Case: Union Of India Vs. Tarachand Gupta &amp; Bros

2. The respondents held an import licence dated July10, 1956 permitting them to import parts and accessories of motor cycles and scooters as per appendix XXVI of the import Policy Book for July December 1956. Under the said licence, the respondents imported certain goods which arrived in two consignments, each containing 17 cases, by two different ships. According to the respondents, the goods so imported ,by them were motor cycle parts which their licence authorised them to import. The Customs authorities, on the contrary, held, on examination of the goods, that they constituted 51 sets of "Rixe Mopeds complete in a knocked down condition". The Deputy Collector of Customs thereupon held an enquiry in pursuance of two show cause notices issued by him.3. The result of the enquiry was an order under which the Deputy Collector directed- confiscation of the said goods with an option to the respondents to pay certain sums in lieu of confiscation and also personal penalties. That order was passed on the basis that the goods imported were not parts and amemories of motor cycles and scooters permissible under Entry 295 of the Schedule to the Import Control Order but were motor cycles/scooters in completely knocked down condition, prohibited under remark II against Entry 294, a licence in respect of goods covered by it would authorise import of motor cycles and scooters. The order of the Deputy Collector dated November 19, 1957 reads as underexamination of the goods and scrutiny of the documents relating to the Bills of Entry stated above it was ascertained that M/s. Tarachand Gupta and Bros., had imported 51 sets of "Rixe" Mopeds complete (except tyres, tubes and saddles) in a knocked down condition. The total number of consignments covered by the aforesaid two Bills of Entry were sufficient to give exactly 51 sets complete Rixe Mopeds (except for tyres, tubes and saddles which would in any case have required a separate licence). The packing was also such as to show that those were nothing but "Mopeds" in a disassembled condition, since each of the cases contains components relating to three mopeda. Moreover, it was found that major components such as the framers, completely fitted with electrical wires and control cables and grips, had been imported in equal numbers. All these went to show that the goods were not imported as spare parts but as complete vehicles in a knocked down condition. The goods were, therefore considered to be correctly classifiable under Item 75 (2) of the I.C.T, corresponding to S No. 294/IV of the I. T. O. Schedule. The licence under which clearance was sought, could not therefore, beDeputy Collector rejected the respondents contention that the two consignments which arrived in two different ships at different dates should be viewed separately, that the machines were incomplete as they were without tyres, tubes and saddles, and therefore, they could not be said to constitute minor cycles in knoked down condition. He held, on the other hand that though the goods were not in completely knocked down condition it made no difference in the tyres, tubes and saddles were easily obtainable in India and their absence did not prevent the machines being otherwise complete. He also found that there was a trade practice under which traders were supplying motor cycle without tyres, tubes and saddles unless the purchaser specially asked for those parts. According to him, the goods could not be regarded as spare parts but were "Mopeds in disassembled condition."4. In the suit filed by the respondents in the High Court against the said order, the Trial Judge held, on the authority of the Secy. of State v. Mask and Co., 67 Ind App 222= (AIR 1940 PC 105  ) that an order of a staturoty tribunal, such as the Collector of Customs under the Sea Customs Act, which the statute makes final, subject, of course, to an appeal provided under it, can be set aside in a suit before a Civil Court on two grounds only, namely, where the provisions of the Act have not been complied with, or where the tribunal has failed to act in conformity with the fundamental rules of judicial procedure. He rejected the respondents contention that the case fell within the first ground and held that however erroneous the Collectors decision might be, since it was within his jurisdiction to decide whether the goods fell under one entry or the other, a Civil Court had no jurisdiction to grant relief. He also held that the order could not be said to be without or in excess of jurisdiction and was, therefore, not a nullity. The order consequently required to be set aside if the respondents were to have any relief, and therefore, Article 14 of the Limitation Act. 1908 applied. On that basis he held the respondents suit to be time barred and dismissed it.5. We may, at this stage, mention that in a similar matter involving import of spare parts and accessories under a licence relating to Entry 295, the Collectors order, on the basis that the goods fell under Entry 294, as the