{"id":110898,"date":"1965-07-27T00:00:00","date_gmt":"1965-07-26T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/m-g-abrol-vs-ms-shantilal-chhotalal-co-on-27-july-1965"},"modified":"2017-09-04T08:39:03","modified_gmt":"2017-09-04T03:09:03","slug":"m-g-abrol-vs-ms-shantilal-chhotalal-co-on-27-july-1965","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/m-g-abrol-vs-ms-shantilal-chhotalal-co-on-27-july-1965","title":{"rendered":"M. G. Abrol vs M\/S. Shantilal Chhotalal &amp; Co on 27 July, 1965"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">M. G. Abrol vs M\/S. Shantilal Chhotalal &amp; Co on 27 July, 1965<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1965 AIR  197, \t\t  1966 SCR  (1) 284<\/div>\n<div class=\"doc_author\">Author: K Subbarao<\/div>\n<div class=\"doc_bench\">Bench: Subbarao, K.<\/div>\n<pre>           PETITIONER:\nM. G. ABROL\n\n\tVs.\n\nRESPONDENT:\nM\/S.  SHANTILAL CHHOTALAL &amp; CO.\n\nDATE OF JUDGMENT:\n27\/07\/1965\n\nBENCH:\nSUBBARAO, K.\nBENCH:\nSUBBARAO, K.\nDAYAL, RAGHUBAR\nBACHAWAT, R.S.\n\nCITATION:\n 1965 AIR  197\t\t  1966 SCR  (1) 284\n\n\nACT:\nImports\t and  Exports (Control) Act, 1947 (13 of  1947),  s.\n3(1)  and (2)-Exports (Control) Order, 1954-The Sea  Customs\nAct,  1878 (Ss. 19, 167(8) and 178-Scrap of iron and  steel-\nProhibition   on  export  without  licence-Jurisdiction\t  of\nCustoms authorities to see whether goods in accordance\twith\nlicence-Licence for 'steel skull scrap' whether\t description\nof   particular\t  variety   relevant   for    exportability-\nJurisdiction of courts to interfere with decision of customs\nauthorities.\n\n\n\nHEADNOTE:\nIn  exercise  of the power given in s. 3 of the\t Import\t and\nExport\t(Control) Act, 1947, the Central  Government  issued\nthe  Exports (Control) Order, 1954 providing that no  person\nshall  export  any  goods of the  description  specified  in\nSchedule  I annexed thereto except under and  in  accordance\nwith  a licence granted by the Central Government or by\t any\nofficer\t specified in Schedule 11 of the order.\t  Under\t the\nprovisions of the said order the respondents who were a firm\ncarrying  on import and export business, obtained  from\t the\nIron  and  Steel  Controller a licence\tpermitting  them  to\nexport a certain quantity of 'steel skull scrap'.  When\t the\ngoods  were  at the port they were examined  by\t an  officer\nauthorised  by\tthe Controller who certified  the  goods  as\n'steel\tskull  scrap' fit for export under the\tsaid  export\nlicence.  The Customs authorities however took the view that\na  part of the goods was not 'steel skull scrap'.  S. 3\t (2)\nof  the\t Imports and Exports Act 1947, provides\t that  goods\nwhose export or import is prohibited restricted or otherwise\ncontrolled  under s. 3(1) would be deemed to be goods  whose\nexport\twas restricted under s. 19 of the Sea  Customs\tAct,\n1878,  and  all the provisions of the said Act\twould  apply\naccordingly.   Under  s.  178 of the  Sea  Customs  Act\t the\nCustoms\t authorities ordered the confiscation of  the  scrap\nsought to be exported by the respondents, but allowed it  to\nbe  shipped on the respondents' giving a bank guarantee\t for\npayment\t of  fine in lieu of confiscation.  After  giving  a\nshow  cause  notice  the  Additional  Collector\t of  Customs\nimposed\t a fine on the respondents in lieu  of\tconfiscation\nand  also  a  personal penalty of Rs.  35,000.\t Instead  of\nseeking\t remedy\t under the Sea Customs Act  the\t respondents\nfiled  a writ petition in the High Court.  It was heard\t and\ndismissed by a single Judge who however reduced the personal\npenalty\t to Rs. 1,000.\tBoth sides appealed to the  Division\nBench.\t It  was held by the Division Bench that  since\t the\nsatisfaction as to whether a particular consignment of scrap\nis capable of being used in India or not is to be, under the\nStatement  of  Export  Policy,\tthat of\t the  Iron  &amp;  Steel\nController  the\t Customs authorities were  not\tentitled  to\nconsider afresh whether that scrap was or was not usable  in\nIndia.\tOn this and other grounds the High Court allowed the\nappeal\tof the respondents and dismissed the appeal  of\t the\nCustoms Authorities in respect of the penalty.\tThe  Customs\nAuthorities appealed to this Court by special leave.\nIt  was contended on behalf of the appellants that  (1)\t the\nCustoms\t Authorities were entitled to see whether the  goods\nsought\tto be exported were in accordance with the  licence,\nand  (2)  the  High  Court should  not\thave  exercised\t its\njurisdiction  under Art. 226 when alternative remedies\twere\nprovided in the Sea Act.\n\t\t\t   2 8 5\nHELD:(i) There is no conflict between the  jurisdiction\nof the licensing authority under the Exports (Control) Order\nand that of the Customs Authority under the Sea Customs Act.\nWhile under the Exports (Control) Order certain articles can\nbe  exported only under a licence issued by the\t appropriate\nauthority  prescribed  thereunder, the\tappropriate  Customs\nauthority can prevent the export of the articles if they are\nnot  covered by such licence.  To take an extreme  case,  if\nthe licence issued permitted export of iron and the licensee\nseeks to export gold, the Customs authorities can  certainly\nprevent\t the  export of gold, for it is not covered  by\t the\nlicense. [291 C-D]\n(ii)However  in the present case it could not be said  that\nthe goods were not covered by the licence.\nUnder  the Exports (Control) Order iron and steel  scrap  is\npermitted  to be exported on a licence granted by  the\tIron\nand Steel Controller.  Under the Statement of Export  Policy\niron  and  steel  scrap other than  sheet  cuttings  can  be\nexported if in the opinion of the Iron and Steel  Controller\nthe  material is of no use in India.  The Exports  (Control)\nOrder,\tthe schedules annexed thereto and the  Statement  of\nExport\tLicensing Policy do not define skull scrap  at\tall;\n'skull\tscrap' is what the Officer thinks it is.   The\tonly\nrestriction on the Controller giving a licence for export of\nscrap is that in his opinion it is not usable in India;\t his\nopinion\t is  final.  For the purpose of his opinion  he\t may\ndescribe or categorize the scrap in the manner convenient to\nhim; but that does not make it anytheless exportable  scrap.\nThe  licence  is  meant only to cover scrap  not  usable  in\nIndia.\tThe description of the scrap has no relevance to its\nexportability. [292 B-F]\nA comparative study of other items in Schedule 1 annexed  to\nthe  Exports (Control) Order shows that they  are  different\nitems.\t Obviously  the licensee cannot export\ta  different\nitem.\tBut  scrap is only one item and, therefore,  if\t the\nappropriate authority issues a licence for the export of one\nvariety of the same, it cannot be held that The licensee  by\nexporting a different variety is exporting some other  item.\n[292 G]\nIn  the present case the Iron and Steel Controller  and\t his\nsubordinates examined the goods at the time the licence\t was\nissued and at the time of loading the goods for export.\t The\nlicence was therefore issued in respect of particular  goods\nidentified  by\tthe  appropriate authorities.\tIt  was\t not\npossible  therefore  to say that goods other than  those  in\nrespect\t whereof  the licence was issued were sought  to  be\nexported. [293 A-B]\nWhat  is important is not the description but whether it  is\nscrap  of iron and steel in respect whereof the licence\t was\nissued.\t  In  this  view, the  Customs\tAuthorities  had  no\njurisdiction to confiscate the scrap on the ground that\t the\nsame was a misdescription.  The conclusion arrived at by the\nHigh Court was therefore correct. [293 C-E]\n(iii)If\t the  goods  were  not\tprohibited  goods,  the\nCustoms\t Authorities  had  no  jurisdiction  to\t impose\t the\npenalty. [293 E-F]\n(iv)The\t existence of an alternative remedy does  not  oust\nthe jurisdiction of the High Court but it is only one of the\ncircumstances\tthat   the   High  Court   may\t take\tinto\nconsideration  in exercising its discretionary\tjurisdiction\nunder Art. 226 of the Constitution.  