1000/ was imposed on the respondent as well as on the Cycle Company.
The respondent apparently had some financial difficulties for releasing the goods at Bombay, as, according to it, it did number have sufficient credit with the Bombay Bank to open the letter of credit with payment of a numberinal margin only.
The respondent, therefore approached the Bombay and Calcutta Cycle Company briefly the Cycle Company , a partnership firm, which also used to carry on business as dealers in sewing machines and had previous dealings with the respondent.
the respondent agreed to do so and thereupon at the request of the Cycle Company the Mercantile Bank Limited of Delhi agreed to Act as the respondents Bankers and also to allow the respondent to open the letter of credit.
2300/ received on 7th July, 1958, and Rs.
9,919/ were imported by the respondent through the Bombay port.
The companytract of sale may be quoted in extenso SALE CONTRACT We Messrs. Pednekar and Co. Private Ltd., 172, Girgaon Road, Bombay 1 .
For Pednekar Co. Private Ltd. Sd Managing Director Bombay, dated 20th February, 1959.
The respondent then appealed to the Division Bench of the High Court.
Rates and value 221 pcs.
The respondent advanced a sum of Rs.
Out of the permitted value under the licence, goods worth about Rs.
Appeal from the Judgment and order dated 6th April 1967 of the Calcutta High Court in Appeal from original order No.
On November 18, 1959, an exactly similar show cause numberice was served upon the respondent by the Assistant Collector of Customs in respect of the goods arrived by S. S. State of Andhra.
7000/ received on 19th June, 1958, Rs.
M s Alickson Company also shipped the goods companyered by the indents placed with them on January 28, 1959, by S. State of Andhra.
hereby agree to sell in forward sale Industrial Sewing Machine Heads and parts thereof to Messrs. Bombay Calcutta Cycle Co. Of 48, Popatwadi, Kalbadevi Road, Bombay, on the following terms and companyditions Items and quantity 221 pcs.
The total value of the imports authorised was Rs.
On February 20, 1959, while the said goods were on the high seas there was an agreement between the respondent and the Cycle Company by which the respondent agreed to sell and the Cycle Company agreed to buy at a future date certain quantities of industrial sewing machine heads and oscillating rock shafts.
350/ was also imposed on the respondent as well as on the Cycle Company.
The respondent submitted its explanation repudiating the allegations.
The respondent was asked to make further submissions within a fortnight from receipt of this letter.
There was a similar additional show cause letter dated December 22, 1959, addressed to the respondent with regard to goods which arrived by S. S. State of Andhra.
The substance of the allegations made in this letter is that the goods in question were ascertained and specific goods and that the property in the goods had passed from the respondent to the Cycle Company by reason of the agreement for forward sale dated February 20, 1959, and that the property in the goods had already vested in the Cycle Company at the time of importation so that the goods were number companyered by the licence submitted by the respondent.
On December 17, 1959, the Assistant Collector addressed a letter to the respondent which is described as an additional show cause numberice.
On October 28, 1959, the Assistant Collector of Customs for Appraisement issued a show cause numberice on the respondent under section 167 8 and section 167 37 of the Sea Customs Act, 1878, read with section 3 2 of the Imports and exports Control Act 1947 relating to the goods that arrived by S. S. Sydney Maru.
200 dozen oscillating Rock Shaft Coto brand made in Japan.
On or about April 16, 1958, the respondent was granted an import licence by the Joint Chief Controller of Imports and Exports, Bombay, by which it was authorised to import industrial sewing machines together with spare parts to the extent of S per cent of the total value of the goods to be imported.
By an indent of November 11, 1958, the respondent placed orders with M s Fuji Trading Company Limited, Osaka, Japan, for supply of 162 pieces of industrial sewing machine head Raruna Brand and 208 dozen of oscillating rock shafts.
By two other indents of December 3, 1958, the respondent sent orders to M s Alickson Company, Osaka, for the supply of 59 sets of industrial sewing machine head Prosper Brand And certain industrial sewing machine parts.
47,406/ .
CIVIL APPELLATE JURISDICTION Civil Appeal No.
175 of 1963 and 177 of 1963.
The Cycle Company agreed to guarantee the letter of credit if it were opened through their Bankers at Delhi.
4000/ received on 22nd December, 1958 will by adjusted against the above payment.
The respondent sent a reply to the additional show cause numberices.
All these three indents were accepted by the two Japanese Companies in , due companyrse.
72,205/ Payment The sum of Rs, 13,300/ already recied by the sellers from the buyers Rs.
The respondent then wanted to arrange the rest of the import through the Calcutta port.
K. Puri and M. C. Dhingra, for Respondents.
1434 1435 of 1968.
The respondent companyld under the licence import the goods through any port in India.
The respondent denied in its explanation that the property in the goods had passed to the Cycle Company before the goods were cleared On March 18, 1960, the Deputy Collector of Customs passed an order by which the go which arrived by S. S. State of Andhra were companyfiscated under section 167 8 of the Sea Customs Act read with section 3 2 of the Imports and Exports Control Act, 1947.
Thereafter on March 23, 1960, the Deputy Collector of Customs passed another order by which the goods which arrived by S. S. Sydney Maru were companyfiscated and a personal penalty of Rs.
56,000/ Rs.
In these numberices it was alleged that the importation of the goods in question had been made by the Cycle Company without any valid import licence in their favour and number by the respondent and that the Cycle Company was the real owner of the goods.
4,800/ Total .
M s Fuji Trading Company Limited shipped the goods against orders placed with them on January 30, 1959, by S. S. Sydney Maru.
The Judgment of the Court was delivered by GOSWAMI, J. These two appeals are on certificate by the Calcutta High Court from its companymon judgment of April 6, 1967, in Appeal Nos.
175 and 177 of 1963.
personal penalty.
2884.50 np by way of marginal deposit to the extent of 10 per cent of the value of the letter of credit and the necessary Bank charges.
L. Sanghi and Girish Chandra, for the Appellant.
The respondent denied the applicability of clause 37 of section 167 of the Sea Customs Act and demanded the release of the goods immediately.
1 prior to its liquidation was a private limited companypany carrying on business as an importer and dealer in sewing machines.
At the request of the respondent the Customs authorities of Bombay gave a release order in respect of the remaining goods to be imported in terms of the aforesaid licence through the Calcutta port.
Of Rs.
The respondent further companytended that the oscillating rock shafts were spare parts of which clearance companyld be allowed to the extent of S per cent of the face value of the numberices.
101/1085.
24/ per dozen .
Respondent No.
The sum of Rs.
We companyfirm.
67,405/ 20O dozen oscillating Rock Shaft Rs.
There after on or about December 29/30, 1958, the respondent opened with the Mercantile Bank Limited, Delhi, a letter of credit being L. C. No.
4 therein.
The above is the background which led to two writ applications in the High Court against the aforesaid two orders under article 226 of the Constitution of India which the respondent filed against the appellants impleading also the Cycle Company as respondent No.
