- (1.) - This appeal by certificate, arises from the respondents' suit in respect of fines and penalties recovered from them by the Collector of Customs, Bombay for the alleged contravention of Section 3 of the Imports and Exports (Control) Act, 1947 and Section 167 (8) of the Sea Customs Act, 1878.
(2.) The respondents held an import licence dated July10, 1956 permitting them to import parts and accessories of motor cycles and scooters as per appendix XXVI of the import Policy Book for July December 1956. Under the said licence, the respondents imported certain goods which arrived in two consignments, each containing 17 cases, by two different ships. According to the respondents, the goods so imported ,by them were motor cycle parts which their licence authorised them to import. The Customs authorities, on the contrary, held, on examination of the goods, that they constituted 51 sets of "Rixe Mopeds complete in a knocked down condition". The Deputy Collector of Customs thereupon held an enquiry in pursuance of two show cause notices issued by him.
(3.) The result of the enquiry was an order under which the Deputy Collector directed- confiscation of the said goods with an option to the respondents to pay certain sums in lieu of confiscation and also personal penalties. That order was passed on the basis that the goods imported were not parts and amemories of motor cycles and scooters permissible under Entry 295 of the Schedule to the Import Control Order but were motor cycles/scooters in completely knocked down condition, prohibited under remark II against Entry 294, a licence in respect of goods covered by it would authorise import of motor cycles and scooters. The order of the Deputy Collector dated November 19, 1957 reads as under : "On examination of the goods and scrutiny of the documents relating to the Bills of Entry stated above it was ascertained that M/s. Tarachand Gupta and Bros., had imported 51 sets of "Rixe" Mopeds complete (except tyres, tubes and saddles) in a knocked down condition. The total number of consignments covered by the aforesaid two Bills of Entry were sufficient to give exactly 51 sets complete Rixe 'Mopeds' (except for tyres, tubes and saddles which would in any case have required a separate licence). The packing was also such as to show that those were nothing but "Mopeds" in a disassembled condition, since each of the cases contains components relating to three mopeda. Moreover, it was found that major components such as the framers, completely fitted with electrical wires and control cables and grips, had been imported in equal numbers. All these went to show that the goods were not imported as spare parts but as complete vehicles in a knocked down condition. The goods were, therefore considered to be correctly classifiable under Item 75 (2) of the I.C.T, corresponding to S No. 294/IV of the I. T. O. Schedule. The licence under which clearance was sought, could not therefore, be accepted." The Deputy Collector rejected the respondents' contention that the two consignments which arrived in two different ships at different dates should be viewed separately, that the machines were incomplete as they were without tyres, tubes and saddles, and therefore, they could not be said to constitute minor cycles in knoked down condition. He held, on the other hand that though the goods were not in completely knocked down condition it made no difference in the tyres, tubes and saddles were easily obtainable in India and their absence did not prevent the machines being otherwise complete. He also found that there was a trade practice under which traders were supplying motor cycle without tyres, tubes and saddles unless the purchaser specially asked for those parts. According to him, the goods could not be regarded as spare parts but were "Mopeds in disassembled condition.";