In the present case the\nHigh  Court  thought fit to exercise  its  jurisdiction\t and\nthere  were no exceptional circumstances that would  justify\ninterference with its discretion. [293 G-H]\nPer  Raghubar Dayal, J. :-(i) The decision of the  Iron\t and\nSteel  Controller  contemplated\t by the\t conditions  of\t the\nlicence is not about the identity of the scrap material\t but\nis  only with respect to the possibility of the use  of\t any\nportion\t of the scrap within the country.  There is  nothing\nin  the\t Imports and Exports Control Act or in\tthe  Exports\nControl Order up.\nSup. CI\/65-4\n286\nwhich  lays  down  among  the duties of\t the  Iron  &amp;  Steel\nController the duty to check that the material collected  at\nthe docks for export tallied with the material for export of\nwhich the licence had been granted. [297 B-C]\n(ii)The statement of export licencing policy in laying down\nthat  export of ferrous scrap other than sheet\tcuttings  is\nallowed\t by  the Iron and Steel Controller  provided  he  is\nsatisfied  that the material is of no use in India does\t not\nmean that if the licence is for the export of any particular\ntype  of  steel\t scrap it may still be considered  to  be  a\nlicence\t permitting export of steel scrap of any other\tkind\nexcept scrap from sheet cuttings.  The Statement meant\tonly\nthat  in respect of such scrap the authorities were free  to\nexercise  discretion to allow its export if it could not  be\nutilised in India. [298 G-H]\n(iii)The  fact\tthat  in the Order iron\t and  steel  is\nmentioned  as one item and its varieties are  not  mentioned\ndoes not mean that a licence for one kind of scrap could  be\nutilised  to export other kinds of scrap.  Clause 5  of\t the\nOrder  empowers\t the  licensing authority  to  impose  while\ngranting a licence such conditions as it considers necessary\nto  impose  and be not inconsistent with the Act  or  Order.\nThe  licensing\tauthority  could therefore  provide  in\t the\nlicence\t that steel scrap of a particular variety  would  be\nexported.  The exported goods will be in accordance with the\nlicence only if they come within the specified variety. [300\nD-E]\n(iv)The\t note  of  the Iron and\t Steel\tController  on\tthe\nshipping bill after inspection of the goods at the dock does\nnot  amount to a licence.  Moreover in the present case\t the\ngoods  were not inspected by the Iron and  Steel  Controller\nhimself\t but by an officer who was not entitled to  issue  a\nlicence\t under Schedule 11.  The certification of the  goods\nby such an officer did not make them exportable. [301 G]\n(v)Section  3(2)  of  the Exports Control  Act\tmakes  the\nprovisions  of the Sea Customs Act applicable in respect  of\ngoods  whose export or import is prohibited,  restricted  or\ncontrolled  by\tan  order made under s.\t 3(1).\t The  Export\nControl\t Order\twas  made under s. 3(1)\t and  therefore\t the\nCustoms\t Authorities could exercise their powers  under\t the\nSea  Customs  Act  in  respect of the  goods  sought  to  be\nexported  by the respondents.  They had power to  check\t the\ngoods  to see whether they were being exported under and  in\naccordance with the licence. [294 F-G; 300 F]\n(vi)Since the Additional Collector of Customs acted  within\nhis  jurisdiction in checking and confiscating the goods  in\nquestion  on  the  ground that they were  not  'steel  skull\nscrap'\twhich  alone was allowed to be\texported  under\t the\nlicence, the High Court or the Supreme Court did not have in\nexercising  writ jurisdiction, power to question, when\tmala\nfides  was not alleged, his opinion about the nature of\t the\ngoods  sought to be exported.  The respondents\tshould\thave\npursued the remedies under the Act. [300 G-H]\n(vii)The  amount of penalty imposed by\tthe  Additional\nCollector  was legal and its reduction to Rs. 1,000  by\t the\nsingle Judge was not correct. [303 D]\n<a href=\"\/doc\/631918\/\">Ranchoddas  Atmaram v. Union of India,<\/a> [1961] 3 S.C.R.\t718,\nrelied on.\n\n\n\nJUDGMENT:\n<\/pre>\n<p>CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 276,\t377,<br \/>\n584-625 and 669 of 1963.\n<\/p>\n<p>Appeals by special leave from the judgment and order,  dated<br \/>\nSeptember 12, 1960 of the Bombay High Court in Appeals\tNos.\n<\/p>\n<p>53.  56. 57 and 54, 51 and 58 of 1959 respectively.\n<\/p>\n<p><span class=\"hidden_text\">\t\t\t    287<\/span><\/p>\n<p>Niren  De,  Addl.  Solicitor-General, D. R. Prem and  R.  N.<br \/>\nSachthey,  for the appellants (in C.As. Nos. 376 and 377  of<br \/>\n1963).\n<\/p>\n<p>D.R.  Prem,  and R. N. Sachthey, for the  appellants  (in<br \/>\nC.As. Nos. 584, 625 and 669 of 1963).\n<\/p>\n<p>S.T.  Desai, J. B. Dadachanji, O. C. Mathur and\t Ravinder<br \/>\nNarain,\t for the respondents (in C.As. Nos. 376 and  377  of<br \/>\n1963).\n<\/p>\n<p>Poras A. Mehta, J. B. Dadachanji, O. C. Mathur and  Ravinder<br \/>\nNarain,\t for the respondents (in C.As. Nos. 584 and  625  of<br \/>\n1963).\n<\/p>\n<p>The Judgment of Subba Rao and Bachawat, JJ. was delivered by<br \/>\nSubba  Rao,  J. Raghubar Dayal, J.  delivered  a  dissenting<br \/>\nOpinion.\n<\/p>\n<p>Subba Rao, J. These five appeals by special leave were filed<br \/>\nagainst the orders of a Division Bench of the High Court  of<br \/>\nJudicature  at\tBombay setting aside the order of  a  single<br \/>\nJudge  of  that Court quashing the order of  the  Additional<br \/>\nCollector   of\tCustoms,  Bombay,  levying  fines   on\t the<br \/>\nrespondents in lieu of confiscation of consignments of scrap<br \/>\niron  exported\tto  foreign countries.\tAs  the\t main  point<br \/>\nraised in all the appeals is the same, it would be enough if<br \/>\nwe  state the relevant facts in one of the appeals,  namely,<br \/>\nCivil  Appeal  No.  376\t of  1963,  arising  out,  of  Misc.<br \/>\nPetition No. 86 of 1958.\n<\/p>\n<p>Messrs.\t  Shantilal Chhotalal &amp; Co., hereinafter called\t the<br \/>\nfirm,, are a firm of Importers and Exporters of scrap  iron.<br \/>\nThe said&#8217; firm obtained an export licence dated November  7,<br \/>\n1956, from the Iron and Steel Controller permitting them  to<br \/>\nexport from the port of Bombay 900 long tons of steel  skull<br \/>\nscrap.\t The licence was to hold good up to March 31,  1957,<br \/>\nand   the  goods  had  to  be  shipped\tto  Japan  by\ts.s.<br \/>\n&#8220;KUIBISHEV&#8221;.   Between October 1956 and March 1957 the\tfirm<br \/>\npurchased  scrap iron from various sources at rates  varying<br \/>\nfrom  Rs.  95 to Rs. 207 per ton.  After  they\tbrought\t the<br \/>\ngoods to the docks, the Officer authorized, by the Iron\t and<br \/>\nSteel  Controller  and the representative  of  the  Regional<br \/>\nJoint  Scrap  Committee certified the goods as\tsteel  skull<br \/>\nscrap  fit for export under the said export licence and\t the<br \/>\nnecessary  endorsements\t to  that effect were  made  on\t the<br \/>\nshipping  bills in respect of the said\tgoods.\t Thereafter,<br \/>\nthe  goods  were taken to the customs  authorities  for\t the<br \/>\npurpose of exporting the same.\tThe customs authorities took<br \/>\nthe view that a part of the goods was not steel skull scrap;<br \/>\nand   the  matter  was\treferred  to  the  Iron\t and   Steel<br \/>\nController.   By  his order dated March 18, 1957,  the\tsaid<br \/>\nController   informed  the  customs  authorities  that\t the<br \/>\nrejected<br \/>\n<span class=\"hidden_text\">288<\/span><br \/>\nbuffers,  plungers  and\t casings were  furnace\trejects\t and<br \/>\nformed\tpart of skull scrap etc.  By order dated  March\t 26,<br \/>\n1957,  the  customs authorities seized the entire  goods  on<br \/>\nboard the ship under s. 178 of the Sea Customs Act; but\t the<br \/>\nsaid  authorities  allowed  the\t goods\tto  remain  in\t the<br \/>\ntemporary custody of the shippers and permitted the ship  to<br \/>\nsail.\tThey  also retained the documents  relating  to\t the<br \/>\ngoods, but later on released them on April 25, 1957, on\t the<br \/>\nfirm furnishing a bank guarantee for a sum of Rs.  49,995.75<br \/>\nfor  payment  of  fine\tin  lieu  of  confiscation  if\tsuch<br \/>\nconfiscation  was ultimately adjudged by them.\tOn  May\t 27,<br \/>\n1957, the customs authorities served a notice upon the\tfirm<br \/>\nto  show cause why the said goods should not be\t confiscated<br \/>\nand  penal  action taken against them under s. 167  (8)\t and<br \/>\n(37)  of the &#8216;Sea Customs Act.