spare parts in question could, if all the different indents were taken together, constitute auto cycles in completely knocked down condition was held to be bad as "the Collectors approach to the matter was wholly wrong" by a Division Bench of the same High Court in D.P. Anand v. M/s. T.M. Thakore and Co., Civil Appl. No. 4 of 1959, D/- 17-8-1960 (Bom.). According to that judgment, the jurisdiction of the Collector was to ascertain whether the goods, such as they were, were properly imported under the licence relating to goods under Entry 295, i.e. whether they were spare parts and accessories, and not to go further and find out whether they would, when put together, constitute auto cycles in completely knocked down condition as envisaged by Entry 294, and therefore, the order was amenable to interference by the High Court. The Trial Judge held, on the authority of this Judgment that on merits the Collector of Customs was in error in holding the respondents guilty of importing goods not covered by the licence held by them and that the Collector would have been bound by that judgment had it been delivered before he passed the impugned order. He however, was of the view that whereas the High Court in D. P. Anands case Civil Appl No. 4 of 1959. D/-17-8-1960 (Bom). interfered with the order in its writ jurisdiction, a suit could not lie as the impugned order was within the jurisdiction of the Collector and the mere fact that he applied a wrong entry did not invest the civil Court with the jurisdiction to entertain a suit and set aside such an order.6. The letters patent Bench of the High Court following the judgment in Anands case, Civil Appl. No. 4 -of 1959. D/- 17-8-1960 (Bom) agreed with the Trial Judge that on, merits the Collector was in error. Following that judgment the Bench also held that the Collectors jurisdiction was limited to ascertain whether or not the goods imported by the respondents were spare parts and accessories covered by entry 295 in respect of which they undoubtedly held the licence and therefore, he could not have lumped together the two consignments which, though imported under one licence, arrived separately and were received on different dates and could not have come to the conclusion that the plaintiffs (i. e., the respondents herein) had imported 51 "Rixe" Mopeds in a completely knocked down condition. The Bench also held that upon the principle laid down in Anands case, Civil Appl. No. 4 of 1959, D/- 17.8-1960 (Bom) it was nor for the Collector to ascertain whether he goods, if assembled together, would constitute 51"Rixe" Mopeds in C. K. D. condition. The respondents were entitled to import the said goods, and therefore, Section 167 (8) of the Sea Customs Act did not apply and the respondents consequently could not have been held guilty of breach either of that section or Section 3 of the Imports and Exports (Control) Act The Bench also held that the decision of this Court in Girdharilal Bansidhar v. Union of India, (1964) 7 SCR 62   = (AIR 1964 SC 1591) did not overrule but only distinguished the judgment in Anands case, Civil App. No. 4 of 1959 D/- 17-8-1960 (Bom) and therefore, the binding force of that decision remained unshaken- Regarding the jurisdiction of civil courts, the Division Bench ,held that where the question is simply whether one or the other entry applies and the tribunal, to which jurisdiction is entrusted in that behalf, decides it erroneously, even then its order, made final by the statute conferring such jurisdiction, cannot be made the subject matter of a suit. On the other hand, where its jurisdiction is confined to see whether the importation is under a particular entry or not, but while deciding such a question, the tribunal takes into account extraneous considerations, such as an entry which has no bearing upon the question, the case would fall outside the ambit of the powers of the statutory authority. The question, in other words, would then be, whether the tribunal has exceeded its jurisdiction and therefore acted in noncompliance with the provision of the statute under which it has to decide the question. The Division Bench deprecated the attempt on the part of the Collector in considering the two consignments together and making out a case that the two, when put together, would make it possible to regard the goods as "Rixe" Mopeds in C. K. D. condition. Such an attempt the Bench observed, was "a new classification conjured up by the authorities to rope in the imports as being illegal which according to the terms of the licence and entry No. 295 would be clearly legal". Lastly, the Division Bench disagreed with the Trial Judge who had held that the article in the Limitation Act applicable was Article 14 on the ground that once it was accepted that the order was in excess of jurisdiction it was a nullity, and therefore, there was no question of its having to be set aside. Following A. Venkata Subba Rao v. Andhra Pradesh, (1965) 2 SCR 577   = (AIR 1965 SC1773) it held that the suit fell under Article 62, and therefore, was within time.

