Judgment

MUKHERJEA, J. :- This appeal with certificate is directed against a judgment dated 26/27 July 1965 of a Division Bench of the High Court of Bombay by which the appellant s appeal from a judgment of a Single Judge of that High Court had been dismissed. The short facts of the case are as follows :

The appellant is the sole proprietor of a firm by the name of New India Corporation and carries on business of importing plantation and agricultural machinery, implements, accessories and spare parts of such machinery. The appellant is also the sole selling agent of a German firm called "Carl Platz". In October, 1956, on the strength of two import licences dated 9 February 1956 and 16 March 1956, the appellant imported from his principals the aforesaid firm of Carl Platz, certain parts of agricultural machinery known as Express Battery Sprayers. The relevant invoice is dated 28 October 1956 and the Bill of Lading is dated 10th November, 1956. The appellant filed his Bill of Entry before the Custom authorities on 3 January 1957. When the goods arrived at the Bombay Port in January, 1957 the Customs authorities, after examining certain samples, gave clearance in respect of the goods on 10 January 1957. The goods consisted on 28 crates and contained, according to the appellant, 220 pieces of spare parts for power driven agricultural machinery. The value declared was Rupees 37,943. Subsequently, it appears, the Customs authorities had some doubts as to whether the goods correctly answered the description of goods for which the appellant had been given an import licence and with the help of search warrants searched the appellant s business premises and seized 10 cases of Express Battery Sprayers, certain ball bearings and certain hose clips. By a memorandum dated 28 December 1957 the appellant was asked to show cause why penal action should not be taken against the appellant under Section 167, Clause (8) of the Sea Customs Act, 1878 read with Section 3 (2) of the Imports and Exports (Control) Act, 1947. Under the same memorandum the appellant was also asked to show cause why penal action should not be taken against him under Section 167 (39) of the Sea Customs Act, 1878 for taking out certain goods without making a due "entry" for them. The memorandum, therefore, contained two charges. We are in this appeal concerned mainly with the charge under Section 167 (8) of the Sea Customs Act 1878. The appellant, in due course, showed cause against the said notice and asked for a personal hearing. He was given a personal hearing by the Assistant Collector of Customs on 21 July 1968.

2. It is better at this stage to set out what are the respective contentions of the appellant and the Customs authorities in this matter. The import licence that was granted to the appellant described the things covered by the licence as "spare parts in power-driven agricultural machinery (parts of sprayers)". Admittedly the import licence is one which relates to Item 74 (vi) of Part V of Schedule I to the Imports (Control) Order (1955) made under the Imports and Exports (Control) Act, 1947. The Schedule will hereafter be briefly referred to as the I. T. C. Schedule. Item 74 (vi) of Part V of that Schedule reads as follows :-

"(vi) Parts of Power-driven agricultural machinery".

The goods that the appellant actually brought were certain liquid containers which were parts of sprayers. According to the appellant, the abovementioned Item 74 (vi) permits all kinds of spare parts of power-driven agricultural machinery. "Spare parts" in this case were intended to be parts of certain sprayers fabricated by Carl Platz and generally described as Express Battery Sprayers. These sprayers, according to the appellant, function normally with the help of Power-driven pumps. Functionally, therefore, what the appellant imported were, according to him, correctly described in the import licence. In other words, the appellant contends that the imports were in terms of the import licence.