\tBy his order dated  December<br \/>\n21,  1957, the Additional Collector of Customs held that  of<br \/>\nthe  total quantity shipped 320 tons were  unauthorized\t and<br \/>\ndirected confiscation thereof; but he imposed a fine of\t Rs.<br \/>\n49,995.95 in lieu of confiscation and a personal penalty  of<br \/>\nRs.  35,000.   On  March  4, 1958, the\tfirm  filed  a\twrit<br \/>\npetition  under\t Art. 226 of the Constitution  in  the\tHigh<br \/>\nCourt  of Bombay for quashing the said order.  To that\twrit<br \/>\npetition  the Additional Collector of Customs,\tBombay,\t and<br \/>\nthe  Union  of\tIndia  were  made  parties.   In  the  first<br \/>\ninstance, the said petition was heard by Shelat, J., of that<br \/>\nCourt,\twho  held  in effect that  the\tfirm  was  exporting<br \/>\nsomething  which was not permitted to be exported  and\tthat<br \/>\nwhile  the  licence authorized them to\texport\tsteel  skull<br \/>\nscrap  they were exporting non-skull scrap  and,  therefore,<br \/>\nthe customs authorities had acted within their\tjurisdiction<br \/>\nin  confiscating  the  said goods and  imposing\t a  personal<br \/>\npenalty\t on the firm.  The learned Judge also expressed\t the<br \/>\nview that the firm had suppressed certain relevant facts and<br \/>\nthus  disentitled  themselves  to  have\t the   discretionary<br \/>\nremedy.\t However, the learned Judge gave a limited relief by<br \/>\nreducing  the  penalty\tof Rs. 35,000 to Rs.  1,000  on\t the<br \/>\nground\tthat  under  s. 167(8) of the Sea  Customs  Act\t the<br \/>\nmaximum\t penalty leviable could not exceed Rs.\t1,000.\t The<br \/>\nfirm preferred Appeal No. 53 of 1959 against that order to a<br \/>\nDivision  Bench\t of  the  said\tCourt;\tand  the  Additional<br \/>\nCollector  of Customs and the Union of India also  preferred<br \/>\nan  appeal,  being Appeal No. 56 of 1959, against  the\tsaid<br \/>\norder of the single Judge raising the question of penalty in<br \/>\nso far as it went against them.\n<\/p>\n<p>The  appeals came up for hearing before a Division Bench  of<br \/>\nthe  High  Court,  consisting  of  Mudholkar,  Acting  Chief<br \/>\nJustice,,  and\tS. M. Shah, J. The learned  Judges  held  in<br \/>\nfavour\tof  the firm mainly on the following grounds  :\t (1)<br \/>\n&#8220;Since the satisfaction<br \/>\n289,<br \/>\nas  to whether a particular consignment of scrap is  capable<br \/>\nof being used in India or not is to be, under the  Statement<br \/>\nof export policy, that of the Iron and Steel Controller, the<br \/>\nCustoms\t Authorities  were not entitled to  consider  afresh<br \/>\nwhether that scrap was or was not usable in India&#8221;; (2) &#8220;the<br \/>\nlicence\t in question not having been granted by the  Customs<br \/>\nCollector, but by the Iron and Steel Controller, it was\t not<br \/>\nopen to the customs authorities to rely upon the  provisions<br \/>\nof the Imports and Exports Control Act, 1947, or the Exports<br \/>\nControl Order, 1954, for the purpose of making inspection of<br \/>\nthe  consignment which the petitioners were exporting&#8221;;\t and<br \/>\n(3)  &#8220;if  what was being exported was not Skull\t Scrap,\t but<br \/>\nstill was something the export of which was permitted by the<br \/>\nIron and Steel Controller on the ground that that scrap\t was<br \/>\nnot  usable  in India, there was nothing which\tthe  Customs<br \/>\nAuthorities  were  entitled to do&#8221;.  On\t those\tgrounds\t the<br \/>\nDivision Bench allowed the appeal preferred by the firm, set<br \/>\naside  the  order of the learned single Judge and  made\t the<br \/>\nrule absolute.\tThe learned Judges also dismissed the appeal<br \/>\nfiled  by the customs authorities and the Union of India  on<br \/>\nthe around that, as the firm only exported the goods covered<br \/>\nby  the\t licence, the customs authorities had  no  power  to<br \/>\nimpose a personal penalty under s. 167(8) of the Sea Customs<br \/>\nAct.   Civil  Appeal  No. 376 of  1963\thas  been  preferred<br \/>\nagainst\t the former order and Civil Appeal No. 377 of  1963,<br \/>\nagainst the latter order.\n<\/p>\n<p>The argument of the learned Additional Solicitor-General may<br \/>\nbriefly\t  be  stated  thus  :  There  is  no   conflict\t  of<br \/>\njurisdiction between the Iron and Steel Controller  issuing,<br \/>\na  licence  for\t exporting  steel  skull  scrap\t under\t the<br \/>\nprovisions  of\tthe  Export Control  Order,  1954,  and\t the<br \/>\ncustoms\t authorities prohibiting the export of the  same  on<br \/>\nthe  ground  that  they are not the  goods  covered  by\t the<br \/>\nlicence : they exercise different functions.  In the present<br \/>\ncase,  the  Iron  and Steel  Controller\t granted  an  export<br \/>\nlicence\t dated November 7, 1956, permitting the\t respondents<br \/>\nto  export  900\t tons of steel skull scrap  subject  to\t the<br \/>\nconditions  set\t out  in the said export  licence,  but\t the<br \/>\ncustoms\t authorities found, on the materials  placed  before<br \/>\nthem, that out of the total quantity shipped, 320 tons\twere<br \/>\nnon-skull  scrap and on that finding they levied a  fine  in<br \/>\nlieu  of  confiscation\tof the goods as\t they  were  already<br \/>\nallowed to be exported.\t The said order was well within\t the<br \/>\njurisdiction  of  the customs  authorities  and,  therefore,<br \/>\nwhether\t it  was right or wrong, the High Court\t should\t not<br \/>\nhave interfered under Art. 226 of the Constitution.  If\t his<br \/>\ncontention was correct, the argument proceeded, as the\tfirm<br \/>\nexported  goods\t contrary to the terms of the  licence,\t the<br \/>\ncustoms authorities, in view of the recent -decision<br \/>\n<span class=\"hidden_text\">290<\/span><br \/>\nof  this Court, had power to impose the penalty\t within\t the<br \/>\nmaximum\t limits prescribed in s. 167 (8) of the Sea  Customs<br \/>\nAct.  As that order also was within the jurisdiction of\t the<br \/>\ncustoms\t authorities, the High Court should have  maintained<br \/>\nit.\n<\/p>\n<p>The  argument of Mr. Desai, learned counsel for the  respon-<br \/>\ndents,\tmay  be put thus: Under the  Export  Control  Order,<br \/>\n1954, the Iron and Steel Controller can issue a licence\t for<br \/>\nexporting iron skull scrap if he is of the opinion that\t the<br \/>\nsaid scrap is not usable in India.  The Schedule annexed  to<br \/>\nthe  said Order treats scrap of iron and steel as  one\tunit<br \/>\nand  it does not make a distinction between non-skull  scrap<br \/>\nand skull scrap nor does that Order define what skull  scrap<br \/>\nis.  In the circumstances when the Iron and Steel Controller<br \/>\ndescribed certain scrap as skull scrap and gave the  licence<br \/>\nfor  exporting the same, it is not open to  the\t appropriate<br \/>\ncustoms authority to hold that the said description is wrong<br \/>\nand,  therefore,  the  scrap sought to be  exported  is\t not<br \/>\ncovered by the licence.\n<\/p>\n<p>To  appreciate the rival contentions it is necessary at\t the<br \/>\noutset\t to   ascertain\t  the  scope   of   the\t  respective<br \/>\njurisdictions  of  the Iron and Steel Controller  under\t the<br \/>\nExports\t Control Order and the Customs Collector  under\t the<br \/>\nSea Customs Act qua the goods covered by the licence  issued<br \/>\nby the former.\n<\/p>\n<p>The  Iron and Steel Control Order, 1956, was issued  by\t the<br \/>\nCentral Government in exercise of the powers conferred on it<br \/>\nby s. 3 of the Essential Commodities Act and in supersession<br \/>\nof  all previous orders on the subject.\t Under s. 3  of\t the<br \/>\nImports and Exports (Control) Act, 1947 (Act 18 of 1947) the<br \/>\nCentral\t Government may, by order published in the  Official<br \/>\nGazette,  make\tprovisions for prohibiting,  restricting  or<br \/>\notherwise  controlling the export of the goods specified  in<br \/>\nthe  order.   In  exercise of the  said\t power\tthe  Central<br \/>\nGovernment   issued  the  Exports  (Control)  Order,   1954,<br \/>\nproviding  that\t no  person shall export any  goods  of\t the<br \/>\ndescription specified in Schedule I annexed thereto,  except<br \/>\nunder  and  in\taccordance with a  licence  granted  by\t the<br \/>\nCentral\t Government or by any officer specified in  Schedule<br \/>\n11 to the said Order.