Case: Hazarimal K. Shah Vs. Collector of Customs, Madras

J. M. Shelat, J. 1. This appeal, founded on a certificate, is by the legal representatives of one Hazarimal Shah, since deceased, who, prior to, his death, was carrying on business inter alia in electric goods in the name and style of J. Hazarimal and Co. The appeal is directed against the judgment and order, dated September 17, 1962, of the Appellate Bench of the High Court of Madras which reversed the judgment of a Single Judge who heard the writ petition filed by the said Hazarimal and allowed it quashing an order of the Assistant Collector of Customs Section 167(8) of the Sea Customs Act, 1878. 2. The said Hazarimal had obtained from the Joint Chief Controller of Imports, Madras, a licence permitting him import of electric bulbs falling under Entry 38A(f) of the Schedule of the Import Trade Control Policy Book, popularly known as the Red Book, for the period from July to December, 1956. The book was issued by the Government of India and contained Governments policy and directives as to import and export framed under the Imports and Exports (Control) Act, 1947 and the Import Control Order, 1955, issued thereunder. 3. The said Hazarimal imported in all 46 cases of electric bulbs, 42 of which contained bulbs of 12 of 16 volts, 21 candle power, and the rest of 6 to 7 volts of 3 candle power from concern in Japan. The goods arrived in Madras port of June 5, 1957. A Bill of Entry for clearance of the goods was filed. But the Assistant Collector of Customs did not permit clearance of the goods on the ground that they were auto-bulbs and were not covered by Entry 38A(f) for which only the licence was granted. His view was that they fell under Entry 38A(e). On August 14, 1957, he issued a show cause notice. The said Hazarimal filed his reply to the said notice on October 17, 1957. The Assistant Collector, not satisfied with the said reply, passed an order that the said goods fell under Entry 38A(e) and not under Entry 38A(f), that they were consequently imported without a valid licence and directed their confiscation under Section 167(8) of the Sea Customs Act. He, however, gave option to pay Rs. 18, 500 as fine in lieu of confiscation. The said Hazarimal paid the fine, cleared the said goods and promptly sold them away. 4. In his reply to the said show cause notice, Hazarimal had relied on his having imported electric bulbs in 1955 (the said goods having arrived in January, 1956), on an objection having then been taken by the Customs, his having thereupon sent certain samples to the Chief Controller of Imports, New Delhi and obtaining from that authority a clarification that the goods fell under Entry 38A(f) and the Customs thereupon having allowed clearance and having even recommended refund of transit charges which he had been obliged to pay to the Port Trust Authorities on account of the said goods having been detained by the Customs and having thus remained in the Port Trust premises uncleared for some time. It may, however, be mentioned that the Customs had been allowed the goods to be cleared as a "special case" and after a warning to Hazarimal that he should not import similar goods in future. Even the Chief Controller in his clarification had stated that though the goods fell, according to him, under Entry 38A(f), under Clause (ii) of the remarks column to that entry import could be made only to the extent of 15% of the face value mentioned in the licence. As aforesaid, the Assistant Collector was not impressed by the explanation given by Hazarimal and held that the goods in question were not covered by Entry 38A(f) and that they were auto-bulbs falling under Entry 38A(e) for which the said Hazarimal did not possess a licence. It may also be mentioned that Hazarimal had made a representation to the Collector of Customs against the said warning but inspite of the correspondence between the two, the Collector had not cancelled nor reversed the said warning. Entry 38A(e) runs as follows :"Motor car lamps (auto-bulbs)." The remarks column to Entry 38A(e) reads as follows :"(i) Licences will be valid for the import of all types of sealed beam head-light lamps only; (ii) Licences can also be utilised for import from the dollar area; (iii) Import of sealed beam head-light lamps will also be allowed against licences for motors vehicles parts falling under Section No. 293 ........." Entry 38A(f) is a residuary entry, the description of the goods therein set out being "other lamps". The remarks column as against the entry reads as follows : (ii) The under mentioned types of lamps can be imported up to 15% of the face value of basic quota licence or up to Rs. 500/- whichever is higher 5. The said Hazarimal did not file any appeal against the impugned order, but approached the High Court by way of a writ petition for certiorari. The ground on which the said order was sought to be quashed was not that the opportunity of being heard given to him was not adequate but on the ground that the impugned order suffered from an error apparent on the face of the record, and therefore, was liable to be quashed. The