Girdharilal Bansidhar Vs. Union of
India  INSC 60 (6 March 1964)
06/03/1964 AYYANGAR, N.
RAJAGOPALA AYYANGAR, N. RAJAGOPALA GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N.
CITATION: 1964 AIR 1519 1964 SCR (7) 62
D 1971 SC1558 (6,16,18) F 1973 SC 194 (9)
Sea Customs Act, 1878(8 of 1878)-Prohibition
on import of certain article-Component parts of that article if within
prohibition-Conclusions of Customs authorities based on several items of
Hand-book-Correctness thereof, whether can be considered by High
Court-Constitution of India, Art.
226. Evidence taken into consideration though
not mentioned in notice to show cause-Natural justice, if violated.
The appellant who was granted a license to
import "iron and steel bolts, nuts, set screws, machine screws and machine
studs, excluding bolts, nuts and screws adopted for use on cycles",
imported nuts and bolts which were the components of "Jackson Type Single
bolt oval plate belts fasteners" which were described in the bill of Entry
as "Stove Bolts and Nuts." The importation of "Jackson Type
Single bolt oval plate belt fasteners" had been prohibited. When the goods
were attempted to be passed through the customs, the collector issued notice to
the appellant to show cause why penalties should not be imposed on him(a) for
mis-describing the goods and (b) for attempting to import goods without a
proper import license. After receiving his explanation, penalties were imposed
on the appellant. One of the facts which the Collector of Customs bad taken
into consideration in arriving at the conclusion that the nuts and bolts
imported were in reality the actual components of the prohibited articles was
that washers, the third component of the prohibited articles were imported by a
firm owned or controlled by close relations of the appellant. An appeal to the
Central Board of Revenue from the order of the Collector imposing the penalties
was dismissed. Thereafter, the appellant filed a writ petition under Art. 226
of the Constitution in the High Court which was dismissed in limine. On appeal
by special leave:
Held: (i) A component part which has no use
other than as a component of an article whose importation is prohibited is
included in a ban or restriction as regards the importation of that article.
D. P. Anand v. M/s. T. M. Thakore and Co.,
Appeal No. 4 of 1959 of Bombay High Court referred to.
(ii) There was no force in the contention
that the decision of the Collector of Customs was vitiated by a patent error,
in that he misconstrued the scope of Entry 22 of Part 1 of the Import Trade
A court dealing with a petition under Article
226 is not sitting in appeal over the decision of the Customs Authorities and
therefore the correctness of the conclusion reached by those authorities on the
appreciation of the several items in the Hand-book or in the Indian Tariff Act
which is referred to in these items, is not a matter which falls within the
writ jurisdiction of the High Court.
63 A. V. Venkateswaran, Collector of Customs,
Bombay v. Ramchand Sobhraj Wadhiwani,  1 S.C.R. 753, referred to.
(iii)Taking into consideration the
importation of washers by another firm was merely evidence to confirm the
conclusion reached by the Collector that the nuts and bolts imported were in
reality the components of the prohibited article.
The charge which the importer was called upon
to answer did specify the nature of offence which he was alleged to have
committed and if the evidence which the appellant could have rebutted was
brought on record and considered in his presence and that evidence conclusively
proved the real nature of the articles imported, there could be no justifiable
complaint of violation of the principles of natural justice.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 318 of 1962.
Appeal by special leave from the judgment and
order dated November 27, 1959 of the Punjab High Court (Circuit Bench) at Delhi
in Civil Writ Petition No. 545-D of 1959.
Purshottam Trikamdas, M. V. Goswami and B. C.
Misra, for the appellant.
W.S. Barlingay and R. H. Dhebar, for the
March 6, 1964. The Judgment of the Court was
delivered by AYYANGAR, J.--There are no merits in this appeal by special leave
and it deserves to be dismissed. The appellant obtained, in November 1951, an
import licence from the Joint Chief Controller of Imports at Calcutta, for
importing "iron and steel bolts, nuts, set screws, machine screws and
machine studs, excluding bolts, nuts and screws adapted for use on cycles".