\n<\/p>\n<p>Under  s. 19 of the Sea Customs Act, the Central  Government<br \/>\nmay  from  time\t to time by  notification  in  the  Official<br \/>\nGazette\t prohibit or restrict the bringing or taking by\t sea<br \/>\nor by land goods of any specified description into or out of<br \/>\nIndia across any customs frontier as defined by the  Central<br \/>\nGovernment.  Under s.\t 167(8)\t  thereof  the\t appropriate<br \/>\nauthority can confiscate the pro-\n<\/p>\n<p><span class=\"hidden_text\">\t\t\t    291<\/span><\/p>\n<p>hibited\t goods exported or imported and impose a penalty  on<br \/>\nthe person concerned, who illegally exported or imported  or<br \/>\nattempted  to  export any goods, in  the  manner  prescribed<br \/>\nthereunder.   It  is,  therefore,  clear  that\tthe  customs<br \/>\nauthorities   had   the\t jurisdiction  to   confiscate\t the<br \/>\nprohibited goods if they were exported.\t Under s. 178 of the<br \/>\nsaid  Act, &#8220;Any thing liable to confiscation under this\t Act<br \/>\nmay  be\t seized in any place in India either  upon  land  or<br \/>\nwater,\tor within the Indian customs waters, by any  officer<br \/>\nof customs or other person duly employed for the  prevention<br \/>\nof smuggling&#8221;.\n<\/p>\n<p>Is  there any conflict between the two jurisdictions,  i.e.,<br \/>\nthe  jurisdiction  of  the  licensing  authority  under\t the<br \/>\nExports\t (Control) Order and that of the  Customs  Authority<br \/>\nunder  the  Sea\t Customs  Act  ?  While\t under\tthe  Exports<br \/>\n(Control) Order certain articles can be exported only  under<br \/>\na  licence, issued by the appropriate  authority  prescribed<br \/>\nthereunder,  the appropriate Customs Authority\tcan  prevent<br \/>\nthe  export of the articles if they are not covered by\tsuch<br \/>\nlicence.   To  take an extreme case, if the  licence  issued<br \/>\npermitted  the\texport\tof iron and the\t licensee  seeks  to<br \/>\nexport\tgold, the Customs Authorities can certainly  prevent<br \/>\nthe  export of gold, for it is not covered by  the  licence.<br \/>\nIn this view, there is no conflict between the jurisdictions<br \/>\nof   the  two  authorities;  indeed,  their  functions\t are<br \/>\ncomplementary to each other.\n<\/p>\n<p>Can  it\t be  said,  as\tit  was\t contended  by\tthe  learned<br \/>\nAdditional  Solicitor General, that in the present case\t the<br \/>\nrespondents sought to export goods that were not covered  by<br \/>\nthe licence ? We have noticed earlier that under the Exports<br \/>\n(Control)  Order, 1954, no person shall export goods of\t the<br \/>\ndescription  specified\tin Schedule 1, except under  and  in<br \/>\naccordance with a licence granted by the Central  Government<br \/>\nor  by\tan  officer specified in  Schedule  11.\t  Under\t the<br \/>\nheading\t &#8220;Raw Materials and Articles Mainly  Unmanufactured&#8221;<br \/>\nin Part B of Schedule 1, item 3 is &#8220;scrap containing any  of<br \/>\nthe  metals  or\t alloys\t specified  in\tentry  C-9  of\tthis<br \/>\nSchedule&#8221;.   C-9  of  the Schedule  enumerates\tthe  various<br \/>\nmetals; and C-9(a)(x) is &#8220;Iron and Steel&#8221;.  The sub-headings<br \/>\n(1)  to\t (27)  thereof give  different\tcategories  of\tthat<br \/>\narticle.    Officers  competent\t to  grant  a  licence\t are<br \/>\nmentioned in Schedule 11 and they are (i) the Iron and Steel<br \/>\nController;  (ii)  a Deputy Iron and Steel  Controller;\t and\n<\/p>\n<p>(iii) an Assistant Iron and Steel Controller.  &#8216;Me Statement<br \/>\nof Export Licensing Policy issued by the Government of India<br \/>\nas  on\tOctober\t 31, 1956, throws some more  light  on\tthis<br \/>\nquestion.   Item 3 mentioned therein is\t &#8220;Scrap\t containing,<br \/>\nany  of the metals or alloys specified in entry C-9 of\tthis<br \/>\nSchedule; in the column under the heading &#8220;Other details, if<br \/>\nany&#8221;, item (ii)<br \/>\n<span class=\"hidden_text\">292<\/span><br \/>\nis &#8220;Iron and steel scrap&#8221;.  Iron and steel scrap is  divided<br \/>\ninto  two  categories, namely, (a) sheet cuttings,  and\t (b)<br \/>\nothers.\t   Against  the\t entry\t&#8220;sheet\t cuttings&#8221;   certain<br \/>\nconditions  for\t issuing  the  licence\tare  mentioned;\t and<br \/>\nagainst the entry &#8220;others&#8221;, the following remarks are found:<br \/>\n&#8220;Export\t of any other ferrous scrap is allowed by  the\tIron<br \/>\nand  Steel  Controller\tprovided he is\tsatisfied  that\t the<br \/>\nmaterial  is of no use in India.&#8221; A combined reading of\t the<br \/>\nrelevant  provisions of the Exports (Control) Order and\t the<br \/>\nentries in the Statement of Export Licensing Policy leads to<br \/>\nthe  following\tposition  :  The  Exports  (Control)   Order<br \/>\nrecognizes  scrap of iron and steel as one entity;  it\tdoes<br \/>\nnot  recognize different categories of scrap, such as  skull<br \/>\nscrap  or non-skull scrap; it permits export of\t such  scrap<br \/>\nunder a licence issued by the Iron and Steel Controller,  as<br \/>\nhe is the officer who regulates the trade in scrap under the<br \/>\nIron and Steel Control Order; but under the Policy Statement<br \/>\na  distinction\tis  made between sheet\tcuttings  and  other<br \/>\nferrous scrap; in the case of the export of the former\tmore<br \/>\nstringent  conditions are imposed than in, the case  of\t the<br \/>\nlatter; and in the case of the latter export is permitted if<br \/>\nin the opinion of the Iron and Steel Controller the material<br \/>\nis  of no use in India.\t We are not concerned in  this\tcase<br \/>\nwith sheet cuttings, but only with other ferrous scrap.\t The<br \/>\nExports\t (Control) Order, the Schedules annexed thereto\t and<br \/>\nthe Statement of Export Licensing Policy do not define skull<br \/>\nscrap at all; skull scrap is what the Officer thinks it\t is.<br \/>\nThe only restriction on the Controller giving a licence\t for<br \/>\nexport\tof scrap is that in his opinion it is not usable  in<br \/>\nIndia; his opinion is final.  For the purpose of his opinion<br \/>\nhe  may\t describe  or categorize the  scrap  in\t the  manner<br \/>\nconvenient  to him; but that does not make it anytheless  an<br \/>\nexportable scrap.  In the circumstances it must be held that<br \/>\nthe licence covers only the scrap not usable in India.\t The<br \/>\ndescription   of   the\tscrap  has  no\trelevance   to\t its<br \/>\nexportability.\n<\/p>\n<p>A comparative study of other items in Schedule 1 annexed  to<br \/>\nthe  Exports (Control) Order shows that they  are  different<br \/>\nitems and if licence is given for the export of a particular<br \/>\nitem, obviously the licensee cannot export a different item.<br \/>\nBut   scrap  is\t only  one  item  and,\ttherefore,  if\t the<br \/>\nappropriate authority issues a licence for the export of the<br \/>\nsame, it cannot be held that the licensee is exporting\tsome<br \/>\nother item.\n<\/p>\n<p>A different approach leads to the same position.  The record<br \/>\ndiscloses,  and it is not disputed, that the Iron and  Steel<br \/>\nController  and his subordinates examined the goods  at\t the<br \/>\ntime  the licence was issued and at the time of\t loading  of<br \/>\nthe goods in the<br \/>\n<span class=\"hidden_text\">\t\t\t    293<\/span><br \/>\nship  for  export.  The licence was,  therefore,  issued  in<br \/>\nrespect\t of particular goods identified by  the\t appropriate<br \/>\nauthorities who were authorised to issue the licence and  to<br \/>\ninspect the goods.  The name given by the authorities to the<br \/>\ngoods  was,  therefore, the name by  which  the\t appropriate<br \/>\nauthorities identified the goods.  The licence was issued in<br \/>\nrespect of the specified goods identified by the appropriate<br \/>\nauthorities.   It  is not possible, therefore, to  say\tthat<br \/>\ngoods  other than those in respect whereof the\tlicence\t was<br \/>\nissued were sought to be exported.\n<\/p>\n<p>In  this view, can it be said that the\tCustoms\t Authorities<br \/>\nhad  jurisdiction to confiscate the scrap of iron and  steel<br \/>\ncertified  to  be  not usable in India and  covered  by\t the<br \/>\nlicence\t granted  by the Iron and Steel\t Controller  on\t the<br \/>\nground\tthat the scrap exported was, in their view,  not  of<br \/>\nthe  description  given\t in  the  licence  ?   