ROCHE PRODUCTS LIMITED versus COLLECTOR OF CUSTOMS AND ANOTHER

Citation: [1989] SUPP. 1 S.C.R. 495 · Decided: 19-10-1989 · Supreme Court of India · Bench: M.M. DUTT · Disposal: Dismissed

Judgment (excerpt)

ROCHE PRODUCTS LIMITED 
v. 
COLLECTOR OF CUSTOMS AND ANOTHER 
OCTOBER 19, 1989 
[MURARI MOHON DUTT ANDS. RATNAVEL 
PANDIAN, JJ.] 
Customs Act, 1962: Sections 122, 
124, 128-Collector of 
Customs setting aside order of Customs Officer-Ordering confiscation 
. and imposing penalty-Held appellant has right of appeal against such 
order. 
Actual user m'ust not be debarred from utilising the imported 
material under its industriallicence. 
A 
B 
c 
Administrative Law: Authority has power to do.a certain act-
Does the act but refers to wrong provisions of :law--'such order mere 
D 
irregularity and would not vitiate such act . . 
The appellant is engaged in the business of mannfacture of 
various pharmaceutical prodncts inclnding sulpbarnetboxazole which is 
also known as 'SMX'. One of the important ingredients or raw· 
materials for the manufacture of SMX is a chemical known as 
E 
'isOxamine'. 
On April 23, 197 4 the Ministry of Industrial Development of the 
Government of India issued to the appellant an industrial iicence enabl· 
ing it to manufacture 18 tonnes of SMX-per year. Under one of ttie 
conditions of the industrial licence, the appellant was permitted to 
F 
import the material, isoxamine, for a period of two years only from the 
date of licence, and thereafter the product SMX was to be manufac-
tnred from indigenous materials. The appellant's request for permis-
sion to import isoxamine till the middle of 1979 was not acceded to by 
the Government and the appellant was asked to manufacture SMX 
from indigenous materials. In tbe meantime, tbe appellant bad placed orders 
G 
for the imprt of isoxarnine under an import licence issued on October 
13, 1976, and between March and June .1979 got the goods cleared after 
giving a declaration that the appellant was an Actual User, and that its 
registration bad not been cancelled or withdrawn or otherwise made 
inoperative. 
495 
H 
A 
B 
c 
D 
E 
F 
G 
496 
SUPREME COURT REPORTS 
[1989] Supp. 1 S.C.R. 
The Collector of Customs, Bombay, issued show-cause notice on 
the appellant for confiscation of goods and imposition of penalty, inter 
alia, on the ground that it had made a false statement that its registra-
tion had not been cancelled, withdrawn or otherwise made inoperative 
for the manufacture of SMX by using imported material, that is, 
isoxamine, inasmuch as-the industrial licence bad ceased to be valid for 
the manufacture of SMX with imported material after April 22, 1976. 
The Collector of Customs, after hearing the appellant, held that 
the appellant was not an Actual User (Industrial) in respect of the said 
imported raw material, isoxamine, after April 22, 1976, and that since 
the industrial licence was in~alid for manufacture of SMX with 
imported material the importation of the raw material, namely, isox-
amine, was impermissible. The Collector also held that the appellant 
had furnished a false declaration on the basis of which it got the goods 
cleared by the Custom Officer. The Collector, therefore, set aside the 
decision of the Custom Officer allowing clearance of the goods. The 
Collector of Customs further directed confiscation of the goods 
imported by the appellant and also imposed a penalty. "I:he appellant's 
writ petition was dismissed_ by the learned Single Judge of the High 
Court, and appeal agianst his judgment was dismissed by the Division 
Bench. 
Before this Court it was contended on behalf of the appellant thai 
the goods, namely, isoxamine, having been imported under a valid 
Open General Licence (OGL), the customs authorities bad no jurisdic-
tion to confiscate the same; that the appellant having secured the OGL 
for the import of isoxamine for its own use and not for business or trade 
in it, the appellant should be held to be an Actual User; that the Col-
lector of Customs could not, in exercise of his revisional jurisdiction 
under section 130(2) of the Customs Act, 1962, as it stood then, for the 
first time confiscate the goods and impose penalty on the appellant; and 
that as the goods have been comiscated and the penalty bas been 
imposed by the Collector of Customs in exercise of bis revisional juris-
diction, the appellant has been deprived of his right to prefer an appeal 
before the Central Board of Excise and Customs under Section 128(a) of 
the Customs Act. 
While dismissing the appeal, this Court, 
HELD: (1) There can be po doubt that the definition of" Actual 
User (Industrial)", as contained in clause (3) of pargr

Excerpt shown. Read the full judgment & AI analysis in Lexace.