CAMAC LEATHER (P) LTD. v. UNION OF INDIA — 1992 DIGILAW 24 (CAL)

A. N. RAY, J. ( 1 ) THE Court: These two applications are taken up together. The matter is about a claim for customs duty benefit claimed by the writ petitioners because of a certain Notification bearing No. 224/85/cus. The relevant part of the said notification is set out below: -"exemption to specified goods imported for use in leather industry. In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column (2) of the Table hereto annexed, when imported into India for use in the leather industry, from - (a) So much of that portion of the duty of customs leviable thereon which is specified in the First Schedule to the Custom Tariff Act, 1975 (51 of 1975), as is in excess of the amount calculated at the rate of forty per cent ad valorem; and (b) the whole of the additional duty leviable thereon under section 3 of the second mentioned Act. TABLE SI. No. Description of goods 1. Penetrators. 2. Felt sleeves. 3. Stamping foils. ( 2 ) THERE are 24 items for exemption given under the aforesaid table head "description of goods", but it is not necessary to set out the same as the benefit is claimed only for stamping foils. ( 3 ) THE case of the writ petitioner is that stamping foils were imported from Germany by various manufacturers engaged in the leather industry and that show-cause notices were issued to all for the purpose of claiming full duty and for the purpose of removing those imported consignments from the beneficial purview of the aforesaid notification. As the show-cause notices were served to various importers, the usual procedure of cyclostyling a form was adopted on the part of the respondents and the differences in detail as to the different importers were filled in as applicable. I do not find anything wrong with the employment of cyclostyled notice as it has not been shown before me that any filling of the blanks with regard to the writ petitioner was either wrong in law or made pursuant to any non-application of mind. ( 4 ) LEARNED counsel for the writ petitioners has produced before me a yet unreported judgment delivered by Mr. ( 4 ) LEARNED counsel for the writ petitioners has produced before me a yet unreported judgment delivered by Mr. Justice Nirendra Krishna Mitra on 12th April, 1991 in Matter No. 2358 of 1990 being Shawkat Kamal v. The Collector of Customs and Ors. ( 5 ) IN the aforesaid order, Justice Mitra has disposed of the case of Shawkat Kamal by permitting the adoption of the procedure of end-use bonds, in the sense that bonds are to be furnished for assuring that the end-use of these imported consignments would be in the leather industry and upon confirmation of such end-use being actually demonstrated to have been in the leather industry, the bond would stand discharged. ( 6 ) THE order in the last portion of Justice Mitra's judgment is set out hereinbelow: -"accordingly, the impugned show cause notice (Annexure-'i') stands quashed and I hold that the Customs authorities at the time of release of the imported goods as claimed in the instant case, will not insist on the condition for production of the manufacturer's catalogue/literature regarding the use of the imported stamping foils in leather industry but the writ petitioner will have to produce the end-use bonds and other necessary bonds as to the actual consumption of such stamping foils in the leather industry to the satisfaction of the Customs authorities and he will also produce certificate of the consumption of the imported stamping foils in the leather industry to be verified by the Central Excise Authority and/or any other authority concerned. " ( 7 ) IN the matter of the present writ petitioners an interim order was passed by Justice Susanta Chatterji on 2nd July, 1990 to the following effect :"having heard Mr. Chatterjee for the petitioner and Mr. Sengupta for the State Respondents, it is directed that the matter will come up as an application six weeks hence. In the meantime, the petitioner will file reply to the show cause notice a fortnight from date and the respondents will pass necessary orders upon giving an opportunity of hearing to the petitioner and dispose of the matter by a reasoned order and the said order will be placed before this Court for further adjudication of the matters in dispute. The respondents will not, however, take any steps pursuant to the order of adjudication without the leave of this Court. The respondents will not, however, take any steps pursuant to the order of adjudication without the leave of this Court. This Court will consider the release of the goods on the next date of hearing. All parties to act on a signed copy of the minutes of this order on the usual undertaking. " ( 8 ) PURSUANT to the said order, the Collector of Customs has in fact heard the matter and passed an order. A photostat copy of the order produced on the part of the respondents, has been looked into by this Court and I direct that the said copy be countersigned by the Court Officer and kept on the records of these two writ matters. ( 9 ) THE ordering portion of the said order of the Collector of Customs is as follows: -"having regard to the facts and circumstances of the case, stamping foils (Luxor Special Alufin PVC) valued at Rs. 2,09,391. 