The   Customs<br \/>\nAuthorities  would  have  such\tjurisdiction  if  under\t the<br \/>\nExports\t (Control) order scrap of  iron and steel was  dealt<br \/>\nwith  under different heads.  But, as we have  pointed\tout,<br \/>\nfor  the purpose of satisfaction of the Controller  and\t for<br \/>\nthe purpose of issuing a licence for export, the said  scrap<br \/>\nwas  one unit and the description of it in the\tlicence\t was<br \/>\nonly  that given to it by the Iron and Steel Controller\t for<br \/>\nidentifying  the  goods.   What\t is  important\tis  not\t the<br \/>\ndescription  but  whether it is scrap of iron and  steel  in<br \/>\nrespect\t whereof the licence was issued.  In this view,\t the<br \/>\nCustoms\t Authorities  had no juridiction to  confiscate\t the<br \/>\nscrap  on  the ground that the same was\t a  mis-description.<br \/>\nThe  conclusion\t arrived at by the Court is,  in  our  view,<br \/>\ncorrect.\n<\/p>\n<p>If  the goods were not prohibited goods, the Customs  Autho-<br \/>\nrities had no jurisdiction to impose the penalty.<br \/>\nLastly,\t it was argued that the High Court should  not\thave<br \/>\nexercised   its\t  jurisdiction\tunder  Art.   226   of\t the<br \/>\nConstitution, as the respondents had an effective remedy  by<br \/>\nway  of appeal to Higher Customs Authorities.  But the\tHigh<br \/>\nCourt  rightly\tpointed\t out that  the\trespondents  had  no<br \/>\neffective remedy, for they could not file an appeal  without<br \/>\ndepositing  as\ta condition precedent the  large  amount  of<br \/>\npenalty\t imposed on them.  That apart, the existence  of  an<br \/>\neffective remedy does not oust the jurisdiction of&#8217; the High<br \/>\nCourt,\tbut  it is only one of the  circumstances  that\t the<br \/>\nCourt  should  take  into consideration\t in  exercising\t its<br \/>\ndiscretionary\tjurisdiction   under   Art.   226   of\t the<br \/>\nConstitution.\tIn this case, the High Court thought fit  to<br \/>\nexercise its jurisdiction under Art. 226 of the Constitution<br \/>\nand we do not see any exceptional circumstances to interfere<br \/>\nwith its discretion.  In the result, Civil Appeals; Nos. 376<br \/>\nand 377 of 1963 are dismissed with costs.\n<\/p>\n<p>2 94<br \/>\nNow  coming  to\t the other appeals,  though  there  is\tsome<br \/>\n,difference  in the matter of details between the  aforesaid<br \/>\nappeals and the other appeals, the broad facts are  similar.<br \/>\nThe  view  we have expressed in the  aforesaid\ttwo  appeals<br \/>\ngoverns the other appeals also.\t The other appeals are\talso<br \/>\ndismissed with costs.  One hearing fee.\n<\/p>\n<p>Ragbubar  Dayal, J. I regret I have to come to\ta  different<br \/>\nconclusion.\n<\/p>\n<p>I need not repeat the facts leading to these appeals as they<br \/>\nhave  been stated in the judgment of brother Subba  Rao,  J.<br \/>\nThe  main  question for determination in  these\t appeals  is<br \/>\nwhether\t the  Collector of Customs had power  to  check\t the<br \/>\nscrap for the purposes of satisfying himself that the  scrap<br \/>\nto  be\texported answered the description  of  the  material<br \/>\nwhich  was to be exported under the licence granted  to\t the<br \/>\nexporter.    The  appellant  claims  such  a   right.\t The<br \/>\nrespondent  denies  it and urges that the decision  -of\t the<br \/>\nIron and Steel Controller contemplated by the conditions  of<br \/>\nthe licence was final and the scrap in regard to which\tthat\n<\/p>\n<p>-decision  is  given could be exported without\tany  further<br \/>\ncheck by the Collector.\n<\/p>\n<p>It  is\tnecessary,  before  determining\t this  controversial<br \/>\npoint, to first refer to the various provisions relating  to<br \/>\nthe powers and jurisdiction of the Collector of Customs with<br \/>\nrespect\t to  the export of iron and steel for  whose  export<br \/>\nthere exists some prohibition or restriction.<br \/>\nSection\t (3) 1 of the Imports &amp; Exports (Control) Act,\t1947<br \/>\n(Act.\tXVIII of 1947) empowered the Central  Government  to<br \/>\nmake  provision\t for prohibiting  restricting  or  otherwise<br \/>\ncontrolling  the  import, export of goods of  any  specified<br \/>\ndescription.   Sub-s. (2) of s. 3 provides inter  alia\tthat<br \/>\nall goods to which any order under sub-s. (1) applies  shall<br \/>\nbe deemed to be goods of which the import or export has been<br \/>\nprohibited or restricted under s. 19 of the Sea Customs Act,<br \/>\n1878,\thereinafter  called  the  Act,\tand  that  all\t the<br \/>\nprovisions of that Act shall have effect accordingly.<br \/>\nBy virtue of the power conferred by sub-s. (1) of s. 3,\t the<br \/>\nCentral Government issued the Exports (Control) Order, 1954.<br \/>\nClause\t3  of  this Order provides that\t save  as  otherwise<br \/>\nprovided  in the Order, no person shall export any goods  of<br \/>\nthe description specified in Schedule 1, except under and in<br \/>\naccordance with a licence granted by the Central  Government<br \/>\nor  by any officer -specified in Schedule II.  The  officers<br \/>\nspecified in Schedule II<br \/>\n<span class=\"hidden_text\">\t\t\t    295<\/span><br \/>\ninclude the Iron &amp; Steel Controller, the Deputy Iron &amp; Steel<br \/>\nController  and\t the  Assistant\t Iron  &amp;  Steel\t Controller.<br \/>\nClause\t5(1)  of the Exports Order provides that  a  licence<br \/>\ngranted\t under\tthe Order may contain  such  conditions\t not<br \/>\ninconsistent  with  the Act or the Order  as  the  licensing<br \/>\nauthority may deem fit.\t Sub-cl. (3) of cl. 5 provides\tthat<br \/>\nthe licensee shall comply with all the conditions imposed or<br \/>\ndeemed to be imposed under the clause.\n<\/p>\n<p>Schedule  1 mentions the commodities subject to export\tcon-<br \/>\ntrol.  Group B-3 mentions scrap containing any of the metals<br \/>\nor alloys specified in entry C-9 of that schedule.  Entry C-<br \/>\n9  mentions many metals which include iron and\tsteel.\t The<br \/>\nexport of iron and steel scrap is subject to control and, in<br \/>\nview  of cl. 3 of the Exports Order, it cannot\tbe  exported<br \/>\nexcept\tunder and in accordance with the licence granted  by<br \/>\nthe  competent\tauthority referred to in cl. 3. In  view  of<br \/>\nsub-s. (2) of s. 3 of the Imports and Exports (Control) Act,<br \/>\niron  and  steel  scrap would be deemed to  be\tgoods  whose<br \/>\nexport has been prohibited or restricted under s. 19 of\t the<br \/>\nAct  and  all the provisions of that Act would\thave  effect<br \/>\naccordingly.\n<\/p>\n<p>Now,  s.  19 of the Act empowers the Central  Government  to<br \/>\nprohibit  or  restrict the bringing or taking by sea  or  by<br \/>\nland goods of any specified description into or out of India<br \/>\nacross\tany  customs  frontier as  defined  by\tthe  Central<br \/>\nGovernment.  Section 167(8) provides inter alia that if\t any<br \/>\ngoods exportation of which is for the time being  prohibited<br \/>\nor restricted by or under Chapter IV of the Act be  exported<br \/>\ndfrom  India contrary to such prohibition or restriction  or<br \/>\nif  any attempt be made so to export any such  goods,  those<br \/>\ngoods  would be liable to confiscation and that\t any  person<br \/>\nconcerned  in any such offence would be liable to a  penalty<br \/>\nnot  exceeding\tthree times the value of the  goods  or\t not<br \/>\nexceeding  Rs.\t1,000.\tIt follows that scrap  of  iron\t and<br \/>\nsteel  is  liable to confiscation if it is exported  or\t any<br \/>\nattempt is made to export it contrary to the prohibition  or<br \/>\nrestriction imposed by the Central Government.\tSection\t 178<br \/>\nof  the Act empowers any officer of Customs to seize in\t any<br \/>\nplace  in  India either upon land or water,  or\t within\t the<br \/>\nIndian Customs waters, anything liable to confiscation under<br \/>\nthe Act.  It is clear therefore that the officers of Customs<br \/>\nhave  power  to seize steel scrap if it be  liable  to\tcon-<br \/>\nfiscation,  that is, if it is being exported or any  attempt<br \/>\nis  being made to export it contrary to the  prohibition  or<br \/>\nrestriction  imposed.  If steel scrap is not exported  under<br \/>\nand  in\t accordance with the licence issued  by\t the  proper<br \/>\nauthority,  it would be liable to confiscation.