Collector of the Customs and others Vs. Shamsur Rahman, 31 DLR (AD) (1979) 60

Case No: Civil Appeal No. 80 of 1977

Judge: Ruhul Islam,

Court: Appellate Division ,,

Advocate: Mr. Altaf Hussain,Mr. Sultan Hossain Khan,,

Citation: 31 DLR (AD) (1979) 60

Case Year: 1979

Appellant: Collector of the Customs

Respondent: Shamsur Rahman

Subject: Income Tax, Fiscal Law,

Delivery Date: 1978-2-22

 
Supreme Court
Appellate Division
(Civil)
 
Present:
Kemaluddin Hossain, CJ.
Fazl Munim, J.
Ruhul Islam, J.
 
Controller of the Customs and ors
……….Appellants
Vs.
Shamsur Rahman
…………..Respondent
 
Judgment
February 22. 1978.
 
Customs Act (VIII of 1876)
Section 167 (8)(b)
In violation of the permit giving the licence holder authority to import various items of goods of different description for setting up a cold storage and ice plant mentioning the amount   as against each item to be imported when the importer imported two items for Rs. 219,000/- whereas under the licence-permit the amount allocated for import of these items was Rs. 6000/- the licence-holder was guilty under section 167 (8)(b) and the confiscation of these items valid in law.
 
Lawyers Involved:
Sultan Hossain Khan, Deputy Attorney-General, instructed by A.W. Mullick, Advocate-on- Record—For the Appellant.
Altaf Hossain, Advocate instructed by Abdur Rab-II, Advocate-on-Record—For the Respondent.
 
Civil Appeal No. 80 of 1977
(An ap­peal from the judgment and order dated May 27, 1970 passed by the High Court in Writ Petition No. 315 of 1967)
 
JUDGMENT
Ruhul Islam, J.
 
This appeal by special leave arises out of a judgment of a Bench of the Dacca High Court in Writ Petition No. 315 of 1967.
 
Leave was granted to examine the question as to whether the respondent after having obtained from the Chief Controller of Imports and Exports a permit to import complete units of Cold Storage and Ice Plants as well as G.I. pipes and G.P. sheets of the value of Rs. 2,26,000.00 committed any offence under section 167(8) of the Sea Customs Act by importing G.I. pipes G.P. sheets only of the total value of Rs. 2,19,000/-.
 
2. Facts necessary for disposal of this appeal may be stated thus: the respondent who has been carrying on business under the name and style of Kaptai Cold Storage and Fishing Industry Ltd., with a view to set up a Cold Storage Plant applied for and obtained a permit for importing complete units of Cold Storage and Ice Plant. In further clarifica­tion of the licence it was mentioned item-wise cold storage machinery including com­pressor, electric motor wires, cables and ac­cessories, ice plant air conditioner, G.I. pipes copper pipes, G.P. Sheets, Cork Breaks, water pump, cooling condenser, Air Cooling unit of more than 3 tons and deep freezers, The licence was specifically issued under the head 'Industrial Consumer'. Further condi­tion of the licence was that the goods im­ported must not be utilised for any purpose other than industrial consumption by the licencee. On the basis of this permit the res­pondent imported only G.P sheets and G.I. pipes of the approximate value of Rs. 2,19,00,000 and none of the other items mentioned in the licence, necessary for setting up cold storage and ice plants. On arrival of the goods the Customs Authorities pro­secuted the respondent for an offence under section 167(8)(b) of the Sea Customs Act on the allegation that although the permit was given for importing goods of the value of Rs. 2,56,000/- mainly for the import of capi­tal machinery to set up Cold Storage and Ice Plant, the respondent imported G.P. sheets and G.I. pipes of the total value of Rs. 2,19,000/- leaving hardly any margin for the importation of the machinery for the Cold Storage and Ice Plant. It was further alleged that according to the specifications supplied G.P. sheets and G.I. pipes could not exceed of the value of Rs. 6,000/-. The respondent was asked to show cause as to why penal action under section 167(8) (b) of the Sea Customs Act should not be taken against him. The respondent showed cause. The Customs Authority, however, convicted him on the said charge and the goods of each of the three consignments were ordered to be confiscated. The respondent by filing a writ petition in the Dacca High Court being Peti­tion No, 315 of 1967 challenged the legality of the Order Nos. 463, 728 and 877 dated July 7, 1965, September 22, 1965 and Novem­ber 17, 1965 respectively passed by the Collector of Customs, Custom House, Chittagong.
 
3. The appellants contested the said writ petition by filing an affidavit-in-opposition contending, inter alia, that Industrial licences are issued to Industrial Consumers on the recommendation of the Director of Indus­tries for importation of industrial goods for use in the particular industry and in the ins­tant case, the Director of Industries and the licensing authority categorically stated that the G.P. sheets, G.I. Pipes beyond Rs. 6,000.00 were not at all required by the Cold Storage and Ice Plant and this was a clear ease of misuse of industrial licence for other purposes than for setting up of an industry; and requested the Customs Authorities not to release the goods. It was stated that penal actions taken by the Customs Authorities were justified and the same were in accor­dance with law. It was further stated that show cause notices were duly issued to the respondent before adjudication but the respondent did not avail of the opportunity It was asserted that respondent by importing, huge quantity of G.I. pipes and G.P. sheets not necessary for setting up the proposed Cold Storage and Ice Plants, abused the in­dustrial licence granted to him.
 
4. The learned Judges of the High Court took the view that in the absence of any restriction as to the valus of G.I. pipes and G.P. sheets in the permit to be imported, the res­pondent did not commit any offence under section 167(8) (b) of the Sea Customs Act and the conviction and penalty imposed by the Collector of Customs were illegal. This appeal arises from that order.
 