In purported conformity with this licence the appellant imported from Japan
through the Bedi port 221 cases of bolts and nuts during the period April 4,
1952 to July 14, 1952. The cases were described in the Bills of Entry which he
filed as "Stove Bolts and Nuts" and he produced the import licence of
November 1951 as his authority to clear the goods. One hundred and ninety-two
of these cases were cleared out of the port customs but before the rest of the
89 cases could be cleared, the Customs authorities got suspicious that the
goods were mis-described and though called "Stove Bolts and Nuts" in
the invoices and relative documents they were really identifiable parts of
bolts and nuts of the "Jackson Type single bolt oval platebelt
fasteners" whose importation had been prohibited by a Notification of the
Ministry of Trade issued in January 1952. Their suspicions got confirmed after
examination of the samples of the nuts and bolts imported and thereafter a
notice was issued to the appellant to show cause why he should not be proceeded
against (a) for mis-describing the 64 goods as "stove bolts and nuts"
and (2) for importing and attempting to import goods without a proper import
licence this being an offence under s. 167(8) of the Sea Customs Act. The
appellant showed cause and in the written pleas which he filed, he raised two
defences; (1) that the description of the goods as "stove and nuts"
was merely a description given by the manufacturers in their invoices and he
himself not being acquainted with the technical details could not be held
responsible for the description given in the invoices which was copied in the
Bill of Entry not being precise or exact and (2) that even if the bolts and
nuts which he imported were identifiable parts of the "single bolt belt fasteners"
whose importation was banned, there had been, on a proper construction of the
import licence, read in conjunction with the Import Trade Regulations under
which it was issued, no contravention since the ban on importation by the
notification was confined to a complete "Jackson type single bolt belt
fastener" and did not extend to the importation of the component parts of
such a belt fastener.
These two defences were examined by the
Collector of Central Excise. As regards the first he found from the correspondence
exchanged between the appellant and his foreign suppliers and produced by the
appellant himself in his defence at the hearing, that the name "stove
bolts and nuts" had been decided upon by the appellant himself after
samples of the nuts and bolts which he desired to import had been received and
examined by him. Practically therefore during the hearing before the Collector
the appellant conceded that the name "stove bolts and nuts" was a mis
description of the articles which he actually imported. The next question was
whether the appellant was guilty of an offence of the nature described in s.
167(8) of the Sea Customs Act. The Collector recorded a finding that the
appellant was guilty of a contravention of this provision which reads:
"If any goods, the importation or
exportation of which is for the time being prohibited or restricted by or under
Chapter IV of this Act, be imported into or exported from India contrary to
such prohibition or restriction-, or if any attempt be made so to import or export
any such goods;........" in reaching this finding the Collector was
satisfied from the samples which were forwarded to the appellant and which were
approved by him before finalising the indent, that the appellant was really
ordering and importing nuts and bolts which were identifiable components of
"Single bolt belt fasteners" whose importation was prohibited. He
arrived 65 at this conclusion because (1) the bolts and screws imported by the
appellant were those specially adapted by reason of their structure and details
for use as "single bolt belt fasteners" and (2) these nuts and bolts
could not be put to any use other than as components of a belt fastener of the
type whose import was prohibited.
In further support of his conclusion that the
appellant really intended to evade the prohibition imposed by the Notification
of January 1952 by which the importation of" single bolt belt
fasteners" was prohibited, the Collector referred to the fact that these
single bolt belt fasteners were composed of three components (1) a bolt (2) a
nut and (3) washers. The washers to fit into the bolts and nuts imported by the
appellant were found to have been separately imported by a firm called
Nawanagar Industries Ltd. which was owned or controlled by close relations of
Having thus received confirmation about the
real intention of the appellant to evade the prohibition contained in the
Notification and thus contravene the provisions of s. 167(8) of the Sea Customs
Act, the Collector imposed the penalty of confiscation of the goods and gave
the owner under s. 183 of the Sea Customs Act the option to pay a fine of Rs. 5
1,000 to redeem the confiscated goods. He also imposed a personal penalty of
Rs. 1,000 on the appellant under s. 167(37)(c) of the Sea Customs Act for mis-describing
the goods in the Bills of Entries which he had filed. The appellant filed an
appeal to the Central Board of Revenue which was dismissed.