\t It  becomes<br \/>\nthe duty of the Customs Authorities<br \/>\n<span class=\"hidden_text\">296<\/span><br \/>\nto  check the steel scrap which is exported  for  satisfying<br \/>\nthemselves that it is being exported under and in accordance<br \/>\nwith  the licence issued by the proper authority.   Such   a<br \/>\nright\tof  the\t Customs Authorities under the\tAct  is\t not<br \/>\nseriously disputed for the respondent.\n<\/p>\n<p>    What is really contended for the respondent and what has<br \/>\nbeen  held by the High Court is that the decision  given  by<br \/>\nthe Iron &amp; Steel Controller in view of the conditions of the<br \/>\nlicence\t is  final and that this finality  of  the  decision<br \/>\nimpliedly  takes  away\tthe power and  jurisdiction  of\t the<br \/>\nCustoms authorities, which they have under the provision  of<br \/>\nthe Act to check whether the goods to be exported tally with<br \/>\nthose  mentioned  in  the licence.  The\t conditions  of\t the<br \/>\nlicense on which reliance is placed for the respondent are:\n<\/p>\n<p>    &#8220;1.\t The materials specified overleaf will be  inspected<br \/>\nat  the\t Docks\tby  representatives  of\t the  Iron  &amp;  Steel<br \/>\nController  and also by representatives of such\t parties  as<br \/>\nthe Iron &amp; Steel Controller may direct.\t To enable the\tIron<br \/>\n&amp;  Steel Controller to arrange for the inspection  at  least<br \/>\ntwo clear days&#8217; notice is required. The Customs\t Authorities<br \/>\nhave  been  informed not to permit loading of  scrap  before<br \/>\nsuch  inspection is carried out and the\t material  certified<br \/>\nfor  shipment by an officer authorised by the Iron  &amp;  Steel<br \/>\nController.\n<\/p>\n<p>    2.\tIf it is found as a result of this  inspection\tthat<br \/>\nthe scrap in question can be utilised in India the  exporter<br \/>\nwill have to remove the materials from the docks at his\t own<br \/>\nexpense\t and sell it to consumers in India nominated by\t the<br \/>\nIron  &amp;\t Steel Controller at the price to be  fixed  by\t the<br \/>\nlatter.\t  Exports  will be permitted only if  the  materials<br \/>\ncannot be used in India.\n<\/p>\n<p>    3.\tThe  Iron  &amp; Steel  Controllers\t decisions  in\tthis<br \/>\nrespect shall be final.\t Government will not be\t responsible<br \/>\nfor   any  claim  for  loss  due  to  demurrage,   wharfage,<br \/>\nfrustration of contract or any other reasons whatsoever.&#8221;\n<\/p>\n<p>    These  conditions to which the licence is  subject\tmean<br \/>\nthat  despite the scrap answering the description  of  steel<br \/>\nskull  scrap  whose export was allowed by the  licenee,\t the<br \/>\nIron  &amp; Steel Controller could disallow the export  of\tsuch<br \/>\nscrap  which upon inspection appears to be such which  could<br \/>\nbe  utilised in this country. Condition 3 gives finality  to<br \/>\nthe decision of the Iron &amp; Steel Con-\n<\/p>\n<p><span class=\"hidden_text\">\t\t\t    297<\/span><\/p>\n<p>troller\t in  this  respect, i.e., in respect  of  the  scrap<br \/>\ndetermined to be such which could be utilised in India.<br \/>\nThe  decision contemplated by these conditions is not  about<br \/>\nthe identity of the scrap material with the scrap  described<br \/>\nand  loaded under the licence for export, but is  only\twith<br \/>\nrespect to the possibility of the use of any portion of\t the<br \/>\nscrap within the country.  This is the clear  interpretation<br \/>\nof the conditions, according to the language used.<br \/>\nIt  is\tto be noted that there is nothing in the  Imports  &amp;<br \/>\nExports\t Control Act or in the Exports Control\tOrder  which<br \/>\nlays  down among the duties of the Iron &amp;  Steel  Controller<br \/>\nthe  duty to check that the material collected at the  docks<br \/>\nfor export tallied with the material for export of which the<br \/>\nlicence\t had  been granted.  Neither the Import\t and  Export<br \/>\nControl\t Act nor the Export Control Order contains any\tsuch<br \/>\nexpress\t provision  which debars or  prohibits\tthe  Customs<br \/>\nAuthorities  from exercising, their powers of  checking\t the<br \/>\ngoods  sought to be exported for satisfying themselves\tthat<br \/>\nthey  were  being exported in accordance  with\tthe  licence<br \/>\ngranted for the export of the material.\t On the other  hand,<br \/>\nsub-s.\t(2)  of\t s. 3 makes all the provisions\tof  the\t Act<br \/>\neffective in regard to the goods whose export is  prohibited<br \/>\nor restricted under the Control Order as those are deemed to<br \/>\nbe  goods  whose export had been  prohibited  or  restricted<br \/>\nunder s. 19 of the Act.\n<\/p>\n<p>Further,  the  conditions  are\timposed\t by  the   licensing<br \/>\nauthority  under  cl.  5  of the Order.\t  They\thave  to  be<br \/>\nconsistent  with the Imports &amp; Exports Control Act  and\t the<br \/>\nOrder and cannot therefore take away directly or  indirectly<br \/>\nthe  powers of the Customs Authorities under the  provisions<br \/>\nof  the\t Act to satisfy themselves that goods sought  to  be<br \/>\nexported are in accordance with the licence.<br \/>\nIt  is\talso  urged that the grant of a\t licence  lifts\t the<br \/>\nprohibition  or restriction imposed on the export  of  steel<br \/>\nscrap  with the result that the scrap for which the  licence<br \/>\nis  granted  becomes  goods  for  the  export  of  which  no<br \/>\nprohibition or restriction exists.  I do not agree with this<br \/>\ncontention.   The  prohibition or restriction  imposed\tover<br \/>\ncertain types of goods continues so long as that restriction<br \/>\nis  imposed under a valid notification of the Government  of<br \/>\nIndia.\t The effect of the granting of the licence  is\tthat<br \/>\nthe licencee is permitted to export those goods whose export<br \/>\nis  permitted under the licence.  Those goods do not  become<br \/>\ngoods  which are not subject to the controls imposed by\t the<br \/>\nExport\tControl Orders.\t The goods to be exported by  virtue<br \/>\nof that licence<br \/>\n<span class=\"hidden_text\">298<\/span><br \/>\nare  subject  to the condition that they  answer  fully\t the<br \/>\ndescription of the goods for the export of which the licence<br \/>\nis granted.  The export is not to be only under the licence,<br \/>\nbut to be in accordance with it also.  That is what cl. 3 of<br \/>\nthe  Exports  Control Order requires.  It is  therefore\t not<br \/>\ncorrect\t to say that the mere grant of the licence  for\t the<br \/>\nexport\tof  certain  goods whose  export  is  prohibited  or<br \/>\nrestricted  takes those goods out of the category  of  goods<br \/>\nwhose export is prohibited or restricted.<br \/>\nMuch  stress has been laid for the respondent on the  export<br \/>\npolicy\tof the Government which, it is urged,  supports\t the<br \/>\ncontention  that  steel\t scarp of  any\tdescription  can  be<br \/>\nexported  except  such scrap which can be  utilised  in\t the<br \/>\ncountry.   It is urged that the prohibition  or\t restriction<br \/>\nunder  cl. 3 of the Exports Control Order really applies  to<br \/>\nthe steel scrap which cannot be used in India.<br \/>\nThe  policy of the Government laid down for the guidance  of<br \/>\nthe  Central  Government  and  the  officers  specified\t  in<br \/>\nSchedule  11 of the Export Control Order and to some  extent<br \/>\nfor  the  guidance  of\tthe would  be  exporters  in  making<br \/>\nrequests for the grant of licences cannot have the effect of<br \/>\naffecting the provisions of the Import &amp; Export Control\t Act<br \/>\nor  the\t Control Order issued under it. Reference  has\tbeen<br \/>\nmade  to  Part II of the Hand Book of Export  Trade  Control<br \/>\npublished   by\tthe  Ministry  of  Commerce   and   Consumer<br \/>\nIndustries of the Government of India in October 1956.\t The<br \/>\nstatement  of the export licensing policy as on October\t 31,<br \/>\n1956, states with reference to export of all iron and  steel<br \/>\nscrap except scrap, presumably from sheet cuttings :\n<\/p>\n<blockquote><p>\t      &#8220;Export of any other ferrous scrap is  allowed<br \/>\n\t      by the Iron &amp; Steel Controller provided he  is<br \/>\n\t      satisfied\t that the material is of no  use  in<br \/>\n\t      India.