learned Single Judge, who heard the writ petition in the first instance, accepted the contention and quashed the order holding : (1) that it was an apparent error on the part of the Assistant Collector to rely on the fact that Hazarimal had not appealed against the said warning as there could be no appeal against such warning, (2) that it was an error on the part of the Assistant Collector to have thought that the said clarification did not amount to a reversal of the Customss classification of the import of 1955 under Entry 38A(e), and (3) that it was also an error on the part of the Assistant Collector to have thought that even if the import in question fell under Entry 38A(f), the importer could not import goods of the full face value in the licence but could do so only to the extent of 15% thereof, as, notwithstanding such a statement in the said clarification by the Chief Controller, there was no such restriction in the licence and such a restriction was not relied upon in the show cause notice. On these grounds the learned single Judge quashed the Assistant Collectors order and allowed the writ petition. On a letters patent appeal against that order, a Division Bench of the High Court held that the real question in the writ petition was whether the classification of the goods made by the Assistant Collector was correct or not, that question was one of fact, that the clarification obtained from the Chief Controller for the import of the previous year could not govern the present import in the absence of proof that the goods for both the years were the same or similar, that therefore, what the learned single Judge had called "the previous history" could not be determinative, and holding that there could be no error of law apparent on the face of the record as the classification was a question of fact allowed the appeal and dismissed the writ petition. Hence this appeal. 6. As aforesaid, the writ petition was for a writ of certiorari to quash the said order on the ground that there was an error apparent on the face of the record. It was opposed on the ground that there was no such error and that the only real question involved in the writ petition was whether the classification of the imported goods by the Customs under Entry 38A(e) and not under Entry 38A(f) was correct. Such a question would be one of fact, and therefore, if the appellants were aggrieved by such a finding, their remedy would be an appeal provided under the Act. But the contention before the High Court was that in respect of a similar consignment imported in 1955 the appellants had on a similar classification by the Customs obtained a clarification from the Chief Controller that these goods were covered by Entry 38A(f) and thereupon the Customs had allowed the clearance and even recommended refund of transit charges from the Port Trust. 7. The learned single Judge was impressed by the said clarification having been obtained by the said Hazarimal and what he called "the previous history". No attempt, however, was made to show that goods imported in the year in question were the same or similar to the goods imported in the previous year and in respect of which the clarification was obtained. That circumstance is important because the said clarification was given on an examination of certain samples sent by Hazarimal to the Chief Controller and on which examination that authority had pronounced the goods to be covered by Entry 38A(f). That clarification, however, could not be determinative of the goods in question because there was no evidence at the time of the hearing of the writ petition that the goods in question were similar to those imported in the previous year or to the said samples. Strangely, the said Hazarimal did not this time obtain a similar clarification, which he could have obtained in view of the finding by the Customs that the goods were auto-bulbs, and therefore, did not fall under Entry 38A(f). Indeed, the said Hazarimal had disabled himself from having any comparison made between the goods for which the said clarification was obtained in the previous year and the goods in question, for, as soon as he had the goods cleared on payment of the fine he had disposed them of without even retaining any samples. It was, therefore, not possible to say whether the goods in question were comparable with the goods in respect of which he had obtained clarification in the previous year. 8. The argument before us, however, was that the learned single Judge was right in holding that there were two apparent errors of law in the Assistant Collectors order, in that, he had relied on (a) a warning in respect of the previous years consignment, and (b) a restriction on future imports of similar goods to the extent of 15% of the face value mentioned in the licence. The contention was that both these facts were not sustainable. As regards (a), there can be no doubt that the order of the Assistant Collector contained a warning inspite of the said clarification that in future import should not be made of similar goods under the licence possessed by Hazarimal. Inspite of the correspondence by