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