&#8221;\n<\/p><\/blockquote>\n<p>This  may  be the general policy for the  granting  or\tnon-<br \/>\ngranting of a licence for the export of iron and steel scrap<br \/>\nother than from iron sheet cuttings, but this does not\tmean<br \/>\nthat if the licence is for the export of any particular type<br \/>\nof steel scrap, it may still be considered to be the licence<br \/>\npermitting  export of steel scrap of any other\tkind  except<br \/>\nscrap  from sheet cuttings.  If this policy statement  meant<br \/>\nthat  the  licence  granted would have\tjust  mentioned\t the<br \/>\nquantity of iron and steel scrap other than scrap from sheet<br \/>\ncuttings, instead of specifying the nature of the scrap\t for<br \/>\nthe  export  of which the licence is  granted.\t The  policy<br \/>\nstated\tin  this statement is really a\trestriction  on\t the<br \/>\nexercise  of the discretion of the authorities empowered  to<br \/>\ngrant the licence, the restriction being that no licence  be<br \/>\ngranted for the export of iron<br \/>\n<span class=\"hidden_text\">299<\/span><br \/>\nand  steel scrap other than scrap from sheet cuttings if  it<br \/>\ncould  be utilised in India.  The authorities were  free  to<br \/>\nexercise the discretion with respect to the export of  scrap<br \/>\nwhich  could not be utilised in India.\tThe mere  fact\tthat<br \/>\ncertain\t scrap could not be utilised in India does not\tmean<br \/>\nthat  its export is freely allowed.  What may not be  usable<br \/>\nin the country at a certain point of time may become  usable<br \/>\nafter a lapse of time.\n<\/p>\n<p>I am therefore of opinion that neither the policy  statement<br \/>\nnor the provisions about the granting of the licence justify<br \/>\nthe  conclusion that scrap which could not be used in  India<br \/>\ncould  be exported irrespective of the terms of the  licence<br \/>\nor  that the moment a licence is granted for the  export  of<br \/>\ncertain scrap that scrap gets the status of material for the<br \/>\n&#8220;port  of which there exists no prohibition  or\t restriction<br \/>\nwith  the  result that it would not come  within  the  goods<br \/>\nwhich  could be checked by the Customs authorities  for\t the<br \/>\npurpose\t of satisfying themselves whether those\t goods\twere<br \/>\nbeing exported in accordance with the terms of the licence.<br \/>\nReference  may\talso be made to Chapter VI, Part  1  of\t the<br \/>\naforesaid Handbook of Export Trade Control.  This deals with<br \/>\ncustoms\t  and  foreign\texchange  procedure.   Paragraph   1<br \/>\nmentions the shipping bill and the export licence among\t the<br \/>\ndocuments  to be submitted to the export department  of\t the<br \/>\nCustom House at the port of export.  Para 2 provides for the<br \/>\nscrutiny of these documents in the department inter alia for<br \/>\nthe  purpose  of  verifying  that  the\tproposed  &#8220;port\t  is<br \/>\npermissible  and the consignment satisfies the\trequirements<br \/>\nunder the Export Control Order.\t It further provides :\n<\/p>\n<blockquote><p>\t      &#8220;If the Customs authorities are satisfied that<br \/>\n\t      the documents are in order, an endorsement  is<br \/>\n\t      made on the shipping bill giving directions to<br \/>\n\t      the  Preventive Officer, Examining Officer  or<br \/>\n\t      the  Appraiser at the docks or jetties  as  to<br \/>\n\t      the physical examination to be carried out  in<br \/>\n\t      respect of the value, description etc., of the<br \/>\n\t      consignment  and\taccording sanction  for\t its<br \/>\n\t      export.&#8221;\n<\/p><\/blockquote>\n<p>This  provision concerning the procedure to be\tfollowed  by<br \/>\nthe  Customs Authorities makes it clear that the  Preventive<br \/>\nOfficer,  the  Examining  Officer or the  Appraiser  of\t the<br \/>\nCustoms\t Department  at the docks have to  do  the  physical<br \/>\nexamination in respect of the description of the consignment<br \/>\nto be exported and to sanction the export if satisfied\tthat<br \/>\nthe  consignment  is  in accordance with the  terms  of\t the<br \/>\nlicence.  This is in accordance with the<br \/>\n<span class=\"hidden_text\">300<\/span><br \/>\nrequirements  of the provisions of the Act as  stated  above<br \/>\nand  goes against the contention for the respondent  on\t the<br \/>\nbasis of the conditions in the licence about the finality of<br \/>\nthe  decision of the Iron &amp; Steel Controller  about  certain<br \/>\ngoods sought to be exported to be usable in the country.<br \/>\nIt is also urged that scrap of &#8216;iron and steel&#8217; is one\tunit<br \/>\nunder  .the  Export Control Order, that the Order  does\t not<br \/>\ncontemplate  any different varieties of such scrap and\tthat<br \/>\ntherefore  the granting of the licence for  exporting  steel<br \/>\nskull scrap amounts, in law, to the granting of the  licence<br \/>\nor  exporting  any steel scrap, even if that is\t not  &#8216;steel<br \/>\nskull scrap&#8217; Which is not defined under the Export  &#8216;Control<br \/>\nAct or the Order.  I do not agree.  It is not disputed\tthat<br \/>\nsteel  scrap can be of different varieties.  The Order\tneed<br \/>\nnot  specify all the varieties.\t Special specification of  a<br \/>\nvariety could be necessary if it was to be excepted from the<br \/>\nscope  of  the Order.  Clause 5 of the\tOrder  empowers\t the<br \/>\nlicensing authority to impose, when granting a licence, such<br \/>\nconditions  as it considers necessary to impose and  be\t not<br \/>\ninconsistent with the Act or Order. The\t       licensing<br \/>\nauthority could therefore provide in the licencethat steel<br \/>\nscrap  of  a  particular variety  would\t be  exported.\t The<br \/>\nexported  goods will then be in accordance with the  licence<br \/>\nif  they come within the specified variety.  I am  therefore<br \/>\nof  opinion  that the licensing authority was  competent  to<br \/>\nallow  export  of  any\tparticular  variety  and  that\t the<br \/>\nrespondents  could not under the licence export steel  scrap<br \/>\nof any variety other than that stated in the licence.<br \/>\nI therefore hold that the officers of the Customs Department<br \/>\nhad power and jurisdiction to examine the steel scrap  which<br \/>\nthe  respondent was seeking to export to satisfy  themselves<br \/>\nthat  that scrap was really steel skull scrap  whose  export<br \/>\nhad been permitted under the licence.\n<\/p>\n<p>The Additional Collector of Customs acted within his  juris-<br \/>\ndiction\t in  checking  the  scrap  to  be  exported  by\t the<br \/>\nrespondent.   It was for him to decide whether the scrap  to<br \/>\nbe exported was of the kind for which the licence was given.<br \/>\nWe,  in\t the exercise of writ  jurisdiction,  cannot  enter,<br \/>\nunless mala fides are alleged, into the question whether his<br \/>\nopinion\t about\tthe nature of the goods to be  exported\t was<br \/>\nright  or not.\tThe Act contains provisions for\t the  person<br \/>\naggrieved with the order of the Officer of Customs under  s.<br \/>\n167(8)\tto appeal against that order.  It is for the  autho-<br \/>\nrities\tprovided by the Act for determining the\t correctness<br \/>\nof  the orders of the Customs Officers with respect  to\t the<br \/>\nconfiscation of goods and penalty imposed to decide on being<br \/>\nproperly moved<br \/>\n<span class=\"hidden_text\">\t\t\t    301<\/span><br \/>\nthe orders of the customs officers were correct or  required<br \/>\nsome modification.\n<\/p>\n<p>It is urged that there was no evidence before the Additional<br \/>\nCollector   to\tcome  to  the  conclusion  that\t the   scrap<br \/>\nconfiscated  was not steel skull scrap.\t The  contention  is<br \/>\nnot sound.  The Additional Collector took into consideration<br \/>\ncertain\t survey\t reports of competent  surveyors  about\t the<br \/>\ndescription of the cargo exported by the respondent as steel<br \/>\nskull  scrap.\tSuch  survey reports were  produced  by\t the<br \/>\nrespondent.   It  is  therefore not the case  in  which\t the<br \/>\nAdditional  Collector proceeded on no evidence\tfor  holding<br \/>\nthat  the quantity of scrap confiscated was not steel  skull<br \/>\nscrap.