1. All the aforesaid 5 appeals though involving different appellants and different importations, are being disposed of by a common order because the facts are similar and the appeal memoranda of the different appellants are identically worded.
2. Brief facts of the cases are that the appellants had imported revolvers of make R.S. (REINHOLD SATTLER KG) of 32 bore by post parcels. All the post parcels have arrived in India before 13-11-1986 when the importation of fire arms as gifts was banned. The said importation was hitherto allowed in terms of Public Notice 27/80, dated 15-7-1980 as reproduced in para 158 of the Import & Export Policy (April 1985 -March 1988) prior to 13-11-1980. It has been stated in the grounds of appeal in all cases that the import of fire arms as gifts was allowed liberally prior to 13-11-1980 subject to the following conditions :- (b) C.C.P. will be issued only if no fire arm is acquired during the last 10 years.
(d) C.C.P. will not be Jssued if the arm has already been despatched.
It has also been stated further in all the appeals that in view of the aforesaid Clause (d) CCP could not be issued to the appellants. Because of this procedural lapse for not obtaining the CCP, the learned advocate for the appellants argues that the harsh penalty of confiscating the fire arms absolutely is unjustified. The lower authorities, according to the learned advocate, should have allowed the fire arms to be given to the appellants on payment of appropriate fine in lieu of confiscation. He also stated that all other conditions i.e.
(a), (b) and (c) referred to above have been fulfilled in the instant cases. It has also been stated by the learned advocate that there has been a continuous practice of allowing the fire arms to be redeemed on payment of a fine in lieu of confiscation. In this connection, he has given illustrative list of cases in which fire arms have been released by the Assistant Collector of Customs, foreign Post, New Delhi or the Collector of Customs (Appeals), New Delhi. This list is the same which had been submitted by him in another appeal No. C/2474/86-NRB in the matter of Shri P.C. Joshi v. Collector of Customs, New Delhi. In that case, it has been urged by the learned advocate that the learned Member of the Tribunal by his order No. A/93 of 1987-NRB, dated 17-2-1987 has directed the lower authorities to decide the case de novo consistent with statutory provisions as well as past practice in the Custom House in similar cases. Learned advocate has further relied on two orders of Collector (Appeals), namely order dated 8-8-1985 in the appeal of Shri Narinder Singh and Order No. 1345-DLH/85, dated 17-10-1985 wherein the lower appellate authority had released the fire arms on payment of fines in lieu of confiscation. Learned advocate has submitted that the authorities cannot make discrimination in the matter of adjudieating similar cases. He relies for this proposition on Calcutta High Court's judgment in the case of S.S. Kothari v. CCE, Calcutta 1985 (6) ECC 81.
He relies in particular the following observations of the Hon'ble High Court :- (1) "The power to give option to the importer to release the prohibited goods upon payment of fine is a power coupled with the duty and in any event it should be exercised fairly and reasonably and not arbitrarily and capriciously". [page 87] (2) "If the authorities have on previous occasions allowed the importer to release the imported car upon payment of fine in lieu of confiscation, they cannot, unless there are compelling reasons, depart from previous decision". [page 89] The learned advocate has submitted that the lower authorities have not given any reasons in the instant cases for departing from the previous practice of the Custom House as mentioned specifically before those authorities.
Learned Advocate has also relied upon Central Board of Excise and Customs instructions issued from F.No. 495/9/84-Cus.Vl, dated 23-1-1986. It has been stated therein that "in the case of fire arms imported without valid Customs Clearance Permit, clearance on payment of redemption fine, if justified in the facts of the case, should be allowed only in cases where the importer voluntarily agrees to abide by a 'no sale condition' for a period of 5 years and the arms licence is endorsed with this condition. It is further clarified that even in such cases the total incidence of duty and fine should not be less than 500%, penalty being on merit in each case." 3. Apart from the foregoing argument the learned advocate has further submitted that the goods 'fire arms' are not prohibited in terms of the provisions of Section 125 of the Customs Act. They are merely restricted or controlled otherwise if regard is given to the provisions of Import and Export (Control) Act. Prohibition is to be understood in view of the provisions of Section 3(1) of the said Act if the goods are totally banned for importation and not even a licence is issued for their importation. Where a licence or CCP is required to be issued the goods would come within the scope of term 'restriction' and where the goods are imported through channelised agencies such goods would come within the scope of the expression 'otherwise controlled1 as mentioned in Section 3(1) of the Imports and Exports (Control) Act. In view of this distinction between prohibition' on the one hand and 'restriction or otherwise controlled' on the other hand the goods should not have been absolutely confiscated in view of the provisions of Section 125 of the Customs Act because discretion for absolute confiscation rests with the adjudicating authority only in respect of prohibited goods and not in respect of goods which are restricted or otherwise controlled.
