S. RAMACHANDRA IYER, C.J. :- This appeal which is filed under Clause 15 of the Letters Patent against the judgment of Veeraswami, J., raises an important question under the Sea Customs Act, 1878. The respondent obtained from the Joint Controller of Imports at Madras on 4-2-1960 a licence under the Import and Export Control Act, 1947, for the import from foreign countries ten thousand yards of velvet Fents as per the Import Policy Book, that is, cotton velvets, the value thereof being limited to Rupees 31,275/- (c. i. f. price). He imported in February 1960 a quantity of 899 yards. In December of the same year a second consignment arrived by S. S. State of Madras. The respondent filed a bill of entry declaring that the quantity imported and to be cleared was 9,111 yards and that the value of it was Rs. 28,501/-, both conforming to the limits imposed by the licence. The Customs Authorities found that the goods imported were artificial silk velvet, different from cotton velvet, the import of which alone was permitted under the terms of the licence; also that they were not cut to shape in accordance with the terms of the licence. There was also an error in regard to the value declared the actual value of the goods was found to be Rs. 43,697-37 nP., which was in excess of the limit imposed by the licence.

Thus there had been three matters on which the respondent was found to have contravened the law : (i) importing a class of goods different in quality and shape from that permitted (ii) a misdeclaration of the value of goods worth RS. 43,697-37 nP. as Rs. 28,501/- and (iii) consequent under-valuation which resulted in the loss to the Government of duty relative to that amount, that is Rs. 15,232-58 nP. 2. The Collector of Customs was prepared to take a lenient view of the first of the breaches, mentioned above, as similar goods were allowed to be imported on the previous occasion, and for the further reason that under the conditions of the licence the respondent had only to re-export the goods. But in regard to the other two transgressions, he passed an order bearing date 24-3-1961 and directed :

"In respect of the excess over the amount of the Release Advice (licence) and misdeclaration of value respectively, I order that the goods valued at Rs. 15,232-58 (i.e. the value and quantity not covered by the licence) be confiscated under Section 167(8) Sea Customs Act read with Section 3(2) of the Imports and Exports (Control) Act, 1947 (as amended) and that the whole consignment be confiscated under Section 167(37), Sea Customs Act.

"I give the importers an option under Sec. 183 of the Sea Customs Act to clear the goods for home consumption on payment of a fine of Rs. 16,800/-(Rupees sixteen thousand eight hundred only) in lieu of confiscation under Sec. 167(8) Sea Customs Act and ort payment of a fine of Rs. 7,600/- (Rupees seven thousand sis hundred only) in lieu of confiscation under Section 167(37), Sea Customs Act. . . "

3. The respondent accepted that order and demanded permission to clear the goods on payment of the fine imposed. But the Customs Authorities declined to accede to the request unless the duty payable on the goods was also paid. This led to the respondents two applications under Article 226 of the Constitution to this Court (1) for the issue of a writ of certiorari to quash the order of confiscation as it was passed on an erroneous estimate of the value of goods imported and (2) for the issue of a writ of mandamus directing the Collector of Customs to release the goods on payment of the fine but without payment of duty.

4. Veeraswami, J., rejected the former application on the ground that the value of goods as ascertained by the Customs Authorities had not been shown to be wrong. But the learned Judge holding that there could be no imposition of duty on goods which had been confiscated and released on payment of penalty in lieu of confiscation, directed the authorities, to release the goods on payment of the fin