Hazarimal with the Collector the warning was never withdrawn nor cancelled. The goods were allowed clearance presumably because of the said clarification but only as a "special case". Therefore, it was not as if there was no such warning in the order passed by the Customs in the previous year. But the real question before the High Court was not whether there was such a warning or not but whether the said clarification applied to goods in question. In other words, whether the goods were the same as the samples from the previous consignment on which the clarification was issued by the Chief Controller. In the absence of any proof that they were, the High Court obviously could not say that they were governed by the said clarification, and that, therefore, the goods did not fall under Entry 38A(e), as the Assistant Collector had ruled, or that there was any apparent error in that finding. It appears that except for relying on the said clarification no attempt was made at any time to establish that the goods were similar to those of the previous years imports and therefore, could not be classified as auto-bulbs. 9. As regards (b), assuming that the present goods were governed by the said clarification, the Chief Controller had stated therein that though the samples fell under Entry 38A(f), imports of such goods could be made only to the extent of 15% . The learned single Judge was of the view that the Assistant Collector could not rely on this restriction because the licence did not contain any such restriction, nor was such a restriction relied on in the show cause notice. The clarification clearly stated that in view of Clause (ii) of the remarks column in Entry 38A(f) import of goods to the extent of 15% only would be permissible. The licence, no doubt, did not contain any such restriction. But if the licence was in respect of goods falling under that entry, the restriction in, that entry would govern the licence as one of the conditions upon which import could be made under it. The restriction of 15% stated in the clarification could not be relied on in the show cause notice because the Customs case in the notice was that the goods were auto-bulbs falling under Entry 38A(e), for the import of which the licence did not apply. The question of restriction to the extent of 15% arose only when Hazarimal relied upon the said clarification in his explanation to the show cause notice. It was, therefore, that the Assistant Collector in his order stated that even if the goods were covered by that clarification, only 15% of the value stated in that licence could be imported. It is thus difficult to see how the impugned order suffered from either of the two errors of law apparent on the record. 10. The contention next was that the Division Bench was in error when it observed that the goods in question were not proved to be similar to those in respect of which the said clarification was obtained as the Assistant Collector in his order had clearly admitted that they were similar. This contention cannot be upheld, for, it is made on an erroneous construction of the impugned order. The order in the first place clearly held that the goods were auto-bulbs. Upon that finding there was no question of the said clarification being applicable to them. Alternatively, the order stated that even if the clarification were to apply on the footing that the goods were similar to those of the previous years import then the restriction of 15% import contained in the clarification would apply, and that, therefore, in either case the import could not be held valid. In view of such clear language in the impugned order the Division Bench cannot be said to have been in error as contended by Counsel. 11. Lastly, it was urged that the Assistant Collectors order was vitiated by his failure to observe that rules of natural justice, in that, he had omitted to place materials obtained by him on examination of the goods to the said Hazarimal in the proceedings before him. No such contention was raised either in the writ petition or before the High Court at any stage. There was, therefore, no opportunity to the Customs to reply to such a contention, and therefore, we could not allow Counsel to raise the point for the first time. It was then faintly argued that the Assistant Collector had no jurisdiction to hold the goods to be auto-bulbs in view of the said clarification that the goods of the previous years import were not auto-bulbs. Assuming for the moment that the said clarification was binding on the Assistant Collector, who is the competent authority under the Sea Customs Act, no evidence was adduced that the goods in question were similar to the goods imported in the previous year or answered the samples on which the clarification had been obtained. There was, therefore, no question of the clarification being binding on the Assistant Collector. 12. In our view none of the contentions to show that the Division Bench was in error can be sustained. No error of law apparent on the face of the record has been established which could justify us to interfere with the impugned order of the Customs.