4. Learned SDR appearing for the department has stated that the argument of the appellants' learned advocate seeking to make a distinction between 'prohibited' goods and 'restricted or otherwise controlled' goods is no longer valid in view of the Supreme Court's judgment in the case of Sheikh Mohd. Omer v. Collector of Customs, Calcutta (AIR 1971 SC 293). This has been held so by the Hon'ble Tribunal in the case of P.C. Joshi mentioned supra by the learned advocate for the appellants himself.
On the question of discretion, whether to release the goods on payment of fine in lieu of confiscation, the learned SDR has submitted that it is a matter of discretion of the adjudicating authority and this discretion cannot be challenged in appeal. He also submitted that policy in this regard may change from time to time. It may be that earlier the adjudicating authorities were somewhat liberal allowing release of the imported fire arms without CCP on payment of fine in lieu of confiscation but now in view of the conditions prevalent in certain parts of the country policy might have changed. On a query from the Bench learned SDR, however, could not place any document of policy or instructions issued by a competent authority in this regard. On a further query from the Bench whether learned SDR has any comments to make on the judgment of the Hon'ble High Court of Calcutta in the case of S.S. Kothari mentioned earlier, he stated that he has no comments on that aspect.
5. After the close of the arguments, learned advocate for the appellants was asked to indicate the market price of the fire arms imported in the instant cases so that a decision about the quantum of the redemption fine, if any, to be levied on them could be considered if it was decided on consideration of all facts and circumstances in these cases to release the fire arms on payment of redemption fine. The learned advocate has accordingly submitted two certificates - one from All India Arms and Ammunition Dealers Association and Anr. from Arms Dealers. These certificates indicate that the price of the fire arms imported in the instant cases varies from Rs. 10.000/- to Rs. 11,000/-.
Learned SDR has also seen these certificates submitted by the learned advocate for the appellants.
6. I have carefully considered the pleas advanced on both sides. 1 am unable to agree with the argument of the learned advocate for the appellants seeking to interpret the term 'prohibited' referred to in Section 125 of the Customs Act based on the distinction between 'prohibited' and 'restricted or otherwise controlled' in the Imports & Exports (Control) Act. This question is no longer open to controversy in view of the Supreme Court's judgment in the case of Sheikh Mohd.
Omer mentioned above.
7. As regards his argument that the lower authorities cannot make discrimination in matter of adjudication in different cases in similar circumstances based on the authority of Calcutta High Court's ruling in the case of S.S. Kothari, 1 find sufficient force but before the ratio of this ruling can be applied, it has to be considered whether the circumstances are similar in the instant appeals to the cases mentioned by the learned advocate during the course of arguments. No such similarity has been pointed out. In fact, the list of cases given and the two orders-in-appeal of Collector of Customs (Appeals), New Delhi mentioned above do not give the facts necessary for the purpose of deciding the question of similarity with the facts in these cases.
8. It was stated during the course of arguments and has also been stated in the various appeals memoranda before the Tribunal in the portion 'grounds of appeals' that Clauses (a), (b) and (c) referred to in para 2 above have been fulfilled in all these cases except the provisions of Clause (d), namely that CCP would not be issued if the arms have already been despatched. Absence of a CCP for not making any application to the licensing authorities before despatching of a fire arm could perhaps be considered as a procedural lapse and therefore, fire arms could be released on payment of fine in lieu of confiscation.
But I observe from a closer scrutiny of the facts that apart from non-fulfilment of condition (d) admitted by the appellants the important condition mentioned in (a) namely 'gifts are allowed from close relations', is also not fulfilled in all these cases. The fact that gifts in the instant cases are not from close relations is apparent from Annexure 'B' to the appeals which is the appeal memorandum filed by all the appellants herein before the Collector of Customs (Appeals), New Delhi. First para of the grounds of appeal in Annexure 'B' states in clear terms as follows :- (i) "Because the said arm in question has been sent to the Appellant by a friend residing abroad as a gift and no foreign exchange is involved." It is, therefore, clear that even if the appellants had submitted the application to the licensing authorities before despatch of the fire arms the CCP could not have been issued to the appellants because the import of fire arms by way of gifts in terms of para 158 of the Import Export Policy (April 1985 - March 1988) was permissible only from close relations which means father, mother, wife, husband, son, daughter or real brother or real sister. In these circumstances absolute confiscation of the fire arms is not unjustified inasmuch as the importation has taken place in gross violation of the provisions of the Import Trade Control Order as relaxed by para 158 of the aforesaid Import Export Policy. Accordingly, the appeals are rejected.