UNION OF INDIA & ORS, versus SECURITY AND FINANCE (P) LTD.

Citation: [1976] 2 S.C.R. 87 · Decided: 06-10-1975 · Supreme Court of India · Bench: V.R. KRISHNA IYER · Disposal: Appeal(s) allowed
Cited by 1 judgment(s) · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

·' 
.l.,. 
• 
J 
87 
UNION OF INDIA & ORS, 
A 
v. 
SECURITY AND FINANCE (P) LTD. 
. 
October 6, 1975 
[V. R. KRISHNA IYER AND A. C. GUPTA, JJ.) 
Import controls-Power to determine the head or Entry under wlzich any 
particular commodity falls under sections 3 (2) and 4 of the Import and Export 
B 
(Control) Act (1947) read with section 167 (entry 8) of the Sea Customs Act 
(Act Vlf[) 1878. 
Sea Customs Act (Act Vlll)-Sections 20, 167, 183 & 184-Whether an 
appropriate orde.r under section 183 precludes the authorities from levying duty 
under section 20-----lnterpretation of two penal provisions of the import laws and 
powers of the nut/writies. 
The respondent company imported au.to cycle parts under the guise of motor 
vehicle parts, for which only he had a valid licence under the Import laws. 
In respect of certain consignments of imports from U.K .. the customs authorities 
by a single order dt. 14-11-1955 passed the following: 
(i) act;ng under. section 167(8) of the Customs Act it gave an option to 
the respondent to pay fine in lieu of confiscation of the goods under section 182 
and (ii) acting under se:tions 183 and 20 of the Customs Act to pay the 
differential duty between auto parts and the motor parts. 
T,he respondent· chaJlenged this order before the High Court on the ground 
that once the power under section 183 has been exercised the authorities had 
no further power to levy the differential duty. 
The High Court while quashing 
the order imposing penalty in lieu of confiscation directed payment of the impcrt 
duty ordinarily leviable for the auto cycle pedals imported. Against this view 
of the limitation on the powers of the Collector, the Union came by way of 
special leave, while allowing the appeal the Court, 
HELD : (i) It is primarily for the Import Control Authority to determine 
the liead or entry under which any particular commodity falls. 
Of course if a 
construction adopted by the authority regarding the concerned entry were per-
verse, or grossly irratior.al, then the Court could or would undoubtedly interfere. 
[88 C-D]. 
"Ganga Setty's case. A.LR. 1963 S.C. 1319. followed". 
(ii) The scheme of the Sea Customs Act reveals that Import/export duty is 
an obliga,tion/ cast by section 20 of the Act. It is a tax. not a penalty; it is an 
innocent levy once the exigible event 'Occurs; it is not a punitive import for a 
contravention of the law. 
Confiscation, penalty and fine provided for under 
ss. 167 (Item 8) and 183 are of the species of punishment for violation of the 
scheme of prohibition and control. [89 GJ. 
(iii) Two legal consequences followed the importation of pedals, uncovei-ed 
by a!lY licence viz. (1) the importation attracted duty which any importer. li:it 
or illicit, had to pay the moment cus•.:ims barrier was crossed and (ii'> the 
commission of the offence of importing pedals without a licence trapping the 
respondent in the coils of S. 167, entry 8 inviting the jurisdiction of the autho-
rities to exercise their powers under ss. 182 or 183. [89 H, 90 A]. 
(iv) The order dual in character, although clubbed t;>gether in a single 
document is valid and it does not preclude the au.thorities levying duty under 
section 20, since obligation under section 20 is independent of the liability u/s 
183. 
Non-felicitous and inept expressions used in the order are perhaps apt 
to mislead, but the intendment is clear that what was done, was not confiscation 
but giving an option to pay a quantified fine in place of confiscation. 
Th~ 
order was a composite one, and is quite legal. [90 D, 91 B-DJ. 
7-L1276SCI/75 
c 
D 
E 
F 
G 
H 
A 
B 
c 
D 
E 
F 
G 
88 
SUPREME COURT REPORTS 
[1976] 2 S.C.R. 
Collector of customs v. H. S. Mehra A).R. 1964 Mad. 504; Shewpujanrai 
111drasanrai Ltd. v. The Collector of Customs, [1959] S.C.R. 821 referred to. 
CIVIL APPELLATE JuR1so1cnoN: Civil Appeal No. 897 of 1968. 
Appeal by Special Leave from the Judgment & Order dated the 
24th July, 1967 of the Delhi High Court in LP.A. No. 54 of 1967. 
G. L. Sanghi and Girish Chandra for the Appellants. 
S. S. Javali (Amiras Cariae) for the Respondent. 
The Judgment of the Court was delivered by 
KRISHKA ]YER, J. The respondent imported Auto ·cycle Pedals 
under the guise of motor vehicle parts for which he had secured the 
relevant licence. 
These two articles are different from the point of 
view of the law controlling imports. 
As laid down in Ganga Setty's 
case( 1) by the Court, it is primarily for the Impo
Excerpt shown. Read the full judgment & AI analysis in Lexace.