30 are ordered to be confiscated under section 111 (d) of C. A. 62. The importer is however given an option to redeem the goods on payment of a fine of Rs. 1,25,000. 00 within one month of receipt of this order. It is further held that the goods (Luxor Special Alufin PVC) will not be eligible for the benefit of exemption under notification 224/85-Cus dated 9. 7. 85. I also order that goods of the specification "colorit-V" shall be released allowing the benefit of Notfn. No. 224-85-Cus against OGL. " ( 10 ) LEARNED Counsel for the respondents has stated that a remedy by way of an appeal to the Customs Excise and Gold Control Appellate Tribunal is available to the writ petitioners in case they are aggrieved by the order of the Additional Collector of Customs which has been produced before me as aforesaid. It is the case of the respondents that all grievances can be agitated in appeal and as such, at this stage, no order is called for in favour of the writ petitioners. ( 11 ) IN the exercise of a writ jurisdiction several factors are to be assessed by the writ Court. There is sometime a factor of delay; there is sometime a factor of availability of an alternative remedy, there is sometime a factor of the Court having to enter into disputed questions of facts. ( 11 ) IN the exercise of a writ jurisdiction several factors are to be assessed by the writ Court. There is sometime a factor of delay; there is sometime a factor of availability of an alternative remedy, there is sometime a factor of the Court having to enter into disputed questions of facts. These factors, no doubt, generally weigh against the writ petitioner, in that a delayed writ petition or a writ petition with an alternative remedy possible or a writ petition with disputed questions of facts are ordinarily not entertained. There is however no inflexible rule that in case of any particular delay like the delay involved in a Suit regarding limitation, a writ application will have to be dismissed. In a writ matter the circumstances have to be weighed and the judicial discretion has to be used with a much greater flexibility than in suit. ( 12 ) TAKE the case of disputed questions of fact. Ordinarily they are not entertained but sometimes they are when the justice of the case calls for such an adjudication and interference. An age dispute of a service holder often gives rise to the Writ Court being compelled to enter into facts in some way or the other. ( 13 ) THE existence of an alternative remedy is similarly a factor to be considered for disposal of writs but the existence of an alternative remedy is not an absolute bar. An order without jurisdiction, an order passed in breach of constitutional mandates, an order passed in violation of the rules of natural justice, an order passed perversely and an order passed by non-consideration of material facts are all orders which might be subject to the alternative remedy of an appeal. But if these aforesaid administrative or constitutional defects are manifest then the order is set aside in a writ application even though the writ petitioner has not first exhausted the alternative remedy by way of an appeal. ( 14 ) IN the instant matter the ordering portion of the Additional Collector of Customs states that the goods of the specification "colorit V" shall be released but that the goods of the specification "luxor Special Alufin PVC" shall not qualify for the exemption notification quoted above. ( 15 ) THERE is no question of the writ petitioners not being engaged in leather trade. ( 15 ) THERE is no question of the writ petitioners not being engaged in leather trade. The order of the Additional Collector proceeds on the basis that the "colorit V" materials would be released to the writ petitioner and that order could not have been passed in case there was any doubt about the writ petitioner not being engaged in leather trade at all. ( 16 ) THE point is how the show cause notice and the order into which the show cause notice has now merged are today to be dealt with regard to the other materials being "luxor Special Alufin PVC". ( 17 ) THE materials that have been relied upon in the aforesaid order of the Additional Collector are also annexed to the writ petition. The invoices have been relied upon and the manufacturer's literature has been relied upon to determine whether the imported goods were intended for use in the leather industry. ( 18 ) I am of the opinion that though the procedure of an end pairs user bond might be a practical procedure in solving the disputes, yet in law, the question of assessment of customs duty must be finalised at the time and point of entry into India. Suppose certain goods are imported which are intended for use in leather