Court's reasoning:
In the absence of any restriction in entry 295, namely, that a licence in respect of goods covered by entry 295 would not be valid for import of parts and accessories which when taken together, would make them motor cycles and scooters in C. K. D. condition, the respondents could import under their licence all kinds and types of parts and accessories Therefore, the mere fact, that the goods imported by them were so complete that when put together would make them motor cycles and scooters in C.K. D. condition, would not entry 295. Were that to be so, the position would be anomalous as aptly described by the High Court Suppose that an importer were to import equal number of various parts from different countries under different indents and at different times, and the goods were to reach here in different consignments and on different dates instead of two consignments from the same country as in the present case. If the contention urged before us were to be correct, the Collector can treat them together and say that they would constitute motor cycles and scooters in C. K. D. condition. Such an approach would mean that there is in entry 295 a limitation against importation of all parts and accessories of mater. cycles and scooters. Under that contention, even if the importer had sold away the first consignment or part of it, it would still be possible for the Collector to say that had the importer desired it was possible for him to assemble all the parts and make mater cycles and scooters in C. K. D. condition. Surely, such as meaning has not to be given to entry 295 unless there is in it or in the licence a condition that a licensee is not to import parts in such a fashion that his consignments, different though they may be, when put together would make motor cycles and scooters in C. K. D. condition. Such a condition was advisedly not placed in entry 295 but was put in the entry 294 only. The reason was that import of both motor cycles and scooters as also parts and accessories thereof was permitted, of the first under entry 294 and of the other under entry 295. A trader having a licence in respect of goods covered by entry 294 could import assembled motor cycles and scooters, but not those vehicles in C. K. D. condition unless he was a manufacturer and had obtained a separate licence therefor from the Controller of Imports who, as aforesaid, was authorised to issue such a licence on an ad hoc basis. Thus the restriction not to import motor cycles and scooters in C. K. D. condition was against an importer holding a licence in respect of goods covered by entry 294 under which he could import complete motor cycles and scooters and not against an importer who had a licence to import parts md accessories under entry 295.14. If Dr. Syed Mohameds contention were to be right we would have to import remark (ii) against entry 294 into entry 295, a thing which obviously is not permissible while construing these entries. Further, such a condition if one were to be implied in entry 295, would not fit in as it is a restriction against import of motor cycles and scooters m C. K. D. condition and not their parts and accessories. There is therefore, no question of a licensee under entry 295 doing indirectly what he was not allowed to do directly. What he was not allowed to do directly was importing motor cycles and scooters in C. K. D. condition under a licence under which he could import complete motor cycles and scooters only. That restriction, as already observed, applied to a licensee in respect of goods described in entry 294 and not a licensee in respect of goods covered by entry 295.15. The result is that when Collector examines goods imported under a licence in respect of goods covered by entry 295 what he has, to ascertain is whether the goods are parts and accessories, and not whether the goods, though parts and accessories, are so comprehensive that if put together would constitute motor cycles and scooters in C. K. D. condition. Were he to adopt such an approach, he would be acting contrary to and beyond entry 295 under which he had to find out whether the goods imported were of the description in that entry. Such an approach would in other words, be in non-compliance of entry 295.What needs to be observed in that decision is that the Collectors decision was under which of the two competing entries the imported items fell, that is, whether the goods were bolts and nuts or were components of the prohibited article. And the Court there laid down the well established principle that the High Court under Article 226, could not interfere with the decision of the authority upon whom jurisdiction to decide the question, whether the goods fell under one or the other entry, was conferred on the ground that it was erroneous. Further, the nuts and bolts imported by the appellant could only be used as components of the prohibited article. In other words, the import was of parts of the prohibited article and therefore, of the prohibited article. It was, therefore, that the Court held (1) that the Customs decision was not incorrect and (2) that the importer could not be allowed to do indirectly what he could not do directly.18. It will be noticed that the Bombay decision in D. P. Anands case. Civil Appl. No. 4 of 1959, D/17-8-1960(Bom) was not dissented from but only distinguished, and therefore, the High Court in the present case was justified in following it. It is true, however, that counsel for the appellant there relied on that decision in support of his proposition that a ban on a completed article cannot be read as a ban on the importation of its constituents, which when assembled, would result in the prohibited article, and this Court pointed out in answer that in D. P. Anands case, Civil