- (1.) The Collector of Customs, Madras, has come up, by grant of special leave to appeal, against the judgment of a Division Bench of the Madras High Court quashing an order of the Central Government which confirmed an order of the appellant confiscating a large quantity of sewing machine needles,. The respondent had imported the needles under a licence which did not, according to the case of the Customs Department, cover the goods imported. A learned Single Judge of the High Court had set aside a penalty of Rs. 5,000/- imposed upon the respondent as the sewing needles imported by the petitioner-respondent were not, according to the learned Judge, proved to belong to the prohibited class, but the confiscation order had, rather inconsistently, been maintained. On an appeal by the respondent against the refusal to quash the confiscation order, the Division Bench of the Madras High Court came to the conclusion that there was no prohibition at all as contemplated by S. 3 of the Import Control Order, 1955, made under Sections 3 and 4A of the Imports and Exports (Control) Act, 1947 (hereinafter referred to as 'the Act'), so that no further question need be considered. The Division Bench, therefore, did not go into the other questions raised by the respondent, who was petitioner before the High Court, relating to violation of rules of natural justice or the merits of the case that the sewing needles imported were covered by the licence. It, therefore, held that the confiscation order could not stand and had to be quashed with the penalty.
(2.) The Division Bench was opinion that a prohibition or restriction authorised by the Act should be imposed by a Control Order such as the Control Order of 1955 duly notified in the Official Gazette and not by any other means. It held that the prohibition relied upon the by Customs Department in the instant case did not satisfy this requirement.
(3.) Section 3 of the Act reads as follows: '3. Powers to prohibit or restrict imports and exports. (1) The Central Government may, by order published in the official Gazette, make provisions for prohibiting, restricting or otherwise controlling in all cases or in specified classes of cases, and subject to such exceptions, if any, as may be made by or under the order: (a) the import, export, carriage coastwise or shipment as ships, stores of goods of any specified description: (b) the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which, they are being carried. (2) All goods to which any order under sub-section (1) applies shall be deemed to be goods of which the import or export has been prohibited under Section 11 of the Customs Act, 1962 (52 of 1962), and all the provisions of that Act shall have effect accordingly. (3) Notwithstanding anything contained in the aforesaid Act, the Central Government may, by order published in the Official Gazette, prohibit, restrict or impose conditions on the clearance, whether for home consumption or for shipment abroad of any goods or class of goods imported into India". And clause 3 of the Import Control Order 1955 lays down: "3. Restriction of Import of certain goods.- (1) Save as otherwise provided in this Order, no person shall import any goods of the description specified in Schedule I, except under and in accordance with a licence or customs clearance permit granted to the Central Government or to an officer specified in Schedule II. (2) in any case, it is found that the goods imported under licence do not conform to the description given in the licence or were shipped prior to the date of issue of the licence under which they are claimed to have been imported, then, without prejudice to any action that may be taken against the licensee under the Customs Act, 1962 (52 of 1962). In respect of the said importation, the licence may be treated as having been utilised for importing the said goods". Item 288 of Schedule 1 of the Control Order specifies: "a) parts of sewing machines domestic. b) Needles for domestic sewing machines". The case of the Customs' Department is that the imported sewing machine needles fall under this description. The contention is that, as they were duly notified, no question of any failure to impose a prohibition in accordance with the provisions of the Act arose.;