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High Court Of Calcutta
A. N. RAY
H.C.L.LTD - Appellant
Versus
UNION OF INDIA - Respondent
Matter 3041 Of 1990
Decided On : 03/06/1992
CUSTOMS - IMPORTATION - COMPONENT PARTS - IMPORT OF COMPONENT PARTS OF PHOTOCOPIER MACHINES - IMPORTATION IN SKD CONDITION - IMPORTATION PERMITTED UNDER LICENCE - IMPORTATION OF WHOLE MACHINES NOT PERMITTED - ASSEMBLING OF COMPONENT PARTS INTO WHOLE MACHINES AFTER IMPORTATION - WHETHER IMPORTATION OF COMPONENT PARTS VIOLATION OF LAW - INTERPRETATION OF IMPORT TRADE CONTROL PROVISIONS - RELEVANCE OF SPIRIT OF FISCAL STATUTE - SCOPE OF JUDICIAL REVIEW - WRIT PETITION.
Fact of the Case:
Petitioner, Hindustan Copiers Ltd. (HCL), imported component parts of photocopier machines in SKD condition under import licences. The Collector of Customs held that the importation of component parts which could be assembled into whole machines was in violation of the Import Trade Control provisions and confiscated the goods under Section 111(d) of the Customs Act, 1962, and imposed a penalty under Section 112(a) of the Act. The petitioner challenged the order of the Collector in a writ petition.
Finding of the Court:
The Court held that the importation of component parts of photocopier machines in SKD condition was not in violation of any law, even though the whole machines could not be imported. The Court observed that there was no law which prohibited the importation of component parts as such, even if the same could be assembled into whole machines. The Court further held that the Collector's interpretation of the Import Trade Control provisions was erroneous and that the Collector had committed an error of law apparent on the face of the record. The Court also held that the writ petition was maintainable even though an alternative remedy of appeal was available, as the issue was a pure matter of law and the facts were not in dispute.
Issues: 1. Whether the importation of component parts of photocopier machines in SKD condition was in violation of the Import Trade Control provisions? 2. Whether the Collector's interpretation of the Import Trade Control provisions was erroneous? 3. Whether the writ petition was maintainable even though an alternative remedy of appeal was available?
Ratio Decidendi: 1. The Court held that the importation of component parts of photocopier machines in SKD condition was not in violation of any law, even though the whole machines could not be imported. The Court observed that there was no law which prohibited the importation of component parts as such, even if the same could be assembled into whole machines. 2. The Court held that the Collector's interpretation of the Import Trade Control provisions was erroneous and that the Collector had committed an error of law apparent on the face of the record. 3. The Court held that the writ petition was maintainable even though an alternative remedy of appeal was available, as the issue was a pure matter of law and the facts were not in dispute.
Final Decision: The Court allowed the writ petition and quashed the Collector's order insofar as it confiscated the goods and imposed a penalty. The Court also directed the discharge of the petitioner from the bonds and bank guarantees furnished pursuant to the interim order passed earlier.
( 1 ) THIS is a case where the facts ultimately resolve to be simple and undisputed, though the money value involved in the subject matter of the litigation is quite large.
( 2 ) THE matter arises in this way-the petitioners, that is, Hindustan Copiers Ltd. , who call themselves H. C. L. Ltd. , produce and sell copying machines. These are at present quite in demand in the market. For the purpose of their business the petitioners brought in consignments relating to 1,400 copier machines of which 1,000 were of the model known as BD-3110 and 400 were of the model BD-5100.
( 3 ) THESE machines were not brought into India as complete machines. They came into the country in a semi-knocked down condition called technically S. K. D. condition. The consignments were received in different ports and different airports. The dates were also naturally different in this regard.
( 4 ) THE petitioner has agreed and conceded before this Court, as it has agreed and conceded before the adjudicating authority, that excepting for the photo-copier drum these separate consignments could be assembled into the complete photo-copying machines of the above description, (of course, without the drums ).
( 5 ) IT is agreed also by the petitioners that the value of the drums in relation to the machines would not exceed roughly 10 per cent of the total machine cost. As such, in my opinion, it has to be assumed for the legal purpose of disposal of the instant application that substantially all the parts of the photo-copier machine were imported by the petitioner in a knocked down or disassembled condition.
( 6 ) THE further admitted position is that the petitioners possess licences on the phased manufacturing programme, known as the PMP basis, by virtue of which they are entitled to import component parts to the extent of roughly 20 per cent of the value of the machines. It is also not in dispute that at the time of importation it was permissible for the petitioners to buy within the country import licence of other individuals and parties if necessary, at a premium, which could be utilised by the petitioner for further importation of parts of the photo-copiers in the SKD condition.
( 7 ) THE next point where parties are ad idem is that the petitioners at no point of time had licenses for importation of the whole copying machines as such. 7a. In this matter an interim order was passed on the 6. 9. 90 by Justice K. M. Yusuf and his Lordship's order was in the following terms :"upon the petitioner paying in cash or bank draft of a sum of 1,24,19,258/- (Rupees one crone twenty four lakhs nineteen thousand two hundred and fifty eight) only being the admitted amount of duty and furnishing a bank guarantee on any nationalised bank in favour of the Collector of Customs, Calcutta, to the tune of Rs. 2,50,00,000/- (Rupees Two Crore fifty lakhs) splitted into six bank guarantee for each consignment @ 200% of the provisionally assessed duty and also furnishing a P. D. Bond for Rs. 34,00,000/- (Rupees Thirty four lakhs) being the balance amount of disputed duty the goods shall be released within a week there from. There shall be an injunction restraining the petitioner company and its servants, agents and assigns from in any way or manner alienating selling or encumbering the petitioner company's immovable properties and assets wherever located, except that this will not prevent the petitioner company from mortgaging or hypothecating the said immovable properties and assets for the purpose of furnishing the bank guarantee in terms of this order, if required. Mr. Dipak Deb and Mr. Pranab Kumar Datta are appointed joint Special Officers for the purpose of preparing an inventory of the company's assets including assets situated in Dehradun at the cost, charges and expenses of the petitioner. Initial remuneration of the Special Officers are fixed at Rs. 5,000/- (Rupees five thousand) each to be paid by the petitioner. This order will however not prevent th
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