industry and call for exemption under the aforesaid notification. Suppose also that these goods after importation and entry are destroyed and are not ultimately used in the leather industry. It cannot be anybody's case that under those circumstances the exemption would vanish or that the authorities would be entitled to call for additional duty because the goods have not actually been used for leather industry. The authorities would have to assess, therefore, at the point of entry and at the time of entry whether these goods are for use in the leather industry or not. It is that assessment that has been sought to be made by the Additional Collector of Customs pursuant to the show cause notice challenged in this writ. It is that assessment which is in effect impugned before me by way of materials appearing in the writ petition and by way of original challenges made to the show cause notice. It is that assessment that has been sought to be made by the Additional Collector of Customs pursuant to the show cause notice challenged in this writ. It is that assessment which is in effect impugned before me by way of materials appearing in the writ petition and by way of original challenges made to the show cause notice. ( 19 ) NO affidavits have been filed in this matter on the part of the respondent authorities but the order of the Additional Collector has been produced by them, ( 20 ) THE Court is not to substitute its own judgment as to whether the imported consignments were imported for use in leather industry; the Court itself only peruses an order passed and sees if all relevant materials were taken into account and also sees if there are any glaring findings in the order which point to the inescapable conclusion that relevant and important matters were, though apparently before the authorities, yet not appreciated at all. Though in a criminal matter, yet, the Supreme Court has not used the word 'perverse' in the context of Courts overlooking and ignoring glaring infirmities (Mathura Prashad, AIR 1992 SC 49 at para 17 at p. 53 ). ( 21 ) IN the instant case I am afraid that various relevant matters have either not been considered by the Additional Collector or in the alternative the importance of the same has not been appreciated to any degree at all. These factors, if true, would render the decision invalid. ( 22 ) THE finding in the order is as follows: - "it is observed from the invoice that the imported goods are "luxor Special Alufin PVC" and "colorit V". "luxor Special Alufin PVC" are not indicated for use in leather industry as per catalogue. It is observed that PVC grade is intended for use "for soft PVC coated materials and rigid plastics. " ( 23 ) AS aforesaid, the goods under specification 'colorit V" have been released. This appears to be a result which is not explained by any express supporting reason. ( 24 ) THERE are, however, four important factors which persuade me to hold that the order must be struck down. ( 25 ) THE first of these factors is that the invoice in these matters categorically states that the goods are most suitable for use in leather industry. ( 24 ) THERE are, however, four important factors which persuade me to hold that the order must be struck down. ( 25 ) THE first of these factors is that the invoice in these matters categorically states that the goods are most suitable for use in leather industry. Why the manufacturer's declaration in the invoice should not be relied upon at all is not even considered in the order dated 19th February, 1991. That would make the order liable to attack on the ground of it having been passed without consideration of relevant material. ( 26 ) THE next point of importance is that in the manufacturer's catalogue, it gas been stated (in page 40 of the writ petition in Matter No. 2746 of 1990), that the Luxor and Alufin foils are utilised on a wide scale in nearly all industries and that the coloured lacquer is supplied on a polyester carrier. The ordering authority did not at all consider whether the description PVC in the total description of Luxor Special Alufin PVC did have any connection with the letters PVC being referable to the starrier as polyester. In a writ jurisdiction I do not enter into the question whether PVC is referable to the carrier polyester or whether PVC is referable to the alufin foils being utilisable in PVC industries rather than in leather industry. But in the writ jurisdiction I do have to enter into the question as to whether this most relevant point was at all considered by the deciding authority before affecting the writ petitioners' legal rights. I find that this matter has not been considered at all and that it has been assumed without consideration of this argument that the goods are not meant for use in leather industry. ( 27 ) THE third factor is that the onus in the matter has been sought to be put upon the writ petitioners and it has been assumed by the authorities that they would have to satisfy the authorities that the goods are for