Judgment

SHAH, J.:- On March 31, 1959, the Ministry of Commerce and Industry Government of India, granted to the respondents a licence permitting them to import from West Germany certain machinery described therein of the maximum C. I. F. value of Rs. 45,000/-. Condition No. 1 of the licence provided that :

"The x x application is accepted and import licence is hereby granted having quantity and value as the limiting factors and is not valid for clearance if the actual value of any item exceeds the C I.F value indicated in the licence by more than 5% ". The respondents submitted a bill of entry dated July 1, 1960, disclosing the C.I.F. value of the consignment as Rs. 45,179-92 inclusive of landing charges, and cleared the consignment after paying duty assessed by the Customs authorities on the real value of the goods as disclosed in the bill of entry.

2. On June 20, 1961 the Customs authorities issued a notice requiring the respondents to show cause why penal action should not be taken against them under S. 167 (8) of the Sea Customs Act, 1878, as being persons concerned in the unauthorised importation of the goods. This notice was amended by notice dated September 21, 1961, whereby the respondents were charged with having committed offences under S. 167 (8) read with S. 3 (2) of the Imports and Exports (Control) Act, 1947, for illegally importing the machinery. The respondents claimed that no breach of the conditions of the licence was committed. The Additional Collector of Customs, Calcutta, by order dated March 17, 1962, directed confiscation of the machinery under S. 167 (8) of the Sea Customs Act read with S. 3 (2) of the Imports and Exports (Control) Act, 1947, and permitted the respondents to pay a fine of Rs. 20,000/- in lieu of confiscation. A personal penalty of Rs. 25,0001- was also imposed on the respondents.

3. The respondents then moved a petition before the High Court of Calcutta under Art. 226 of the Constitution praying for a writ quashing the adjudication order dated March 17 1962. A Single Judge of the Calcutta High Court dismissed the petition, but in appeal under the Letters Patent the High Court reversed the decision and issued a writ of certiorari quashing the order dated March 17, 1962. The Additional Collector of Customs, Calcutta, has appealed to this Court with certificate granted by the High Court.

4. The only question which falls to be determined is whether for breach of a condition of the licence penalty may be imposed under S. 5 of the Imports and Exports (Control) Act, 1947, read with the Sea Customs Act, 1878.

5. The relevant statutory provisions may first be noticed Under Section 167 of the Sea Customs Act, 1878, the offences mentioned in the first column of the Schedule are punishable to the extent mentioned in the third column of the same with reference to such offences respectively :

Offences. Section of this Act to which offence has reference. Penalties.

8. 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, he imported into or exported from India contrary to such prohibition or restriction; or 18 & 19 such goods shall be liable to be confiscated; and any person concerned in any such offence, shall be liable to A penalty not exceeding three times the value of the goods or not exceeding one thousand rupees.

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Chapter IV of the Sea Customs Act, 1878, contains three sections: Ss. 18, 19 & 19A. By Section 18 an absolute prohibition is imposed in respect of importation of goods by land or by sea specified therein. Section 19 provides that the Central Government may from time to time, by notification in the Official Gazette prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or out of India across any customs frontier as defined by the Central Government.

6. The Central Legislature enacted the Imports and Exports (Control) Act, 1947. With the object of authorising