Decision reasoning: 0[ds]6. As aforesaid, the writ petition was for a writ of certiorari to quash the said order on the ground that there was an error apparent on the face of the record.It was opposed on the ground that there was no such error and that the only real question involved in the writ petition was whether the classification of the imported goods by the Customs under Entry 38A(e) and not under Entry 38A(f) was correct.Such a question would be one of fact, and therefore, if the appellants were aggrieved by such a finding, their remedy would be an appeal provided under the ActThat circumstance is important because the said clarification was given on an examination of certain samples sent by Hazarimal to the Chief Controller and on which examination that authority had pronounced the goods to be covered by Entry 38A(f). That clarification, however, could not be determinative of the goods in question because there was no evidence at the time of the hearing of the writ petition that the goods in question were similar to those imported in the previous year or to the said samples. Strangely, the said Hazarimal did not this time obtain a similar clarification, which he could have obtained in view of the finding by the Customs that the goods were, and therefore, did not fall under Entry 38A(f). Indeed, the said Hazarimal had disabled himself from having any comparison made between the goods for which the said clarification was obtained in the previous year and the goods in question, for, as soon as he had the goods cleared on payment of the fine he had disposed them of without even retaining any samples. It was, therefore, not possible to say whether the goods in question were comparable with the goods in respect of which he had obtained clarification in the previous yearThe contention was that both these facts were not9. As regards (b), assuming that the present goods were governed by the said clarification, the Chief Controller had stated therein that though the samples fell under Entry 38A(f), imports of such goods could be made only to the extent of 15% . The learned single Judge was of the view that the Assistant Collector could not rely on this restriction because the licence did not contain any such restriction, nor was such a restriction relied on in the show cause notice. The clarification clearly stated that in view of Clause (ii) of the remarks column in Entry 38A(f) import of goods to the extent of 15% only would be permissible. The licence, no doubt, did not contain any such restriction. But if the licence was in respect of goods falling under that entry, the restriction in, that entry would govern the licence as one of the conditions upon which import could be made under it. The restriction of 15% stated in the clarification could not be relied on in the show cause notice because the Customs case in the notice was that the goods weres falling under Entry 38A(e), for the import of which the licence did not apply. The question of restriction to the extent of 15% arose only when Hazarimal relied upon the said clarification in his explanation to the show cause notice. It was, therefore, that the Assistant Collector in his order stated that even if the goods were covered by that clarification, only 15% of the value stated in that licence could be imported. It is thus difficult to see how the impugned order suffered from either of the two errors of law apparent on the recordThis contention cannot be upheld, for, it is made on an erroneous construction of the impugned order. The order in the first place clearly held that the goods were. Upon that finding there was no question of the said clarification being applicable to them. Alternatively, the order stated that even if the clarification were to apply on the footing that the goods were similar to those of the previous years import then the restriction of 15% import contained in the clarification would apply, and that, therefore, in either case the import could not be held valid. In view of such clear language in the impugned order the Division Bench cannot be said to have been in error as contended by CounselNo such contention was raised either in the writ petition or before the High Court at any stage. There was, therefore, no opportunity to the Customs to reply to such a contention, and therefore, we could not allow Counsel to raise the point for the first time. It was then faintly argued that the Assistant Collector had no jurisdiction to hold the goods to bes in view of the said clarification that the goods of the previous years import were not. Assuming for the moment that the said clarification was binding on the Assistant Collector, who is the competent authority under the Sea Customs Act, no evidence was adduced that the goods in question were similar to the goods imported in the previous year or answered the samples on which the clarification had been obtained. There was, therefore, no question of the clarification being binding on the Assistant Collector12. In our view none of the contentions to show that the Division Bench was in error can be sustained. No error of law apparent on the face of the record has been established which could justify us to interfere with the impugned order of the Customs.