use in leather industry. As a matter of law the question of onus loses all importance when materials are brought before any deciding authority whatever the status of the deciding authority might be. As a matter of law the question of onus loses all importance when materials are brought before any deciding authority whatever the status of the deciding authority might be. On an application of the deciding mind to the materials in hand a decision has to be reached, whether, on the materials available, the issue is to be answered in favour of the applicant or against the applicant. It was incumbent upon the deciding authority to apply its mind to the invoice, to the entirety of the circumstances, and to the manufacturer's invoice, and come to the conclusion either that the goods were for use in the leather industry or that they were for some other use, say, in some industry other than leather industry. It would not be permissible in law for the authority merely to state that the onus of the writ petitioner has not been discharged and therefore the goods do not come within the purview of the notification. There is no ending that the goods are intended for any other use or for use in any industry other than leather industry. In fact, when one goes through the records no other competing industry seems to be in the picture at all. This is the third legal point on which I would venture to hold that the writ petition should succeed. ( 28 ) LASTLY it has been pointed out that the manufacturer's catalogue mentions as suitable for use in leather industry several specification numbers as would appear from page 45 of the annexures to the writ petition in Matter No. 2746. Several of these numbers tally with the numbers mentioned in the show cause notice itself at page 37 of the aforesaid writ. Practically all the other numbers are to be found categorised as suitable for book binding in the manufacturer's catalogue. The deciding authority has given no reason why the specification numbers actually mentioned as suitable for leather industry were not being imported by the writ petitioner for use in their leather industry. Nor is any decision given that the specification numbers mentioned as suitable for book binding cannot be used for the leather industry because of any particular technical problem in the matter. The mind of the deciding authority was not addressed to the details at all. Nor is any decision given that the specification numbers mentioned as suitable for book binding cannot be used for the leather industry because of any particular technical problem in the matter. The mind of the deciding authority was not addressed to the details at all. By reason of such non-application of mind to these necessary details, the decision in the matter becomes liable to attack. ( 29 ) THE fear of the authorities appears to be that the imported materials would not be used for leather industry but would be sold on to other consumers. Unfortunately the citizen's rights cannot be affected on mere suspicion, surmise or conjecture. The writ petitioners are not shown to be guilty of any attempted sale to outside parties of any of their imported goods. The writ petitioners make out a bona fide case for use of the materials in leather industry and have obtained release of part goods with exemption granted under the aforesaid notification. Under those circumstances the order disallowing exemption for the other goods, for the reasons above, appears to be bad in law and must accordingly be quashed. ( 30 ) BOTH these writs accordingly succeed. The order dated 19th February, 1991 was directed not to be acted upon as per the interim order of Justice Chatterji; today the reliefs in the writ would have to be properly moulded in view of the said order having already been passed, as I have said before, and the show cause notice having merged in the said order. Accordingly there will be a writ absolute in the nature of certiorari quashing the two show cause notices in these two matters, copies whereof are annexed respectively at pages 33 and 36 in the petitions in Matter Nos. 2745 and 2746 of 1990. There shall also be a writ absolute in the nature of certiorari quashing the order of the Additional Collector of Customs Grade-2, Customs House, Calcutta dated 19th February, 1991 passed in the matter of the writ petitioners. The writ petitioners shall be entitled to obtain clearance of the consignments in question upon payment of customs duty in accordance with the aforesaid exemption notification if the same has not already been paid. Upon the writ petitioners' arranging to obtain release after payment of storage charges, if any, the authorities shall release the goods to the writ petitioners within course 4 weeks from date. Upon the writ petitioners' arranging to obtain release after payment of storage charges, if any, the authorities shall release the goods to the writ petitioners within course 4 weeks from date. There will be no order as to costs. Writ Petitions allowed.