\n<\/p>\n<p>It  is not really disputed that the entire qantity of  scrap<br \/>\nexported  by  the respondent came within the  definition  of<br \/>\nskull  scrap  as given in &#8216;Metals Hand Book&#8217; by\t Taylor\t and<br \/>\nLyman (American Institute of Metals, 1948 Ed) which reads :\n<\/p>\n<blockquote><p>\t      &#8220;A film or dross remaining in a pouring vessel<br \/>\n\t      after the metal has been poured-A frozen shell<br \/>\n\t      of metal sometimes remaining in the bottom  of<br \/>\n\t      the ladle.&#8221;\n<\/p><\/blockquote>\n<p>The  respondent however urges that a wider meaning is  given<br \/>\nto  this  expression  in India.\t  There\t is  not  sufficient<br \/>\nmaterial  on  record to substantiate  this  allegation.\t  In<br \/>\nmatters\t of international trade, it appears a bit  difficult<br \/>\nto  expect  that  the expression &#8216;skull\t scrap&#8217;\t would\thave<br \/>\ndifferent  meanings  in different countries  or\t that  India<br \/>\nalone  would put a wider meaning on the expression with\t the<br \/>\nresult that there might be disputes between the exporters of<br \/>\nthis country and the importers of countries abroad.<br \/>\nIt  has been urged that as the Iron &amp; Steel  Controller\t had<br \/>\npower  to grant the licence for the export of  steel  scrap,<br \/>\nhis order on the shipping bill after inspecting the scrap on<br \/>\nthe  docks that it was passed for export, be treated as\t the<br \/>\nrequisite  licence for the export of the actual scrap  which<br \/>\nhad  been  inspected  at  the docks.  Such  a  note  on\t the<br \/>\nshipping  bill does not amount to licence granted under\t the<br \/>\nrelevant  provisions  of the Act and the  Import  &amp;  -Export<br \/>\n(Control)  Act.\t  The Export Control Order  could  not\thave<br \/>\ncontemplated  such  a report of the  Inspecting\t Officer  to<br \/>\namount\tto the granting of a licence for the export.  If  it<br \/>\ncontemplated  so,  the entire procedure for the grant  of  a<br \/>\nlicence would have been different.  Further, the person\t who<br \/>\ninspected  the scrap at the docks and passed it\t for  export<br \/>\nwas  not an officer mentioned in Schedule 11 of\t the  Export<br \/>\nControl\t Order.\t  The  materials taken to the  dock  by\t the<br \/>\nexporter  are  not necessarily inspected  by  the  specified<br \/>\nofficer but by any representative of the<br \/>\nSup.Cl\/65-5<br \/>\n<span class=\"hidden_text\">302<\/span><br \/>\nIron  &amp; Steel Controller and the representative too  has  to<br \/>\ninspect the material along with the representatives of\tsuch<br \/>\nparties\t as the Iron &amp; Steel Controller might  direct.\t The<br \/>\nvarious shipping bills for the materials taken to the  docks<br \/>\nshow that the material was inspected ,on behalf of the\tIron<br \/>\n&amp;  Steel  Controller by the Deputy Assistant  Controller  of<br \/>\nIron  &amp;\t Steel,\t an officer who is not\tincluded  among\t the<br \/>\nofficers  mentioned  in Schedule II of the  Exports  Control<br \/>\nOrder.\n<\/p>\n<p>Another\t contention  raised for the respondent is  that\t the<br \/>\nAdditional  Collector could not confiscate the\tgoods  after<br \/>\nthey  had left the country and that therefore his  order  of<br \/>\nconfiscation  of  the scrap which according to him  was\t not<br \/>\nsteel  skull scrap was bad in law.  The affidavit  filed  by<br \/>\nthe  Additional\t Collector, appellant No.  1,  mentions\t the<br \/>\ncircumstances in which the scrap exported by respondent\t was<br \/>\nallowed\t to leave the country.\tIt was allowed to leave\t the<br \/>\ncountry after the Collector had formally seized it and after<br \/>\nthe  agents  of the shipping company had undertaken  not  to<br \/>\nrelease\t the  documents\t in  respect of\t the  cargo  to\t its<br \/>\nconsignees.   This  undertaking meant that the\tcargo  would<br \/>\nremain\tunder  the  control of the  customs  authorities  as<br \/>\nseized\tcargo  till  further  orders  from  the\t  Additional<br \/>\nCollector releasing the cargo and making it available to the<br \/>\nconsignees  by\tthe delivery of the necessary  documents  to<br \/>\nthem.  The documents were allowed to be delivered to them on<br \/>\nthe  application of the respondents praying for the  passing<br \/>\non of the necessary documents to the purchasers of the goods<br \/>\nin Japan and on the respondents giving a bank guarantee that<br \/>\nthe  full  f.o.b. value to be released from the\t said  parch<br \/>\nwould be paid to the customs authorities towards penalty  or<br \/>\nfine in lieu of confiscation that might be imposed upon\t the<br \/>\nrespondents  by\t the adjudicating  authority.\tThe  customs<br \/>\nauthorities had seized the goods when they were within their<br \/>\njurisdiction.\tIt is immaterial where the seized  goods  be<br \/>\nkept.\tIn the circumstances of the case, the  seized  goods<br \/>\nremained on the ship and were carried to Japan.\t The seizure<br \/>\nwas  lifted  by\t the  Additional  Collector  only  when\t the<br \/>\nrespondents  requested and gave bank guarantee.\t &#8216;Me  effect<br \/>\nof  the guarantee was that in case the Additional  Collector<br \/>\nadjudicated  that  part\t of the goods exported\twas  not  in<br \/>\naccordance  with the licence and had to be confiscated,\t the<br \/>\nrespondents,  would, in lieu of confiscation of\t the  goods,<br \/>\npay the fine equivalent to the of the bank guarantee.<br \/>\nSection\t 183 of the Act provides that whenever\tconfiscation<br \/>\nis authorised by the Act the Officer adjudging it would give<br \/>\nthe owner of the goods option to pay in lieu of confiscation<br \/>\nsuch fine<br \/>\n<span class=\"hidden_text\">303<\/span><br \/>\nas the officer thinks fit.  This option was extended to\t the<br \/>\nrespondent at the stage before the goods were released\tfrom<br \/>\nseizure.  The formal order of confiscation had to be  passed<br \/>\nafter the necessary enquiry and therefore when passed in the<br \/>\npresent case after the goods had actually left this  country<br \/>\ncannot\tbe said to be an order which could not be passed  by<br \/>\nthe Customs Authorities.\n<\/p>\n<p>I, therefore, do not agree with this contention.<br \/>\nThere  now  remains the question of the\t amount\t of  penalty<br \/>\nwhich can be imposed under s. 167(8) on the person concerned<br \/>\nin the export of prohibited or restricted goods contrary  to<br \/>\nthe  prohibition  or restriction.  This Court  has  held  in<br \/>\nRanchoddas  Atmarwn v. Union of India(1) that it is open  to<br \/>\nthe  Customs  Authorities to impose any of  the\t alternative<br \/>\npenalties  under  s.  167(8) even though the  amount  of  it<br \/>\nexceeds the amount of the maximum in the other\talternative.<br \/>\nThe amount of penalty was therefore not limited to Rs. 1,000<br \/>\nonly.  The penalty imposed is not said to exceed three times<br \/>\nthe value of the goods exported unauthorizedly.\t It  follows<br \/>\nthat  the  amount  of  penalty\timposed\t by  the  Additional<br \/>\nCollector of Customs was legal and that its reduction to Rs.<br \/>\n1,000 by the High Court was not correct.\n<\/p>\n<p>1,   therefore,\t hold  that  the  impugned  orders  of\t the<br \/>\nAdditional  Collector  were correct  and  would\t accordingly<br \/>\nallow  the  appeals, set aside the orders under\t appeal\t and<br \/>\nrestore\t the  orders  of  the  Additional  Collector   dated<br \/>\nDecember  21,  1957, but, in the  circumstances,  order\t the<br \/>\nparties to bear their own costs.\n<\/p>\n<p>\t\t       ORDER BY COURT<br \/>\nIn accordance with the opinion of the majority, the  appeals<br \/>\nare dismissed with costs.  One hearing fee.<br \/>\n(1) 3 S.C.R. 718.\n<\/p>\n<p><span class=\"hidden_text\">304<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India M. G. Abrol vs M\/S. Shantilal Chhotalal &amp; Co on 27 July, 1965 Equivalent citations: 1965 AIR 197, 1966 SCR (1) 284 Author: K Subbarao Bench: Subbarao, K. PETITIONER: M. G. ABROL Vs. RESPONDENT: M\/S. SHANTILAL CHHOTALAL &amp; CO. DATE OF JUDGMENT: 27\/07\/1965 BENCH: SUBBARAO, K. BENCH: SUBBARAO, K. DAYAL, RAGHUBAR [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-110898","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>M. G. Abrol vs M\/S. 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