Back
High Court Of Calcutta
A.K. Sengupta, J.
Opal Exports Pvt. Ltd. : Appellant
Versus
Collector Of Customs : Respondent
Matter 109 Of 1988
Decided On : March 01,1991
CUSTOMS - Importation of spares of measuring instruments - Classification - Customs duty - Equal protection - Promissory estoppel - Show cause notice - Validity.
Fact of the Case:
The petitioner, an export house, imported spare parts for combination square sets, vernier height gauges, and micrometers under a subsidiary license. The Customs authorities refused to clear the goods, claiming that they constituted complete measuring instruments and were liable to higher customs duty. The petitioner challenged the show cause notice issued by the Customs authorities.
Finding of the Court:
The Court held that the goods imported by the petitioner were spares and not complete measuring instruments. It found that the Customs authorities had allowed similar imports in the past on the basis that they were spares and had levied customs duty accordingly. The Court also held that the Customs authorities were estopped from contending that the imports in question were not to be treated as spares but as complete measuring instruments.
Issues: 1. Whether the goods imported by the petitioner were spares or complete measuring instruments. 2. Whether the Customs authorities had discriminated against the petitioner by treating similar imports differently. 3. Whether the Customs authorities were estopped from contending that the imports in question were not to be treated as spares. 4. Whether the show cause notice issued by the Customs authorities was valid.
Ratio Decidendi: 1. The mere fact that the spares, when combined together, constituted complete measuring instruments did not mean that the petitioner intended to import complete measuring instruments. 2. The Customs authorities had discriminated against the petitioner by treating similar imports differently. 3. The Customs authorities were estopped from contending that the imports in question were not to be treated as spares, as they had made a categorical representation and/or promise to the petitioner that they would allow import of similar goods in future on the same basis. 4. The show cause notice issued by the Customs authorities was without or in excess of jurisdiction, as the underlying assumption in respect of the said show cause notice was that there had been a misdeclaration of the subject goods.
Final Decision: The Court allowed the writ petition, quashed the show cause notice and the proceedings initiated in pursuance thereof, and directed the respondents to allow clearance of the subject goods upon assessment by the respondents and upon payment of duty on the basis that the same are spares.
Ajit K. Sengupta, J.
1. IN this application under Article 226 of the Constitution the petitioners have challenged the validity and legality of the purported show cause notice dated 13th November, 1987 issued by the respondents as also their actions in refusing to allow the petitioners to clear the consignments in question imported from foreign suppliers.
2. THE petitioner No. 1 (hereinafter called the Company) is a registered Export House and is engaged, inter alia, in the importation of various commodities. The company was the holder of Import Licence No. P/W/3141848/C/XX/98/C/80 subsidiary dated 18th March, 1986 which was issued to the company on prior export basis and against the main licence No. P/W/3141610/C dated 26th December, 1985. By this subsidiary licence the company was authorised to import spares as permissible under paragraph 265(6) of the Import and Export Policy for 1985 to 1988.
The company imported two consignments, one containing spare parts for combination square sets, vernier height guages, micrometers etc. and the other containing spares of measuring instruments of diverse amounts from the same foreign suppliers viz. Messrs. Mitutoyo Manufacturing Co. Ltd., Japan by virtue of the aforesaid subsidiary licence. Both the consignments were shipped from Yokohama per "JANIKA" Rotation No. 502/87, Line Nos. 100 and 103 and the same arrived at the Port of Calcutta on or about 15th September, 1987.
3. THEREAFTER Bills of Entry were presented for assessment of Customs duty by the Clearing Agents for clearance of the subject goods against the aforesaid licence. The Customs authorities however, refused to clear the goods on the plea that the Shed Appraiser was directed to open the cases of the two consignments covered by the two Bills of Entry for appraisement and to examine them side by side and ascertain if the goods imported under these two Bills of Entry make for complete micrometers/ combination square sets/vernier height gauges. The said Appraiser allegedly opened the case for appraisement and after an examination of the two consignments came to the purported conclusion that the goods included under the two Bills of Entry made for complete micrometers/combination square sets/vernier height gauges.
4. THEREAFTER the Assistant Collector of Customs, Dock Intelligence Unit, issued a Show Cause Notice dated 13th November, 1987 which is under challenge in this application.
It is necessary to set out the said show cause notice dated 13th November, 1987.
"Sub: Importation of 2 cases said to contain spares of measuring instruments per vessel JANIKA, Rot. No. 502/87 Line No. 100 and 103, CIF Value Rs. 1,17,271.11 and Rs. 86,302.22 respectively, imported by M/s. Opal Exports Pvt. Ltd., 4, Little Russel Street, Calcutta-71."
M/s. Opal Exports Pvt. Ltd. submitted two Bills of Entry serial No. 949 dated 18-8-1987 and serial No. 1680 dt. 27-8-1987 for above mentioned consignments through Clearing Agent M/s. United Traders and sought its clearance under additional licence No. P/W/ 3141848/C/XX/98/C/86 dated 18-3-1986 under para 265(6) of the policy which allows permissible spares only. Goods of both the Bills of Entry were examined side by side on the 23-9-1987. On examination it is seen that putting together both the consignments goods are complete measuring instruments which are Micrometers (133 pcs.) combination square sets (123 pcs.) and vernier height gauges (26 pcs.). One consignment contains only the missing parts of other. It is also seen that the goods are complete with specialised Mitutoyo brand wooden instrument Box and instructional manual. Nos. of instrument boxes are exactly equal to the complete instruments. The licence submitted by the importer covers only spares under para 265(6) of the Import Policy 1985-88. On examination, the goods are found as complete measuring instruments and not spares for the measuring instruments putting together both the consignments. The measuring instruments are specifically
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