Appl. No. 4 of 1959, D/-17-8 l960 (Bom) the imported components could not have, when assembled made up the completed article because of the lack of certain essential parts which admittedly were not available in India and could not be imported. The real distinction, however, between the two cases was that the decision of the Collector in D. P. Anands case. Civil Appl. No. 4 of 1959. D/- 17-8-1960 (Bom) was not, as was the decision in Girdharilals case,= (1964) 7 SCR 62   = (AIR 1964 SC 1591) under which of the two competing entries the imported goods fell but that the imported goods in question, if assembled together, would not be the goods covered by the entry, and therefore, not the goods in respect of which the licence was granted.The words "a decision or order passed by an officer of Customs under this Act" used in Section 188 of the Sea Customs Act must mean a real and not a purported determination. A determination, which takes into consideration factors which the officer has no right to take into account, is no determination. This is also the view taken by Courts in England. In such cases the provision excluding jurisdiction of civil Courts cannot overate so as to exclude an inquiry byThe principle thus is that exclusion of the jurisdiction of the civil Courts is not to be readily inferred. Such exclusion, however, is inferred where the of statute gives finality to the order of the tribunal on which it confers jurisdiction and provides for adequate remedy to do what the Courts would normally do in such a proceeding before it. Even where a statute gives finality, such a provision does not exclude cases where the provisions of the particular statute have not been complied with or the tribunal has not acted in conform with the fundamental principles of judicial procedure. The word "jurisdiction" has both a narrow and a wider meaning. In the sense of the former, it means the authority to embark upon an enquiry; in the sense of the latter it is used in several , one of such aspects being that the decision of the tribunal is in non-compliance with the provisions of the Act. Accordingly, a determination by a tribunal of a question other than the one which the statute directs it to decide would be a decision not under the provisions of the Act, and therefore, in excess of its jurisdiction.23. The respondents licence admittedly authorised them to import goods covered by entry 295. They could, therefore, legitimately import, on the strength of that licence, all and several kinds of parts and accessories of motor cycles and scooters. The only question, therefore, before the Collector was whether the respondents licence covered the goods imported by them. i e. whether the goods were parts and accessories. If they were, the imports were legitimate and no question of their being not covered by the licence or the respondent having committed breach of Section 3 of the Imports and Exports (Control) Act or Section 167 (8) of the Sea Customs Act could possibly arise. What the Collector, however did was that he put the two consignments together and held that they made up 51 Rixe Mopeds in C. K. D. condition and were for that reason not the articles covered by entry 295 but articles prohibited under remark (ii) of entry 294. But entry 294 deals with motor cycles and scooters complete and assembled. Remark (ii) against that entry prohibits an importer who held a licence to import motor cycles and scooters from importing motor cycles and scooters in C. K. D. condition. Remark (ii) containing that prohibition had nothing to do with entry 295 which did not condition any limitations or restrictions whatsoever against imports of parts and accessories.24. That being so if an importer has imported parts and accessories, his import would be of the articles covered by entry 295 The Collector could not say, if they were so covered by entry 295, that when jumped together, they would constitute other articles namely, motor cycles and scooters in C. K. D. condition. Such a process, if adopted by the Collector, would mean that he was inserting in entry 295 a restriction which was not them. That obviously he had no power to do. Such a restriction would mean that though under a licence in respect of goods covered by entry 295 an importer could import parts and accessories of all kinds and types, he shall not import all of them but only some, so that when put together they would not make them motor cycles and scooters in C. K. D. condition. In the Present case even that was not so because he would have to buy tyres, tubes and saddles to convert them into motor cycles and scooters into C. K. D. condition. That would be tantamount to the Collector making a new entry in place of entry 295 which must mean non-compliance of that entry and acting in excess of jurisdiction during the course at his enquiry even though he had embarked upon the enquiry with judsdiction. In our view that was precisely what the collector did. This is therefore, not one of those cases where between two competing entries the statutory authority applied one or the other though in error, and where a civil court cannot interfere.25. In this view the order was in non-compliance of the provisions of the statute and, therefore, was covered by the exceptions laid down in Mask and Co.s case, 67 Ind App 222 = (AIR 1940 PC 105  ). It was not an order in respect of which the Collector was invested with jurisdiction. That being so the provision excluding the jurisdiction of civil Courts was not applicable. Indeed the order was a nullity and Article 14 of the Limitation Act of 1908 could not be applied to hold the suit time barred. Even if Article 14 applied, it would not be time-barred, it as the High Court pointed out, the date of the appellate order was taken into consideration.