imposing fine was therefore rightly made