The Customs authorities have every right to correct their own error in releasing goods under a license, and they can hold an adjudication proceeding to determine whether the goods are really covered by the license.

( 1 ) THIS is an appeal under Cl. 15 of the Letters Patent. The Union of India and the Customs authorities are the appellants before us. The order challenged in this appeal is one dated August 30,1985, passed by a learned single Judge of this Court in a writ proceeding which was registered as C. R. No. 10290 (W)/84. By the order impugned the learned Judge allowed the writ petition of the respondents (hereinafter referred to as the writ petitioners) and directed release of the goods imported by the respondents under a contract dated September 27,1982, on the basis of certain import licenses. The goods directed to be so released are said to be aligning tools (dial indicators ).

( 2 ) THE facts material for our present purpose are not in dispute. The writ petitioners purchased seven REP group of import licenses. REP license is a kind of license granted to an export house for importation of special types of goods for special use in the industry manufacturing the exportable goods. In the present case now before us the concerned licenses purchased by the writ petitioners authorised importation of goods described in A35 Appendix 17 of the Import Policy for 1984 and the description of the goods as set out therein is as follows :"special production aids for electronic industry, namely, wrapping and unwrapping tools, aligning tools, disoldering tools, I. C. extractors. "

( 3 ) ON the authority of the licenses so purchased, on September 27, 1982, the writ petitioners entered into an agreement to purchase and import Mitutoyo Brand Aligning Tools (Dial Indicators) with M/s. Mitutoyo Manufacturing Co. Ltd. , Japan. In terms of the said contract Mitutoyo Manufacturing Co. despatched several consignments of such aligning tools. The writ petitioners presented Bills of Entry to the Customs authorities for assessment of duty and release of the goods. The Customs authorities thought that the goods so imported were not covered by the licenses and hence, refused to release the goods without holding an adjudication proceeding. But before any adjudication proceeding could be taken up, the writ petitioners moved this Court on July 24, 1984, with a writ petition out of which the present appeal arises on a prayer for issue of an appropriate writ for release of the goods by the Customs authorities. In the writ petition the writ petitioners pleaded on the basis of certain certificates issued by certain experts that the goods imported were aligning tools. It was further pleaded that the Customs authorities themselves had earlier allowed importation of self-same instruments on the authority of the same type of REP licenses.

( 4 ) IN contesting the writ petition the Customs authorities filed an opposition. In that opposition they pleaded that the goods imported were precision measuring instruments and not aligning tools used as special production aids for electronic industry. It was further pleaded that such instruments were used for linear measurements. They were graduated in millimeter and used for measurement for the purpose of comparison of linear measurements like thickness, diameter etc. of an article though in some cases such instruments might be adopted for alignment of work piece or work piece fixtures with the aid of special accessories. In this affidavit the Customs authorities admitted that some clearance of similar goods under similar licence was allowed in the past but alleged, without furnishing any particulars, that such clearance was allowed because of wrong informations furnished by the importers to the assessing officers. It was, however, said that it had been decided to review all such cases.

( 5 ) THE Customs authorities filed a supplementary affidavit in support of their original opposition. In this affidavit they disclosed the various proceedings undertaken by them since the filing of the disputed Bills of Entry for release of the imported goods in question. It was pointed out that the matter was placed before an As