The interpretation of the Indian Customs Tariff Schedule items 45(3) and 61(8) and the availability of alternative remedies before seeking a writ of mandamus.

Headnote:
CUSTOMS - Import of fountain pens with gold plated nibs - Assessment of duty - Whether under item 45(3) or item 61(8) of the Indian Customs Tariff Schedule - Interpretation of the items - Whether the writ of mandamus was properly issued - Whether the High Court should have rejected the writ petition in limine because the petitioner had not exhausted all the statutory remedies open to him.
Fact of the Case:

The respondent imported fountain pens with gold plated nibs and caps. The Customs authorities assessed duty on the consignment at 78 3/4 per cent under item 61(8) of the Indian Customs Tariff Schedule, which dealt with "Articles, other than cutlery and surgical instruments, plated with gold or silver". The respondent appealed to the Collector of Customs, who upheld the assessment. The respondent then filed a writ petition in the High Court of Bombay, seeking a writ of mandamus or certiorari to quash the imposition of the higher rate of duty and to direct the release of the goods on payment of duty at 30 per cent under item 45(3), which dealt with "Fountain pens complete". The High Court allowed the writ petition and quashed the assessment under item 61(8), directing the Customs authorities to release the goods on payment of duty at 30 per cent under item 45(3). The Collector of Customs appealed to the Supreme Court.
Finding of the Court:

The Supreme Court held that the interpretation of the Tariff Schedule items by the High Court was correct and that the fountain pens should have been assessed under item 45(3) at a duty of 30 per cent. The Court also held that the High Court should not have issued the writ of mandamus because the respondent had not exhausted all the statutory remedies available to him, namely, an application to the Central Government under Section 191 of the Sea Customs Act to revise the order of the Collector of Customs. However, the Court dismissed the appeal on the ground that the High Court had not exercised its discretion improperly in entertaining the writ application or granting the relief prayed for by the respondent.
Issues: 1. Whether the fountain pens should have been assessed under item 45(3) or item 61(8) of the Indian Customs Tariff Schedule? 2. Whether the High Court should have rejected the writ petition in limine because the respondent had not exhausted all the statutory remedies open to him?
Ratio Decidendi: 1. The Court held that the fountain pens should have been assessed under item 45(3) of the Indian Customs Tariff Schedule, which dealt with "Fountain pens complete", at a duty of 30 per cent. The Court found that the fountain pens were "fountain pens complete" within the meaning of item 45(3), even though they had gold plated nibs and caps. The Court rejected the argument that the fountain pens should have been assessed under item 61(8), which dealt with "Articles, other than cutlery and surgical instruments, plated with gold or silver", at a duty of 78 3/4 per cent. The Court found that item 61(8) was intended to apply to articles that were plated with gold or silver, but that were not specifically provided for in other items of the Tariff Schedule. The Court found that fountain pens were specifically provided for in item 45(3), and therefore, they should not be assessed under item 61(8). 2. The Court held that the High Court should not have issued the writ of mandamus because the respondent had not exhausted all the statutory remedies available to him. The Court found that the respondent had an alternative remedy, namely, an application to the Central Government under Section 191 of the Sea Customs Act to revise the order of the Collector of Customs. The Court found that the respondent had not pursued this remedy, and therefore, he was not entitled to a writ of mandamus.
Final Decision: The Supreme Court dismissed the appeal, but upheld the High Court's decision on the merits of the case.

Judgment

RAJAGOPALA AYYANGAR, J. : This appeal by special leave is against the judgment and order of a Division Bench of the Bombay High Court by which a writ of mandamus or certiorari granted to the respondent was confirmed on appeal preferred by the appellant now before us.

2. A few facts are necessary to be stated to understand the matters in controversy and the points raised for our decision. The respondent carries on business in Bombay and he was granted on August 18, 1954, a licence under the Imports & Exports (Control) Act, 1947, for the import of fountain-pens at not less than Rs. 25 C. I. F. value each from soft currency area, up to a defined amount. He placed an order for the import of Sheaffer pens from Australia and a consignment of these was received by air in Bombay in October 1954. The fountain-pens thus imported had nibs which were gold plated and also caps and clips of similar composition. The question in controversy relates to the rate of duty to be charged on these imported pens. The Schedule to the Indian Tariff Act, 1934, has an item numbered 45(3) in relation to the article described as "fountain pens complete", the rate of duty being 30 per cent , ad valorem. It was the case of the respondent that the imported goods fell within this item and were liable to be charged with duty at that rate. The Customs authorities, however, considered that the consignment fell within the description "article plated with gold or silver" being item 61(8) on which duty was payable at 78 3/4 per cent. The Assistant Collector of Customs adjudicated the duty on this latter basis and thereafter the respondent having filed an appeal to the Collector of Customs, the levy was upheld by order dated February 22, 1955.

3. Section 191 of the Sea Customs Act enables any person aggrieved by an order of the Collector of Customs to file a revision to the Central Government. The respondent, without resorting to this remedy, filed a writ application in the High Court of Bombay to quash the imposition of the duty at the higher rate (certiorari) and to direct the release of the goods on payment of duty at 30 per cent. (mandamus). The application was resisted by the Collector of Customs, who raised substantially two points : (1) that on the merits the goods imported were "gold-plated articles" notwithstanding their being fountain-pens and that the proper rate of duty was that which had been determined by the Assistant Customs Collector, (2) that the respondent had another remedy open to him, viz., to file a revision to the Central Government and that he was, therefore, disentitled to move the High Court under Art. 226 of the Constitution before availing himself of the remedy specially provided by statute. The writ petition came on for hearing before Justice Tendolkar, who by his order dated July 5, 1955, recorded that on any reasonable construction of the items in the Schedule to the Indian Customs Tariff, fountain-pens did not cease to be fountain-pens because they contained parts which were plated with silver or gold and that so long as they were "fountain-pens complete", subject to any exceptional cases of which this was not one, only duty at 30 per cent. under item 45(3) could be levied. The learned Judge further held that the interpretation that he placed upon item 45(3) in the context of the other entries in the Tariff Schedule can "only be one and it is not reasonably possible for any person to take a contrary view". In other words, the learned Judge was of the opinion that the construction put upon the entry by the Customs authorities was unreasonable or perverse.

4. The objection to the writ petition based upon the petitioner before him not having exhausted the statutory remedies available to him was repelled by the learned Judge on the ground that on the facts the decision to levy duty at 78 3/4 per cent. was without jurisdiction. The petition was, therefore, allowed and the Customs authorities were, by order of Court restrained from enf

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1961 Supreme(SC) 157

The interpretation of the Indian Customs Tariff Schedule items 45(3) and 61(8) and the availability of alternative remedies before seeking a writ of mandamus.

Cases Referred (2)