5. Mr. Sultan Hossain Khan, the learned Deputy Attorney-General appearing for the appellants submits that the learned Judges of the High Court were wrong in not holding, in the facts and circumstances of the case that there was an implied condition attached to the permit that it authorised import of G.P. sheets and G.I. pipes not exceeding the quantity of the value of Rs. 6000.00 and 4000.00 in value neces­sary for setting up the plants; and this led to an erroneous conclusion that the respondent did not commit any offence under section 167(8)(b) of the Sea Customs Act. The learned Deputy Attorney General further submits that although the facts of the case clearly showed that the res­pondent misused the permit by importing G.I. pipes and G.P. sheets of the value of Rs.2,19,000/- leaving hardly any margin for the import of capital machinery to set up the proposed plants, but relying merely on the technicality, that is, permit was issued without mentioning any limitation as to the value of the G. I. pipes and G.P. sheets to be imported, the learned judges held that the respondent did not commit any offence under section 167(8) (b) of the Sea Customs Act by importing G.I. pipe and G.P. sheets of the value of Rs.2,19,000.00.
 
6. on perusal of the judgment of the High Court it appears that the learned judge arrived at the findings that the facts as alleged against the defendant by the customs authorities did not make out an offence under section 167(8) (b) of the Sea Customs Act and the learned Judge observed as follows:
 
“it is not denied that the permit entitle the petitioner to import G.I. pipes and G.I. sheets and the permit did not mention any limitation in regard to the value of the several items mentioned in the permit that could be legally imported by the petitioner. The prosecution of the petitioner appears to be the result of an apprehension on the part of the authorities concerned that the G.I. pipes and G.P. sheets will not be used for the purposes of which they have been imported and the prosecution has relied upon some report of the Director of industries to the effect that an industrial consumer of the present kind could not import G.I pipes of a value exceeding Rs. 4000.00 and G.P. sheets of a value exceeding Rs. 6000.00. The Respondent in their affidavit have not given any indication as to the legality of any such ceiling if it ever existed.”
 
The Learned Judge further observed:-
 
“the respondents have failed to produce before us any order either under section 3 of the Imports and Exports (Control) Act (XXXIX of 1950) or under section 19 of the Sea Customs Act that prohibits or puts any restriction upon the importation of G.I. pipes and G.P. sheets which is alleged to have been contravened by the petitioner. On the contrary, as we have said earlier, the permit issued by the Chief Controller of Imports and Exports specially permitted the petitioner to import, among other goods, G.I. pipes and G.P. sheets without any restriction as the their value. That being so, the petitioner has not committed any offence under section 167 (8) (b) of the Sea Customs Act and his conviction and penalty there under is therefore illegal.”
 
7. Mr. Altaf Hossain, learned counsel appearing for the respondent submits in support of the view taken by the High Court that the respondent could not be penalized for importing G.P. sheets and G.I pipes on the allegation of violating implied condition attached to the permit issue din his favour, in the absence of any specific limitation mentioned therein. The learned Counsel further submits that in the absence of any specific restriction put in the permit itself, it was wrongly held by the Collector of Customs that the respondent misused the permit by importing G.P. sheets and G.I. pipes of the value of Rs. 2,19,000.00. According the the learne Councel the learned Judge correctly accepted the contention of the respondent that in the absence of any specific restriction as to the value of G.I. pipes and G.P. sheets to be imported, the respondent could not be penalized for importing the said items even if the value of Rs. 2,19,000.00, inasmuch as ythe imports not being unauthorized, the respondent did not commit any offence under section 167(8)(b) of the Sea Customs Act.
 
8. We have given our anxious consideration to the facts of the case to find out out as to what was the purpose of issuing the permit. The permit was issued on the application of the respondent under the heads ‘Industrial Consumer’ with one of the conditions being that the goods imported must not be utilized for any purpose other that the industrial consumption by the licencee. In the licence item wise it was mentioned that it authorised the permit holder to import Cold Storage Machinery including compressor, electric motor wires, cables and accessories, ice plant, air conditioner, G.I. pipes, copper pipes, G.P. sheets, cork breaks, deep freezer, etc. It was clearly established by the authorities that the respondent under no circumstance 'was entitled on the authority of the said industrial licence to import G.P. sheets and G.I. pipes of the value of Rs. 2,19,000/- for the purpose of setting up the proposed Cold Storage and Ice Plants as recommended by the Director of Industries. It was categorically stated by the Director of Industries and the Licencing Authority that G.P. sheets and G.I. Pipes ex­ceeding the value of Rs. 6,000/- each were not at all required for the Cold Storage and Ice plants. This being a clear case of misuse of Industrial Licence, the Customs Authority was justified, after giving due opportunity to the respondent to explain his case, in taking the penal action by virtue of section 183 of the Sea Customs Act read with section 3(3) of the . Import Trade Control Act.
 
9. We are constrained to hold that the learned Judges unnecessarily put emphasis on the mere technicality as pointed out by the respondent in support of his contention which is not at all tenable in the facts and circums­tances of the case, than on the broad facts which clearly showed that the respondent violated the conditions of the permit, to bring the case within the ambit of section 167(8)(b) of the Sea Customs Act. In our opinion, the learned Judges were not justified in declaring, the Order Nos. 463, 728 and 877 dated July 7, 1965, September 22, 1965 and November 17, 1965 respectively passed by the .Collector of Customs, Chittagong, to have been passed without lawful authority and of no legal effect.
 
In the result, the appeal is allowed and the order appealed against is set aside. We direct the writ to be recalled.
 
We make no order as to costs.
 
Ed.