The argument before the appellant authority
again was that what was prohibited was an assembled "Jackson Type single
belt oval plate belt fasteners" but that this notification could not be
read as imposing a ban on the importation of the parts of such a belt fastener
though these parts may be identifiable and the parts could have no use other
than as components of the article whose importation was prohibited.
This submission was rejected, and appeal was
Thereafter the appellant applied to the High
Court of Punjab for the issue of a writ of certiorari under Art. 226 of the
Constitution and this having been dismissed in limine, moved this Court for
special leave which was granted. That is how the appeal is before us.
Two points were urged by Mr. Purshottam on
behalf of the appellant. The first was that the appellant having been granted a
licence to import "nuts and bolts" falling under item 22 of Part 1 of
the Import Trade Control Hand-book for the relevant year, the appellant was
entitled to import iron and steel bolts and nuts, whatever be the purpose they
66 served. The only limitation imposed upon the appellant by the import licence
which was granted to him and which reproduced the terms of Entry 22 in the
Hand-book was that he could not import bolts and nuts adapted for use on
The limitation thus imposed, it was urged,
also indicated that if the nuts and bolts were adapted for use on articles
other than on cycles they could still import them unless the importation not
merely of the other article but its components was also prohibited or
restricted. In this connection our attention was drawn to item 28 of Part II in
the same Hand-book reading 'Belting for machinery, all sorts, including belt
laces and belt fasteners'. The Notification dated January 12, 1952 was a
clarification issued in respect of licensing policy for January-June, 1952.
Dealing with serial No. 28 of Part 11 which we have extracted just now, the
"Jackson type oval plate belt fasteners
(other than single bolt). General licences will be granted freely subject to
the provisions of Public Notice No. 189-ITC(PN)/51, dated the 28th December,
Jackson type oval plate single bolt belt
fasteners. No imports will be granted from any source." It was not
disputed that having regard to the terms of the import licence issued to the
appellant the Notification as regards the prohibition against the importation
of "Jackson Oval Plate Single Bolt belt fasteners" would apply to the
appellant's licence and these belt fasteners could not be imported after
January 1952. For the import licence specifically stated:
"This licence is granted under
Government of India, Ministry of Commerce, Notification No. 23-ITC/ 43, dated
the 1st July, 1943, and is without prejudice to the application of any other
prohibition or regulation affecting the importation of the goods which may be
in force at the time of their arrival." The point, however, sought to be
made was that the components of such a belt fastener could still be imported
because it was said that the scheme of the Import Trade Control Hand-book was
to specify wherever it was so intended "component parts" along with
the articles of which they formed components, when a restriction or prohibition
was intended to be imposed upon them also. It is, no doubt, true that in some
cases component parts are specifically included in some of the items in the
Hand-book. It might very well be that this feature might be explained on the
ground 67 of the specification being by way of abundant caution, or possibly
because in them the component parts might have an independent use other than as
components of the articles specified. It appears to us that it does not stand
to reason that a component part which has no use other than as a component of
an article whose importation is prohibited is not included in a ban or restriction
as regards the importation of that article. Expressed in other terms. we cannot
accede to the position that it is the intention of the rule that importers are
permitted to do indirectly what they are forbidden to do directly, and that it
permits the importation separately of components which have no use other than
as components of an article whose importation is prohibited, and that an
importer is thereby enabled to assemble them here as a complete article though
if they were assembled beyond the Customs Frontiers the importation of the
assembled article into India is prohibited. Learned Counsel, however, relied
upon an unreported judgment of the Bombay High Court delivered by Mr. Justice
Mudholkar when a judge of that Court, in Appeal No. 4 of 1959 (D. P. Anand v.
M/s. T. M. Thakore & Co.) in support of his submission that a ban on a
completed article, having regard to the phraseology employed in the Hand-book
cannot be read as a restriction or prohibition of the separate importation of
the component parts which when assembled result in the article whose import is
prohibited. We do not read the judgment in the manner suggested by learned
Counsel. The learned Judge in the judgment recorded an admission that the
articles imported which were components of a motor-bicycle, would not when
assembled form a complete cycle which was the article whose importation was
restricted, because of the lack of certain essential parts which were
admittedly not available in India and could not be imported.
The next submission of the learned Counsel
was that the decision of the Customs Collector was vitiated by a patent error,
in that he misconstrued the scope of Entry 22 of Part 1 of the Import Trade
Control Hand-book. In support of this submission the learned Counsel invited
our attention to the decision of this Court in A. V. Venkateswaran Collector of
Customs. Bombay v. Ramchand Sobhraj Wadhwani and Anr.(1).
We see no force in this argument. The
decision of this Court referred to proceeded on the basis set out on page 757
of the Report where this Court said:
"The learned Solicitor-General appearing
for the appellant argued the appeal on the basis that the view of the learned
Judges of the Bombay  1 S.C.R. 753.
L/P(D)-3(a) High Court that on any reasonable
interpretation of the items in the Schedule to the Tariff Act the consignment
imported by the respondent could have been liable only to a duty of 30 per cent
under item 45(3) was correct." Learned Counsel cannot therefore derive any
support from this decision. Besides, what we have said earlier should suffice,
to show that the conclusion reached by the authority that the offence under s.
167(8) has been made out, is not incorrect. This apart, we must emphasise that
a court dealing with petition under Art. 226 is not sitting in appeal over the
decision of the Customs authorities and therefore the correctness of the
conclusion reached by those authorities on the appreciation of the several
items in the Hand-book or in the Indian Tariff Act which is referred to in these
items, is not a matter which falls within the writ jurisdiction of the High
Court. There is, here, no complaint of any procedural irregularity of the kind
which would invalidate the order, for the order of the Collector shows by its
contents that there has been an elaborate investigation and personal hearing
accorded before the order now impugned was passed.
Learned Counsel next submitted that the
Collector of Customs had taken into consideration the importation of the
washers by the Nawanagar Industries Ltd. in arriving at the conclusion that the
appellant had violated s. 167(8) of the Sea Customs Act and that as in the
notice that was served upon him to show cause this was not adverted to, the
order adjudging confiscation was illegal and void for the reason that there had
been a violation of the principles of natural justice and procedural
irregularity in the hearing. We are not impressed by this argument. This
submission proceeds upon a total misapprehension of the significance of the
separate import of the washers by the sister concern. That import was not and
could not be the subject of any charge against the appellants, and the
appellants were not punished for that importation. It was merely evidence to
confirm the conclusion reached by the Collector that the nuts and bolts
imported were in reality the actual components of the Jackson type belt
fastener whose importation was prohibited.
The charge which the appellant was called on
to answer did specify the nature of the offence which he was alleged to have
contravened, and if evidence which the appellant could have rebutted was
brought on record and considered in his presence and that evidence conclusively
proved the real nature of the articles imported, there could certainly be no
justifiable complaint of violation of the principles of natural justice. The
misdescription of the article imported in the Bill of Entry having practically
been admitted and there being 69 not much dispute that the goods imported were
really components of the Jackson type single belt fasteners, nothing more was
needed to establish a contravention of s. 167(8).
The reference therefore to the Nawanagar
-which imported the washers merely confirmed
In these circumstances we do not consider
that there is any substance in this objection.
The result is that this appeal fails and is
dismissed with costs.