Judgment:
ORDER
Kanakaraj, J.
1. The petitioner-firm is engaged in the export of ready-made garments. They imported a consignment of stapling machines from Japan. Actually the goods are described as 'Max HD-10 Staplers' valued at Rs. 2,88,793.10 against four REP licences and sought clearance of the goods as Capital Goods in terms of paragraph 175 of the import Trade Control Policy for April-March 1978-79. The fourth respondent was of the opinion that under the said paragraph 175 only import of capital goods in Part-A of Appendix 2 in the said Policy for April-March 1978-79, was permitted. According to him the subject goods are ordinary small appliances used in offices, homes and shops. They are not used in industries. He therefore, felt the subject goods cannot be treated as capital goods or as packing machines falling under Serial No. 6(68) of Part-A of Appendix 2 referred to above. The goods being in the nature of consumer goods falling under Serial No. 750 of Appendix 3 of the I.T.C. Policy, they were banned for import. After issuing a show cause notice and getting explanation of the petitioner he passed an order on 10.8.1979 confiscating the goods under Section 111(d) of the Custom Act (hereinafter called 'the Act') read with Section 3(2) of the Imports and Exports (Control) Act, 1947. He gave the petitioner an option to redeem the goods on payment of a fine of Rs. 4,30,000/- and levied a personal penalty of Rs. 10,000/-. However, on appeal to the third respondent, the petitioner succeeded. The 3rd respondent came to the conclusion that the subject goods were classifiable under capital goods/packing machines. The appeal was therefore allowed on 14.3.1980. The fourth respondent preferred a review under Section 131(3) of the Act and after the amendment to the Customs Act, the same was transferred to the second respondent and treated as an appeal under Section 131(B) of the Act. The second respondent, in turn, set aside the order of the third respondent and restored the order of the fourth respondent. However, the personal penalty of Rs.10,000/- was deleted, upholding the order of confiscation and the levy of redemption fine. It is this order of the second respondent which is sought to be quashed in this writ petition.
2. A counter affidavit has been filed by the respondents stating that the subject goods do notconform to the description of either capital goods or packing machines. The definition of the words'capital goods' indicates a plant, machinery, equipment or accessories required by an investor for theproduction of goods or for rendering services including those required for replacing or expansion. Theyalso refer to the meaning of the words 'capital goods' in the Webster's Third New InternationalDictionary which is as follows:
Accumulated goods deposited to the production of other goods; facilities or goods used as factors of production.
They also point out that the words 'stapling machine' are misleading because the Max Staplers imported by the petitioner are merely manually operated appliance for attaching sheets of papers with wire pins called staple pins. The subject goods do not really bring into being or produce any other goods. The staplers are used only for fastening sheets of papers or fastening small bags and packets. The type of goods which had been imported by the petitioner are widely used in the houses and offices for purposes totally unconnected with packing in an industry. These staplers are purchased in the shops of general merchandise and in stationery shops. It is contended that no reasonable person looking at this handy small fastening device would call them a plant or machinery for the production of goods. It is also pointed out that nearly two lakhs of pieces are sought to be imported soon after the import of 2,12,500 pieces in the previous three consignments. Such a large importation of the staplers show that there is no bona fide use in the production activity of the petitioner. Alternatively, the staplers cannot be called as packing machines and can be treated only as consumer goods. Therefore, they are not covered by REP licences. The contention of the petitioner that a stapler should be equated to a packing machines would lead to absurd consequences. The respondents therefore, contend that the impugned order of the second respondent dated 1.11.1985 is perfectly legal and not liable to be quashed by this Court. It is also contended in the counter affidavit that the question relates to classification of the articles and the petitioner cannot seek to challenge the classification in a proceeding under Article 226 of the Constitution of India. It is pointed out that under the provisions of the Act, if at all, a reference application should have been filed if there is any question of law.
3. The only contention that is urged before me, is, that the issue involved in this case, is squarelygoverned by the judgment in W.A. No. 451 of 1985 dated 28.6.1985. A careful perusal of the judgmentof the Division Bench in WA No. 451 of 1985 shows that the Division Bench was concerned with totallya different issue. In that case the assessee imported staple pins. The question was whether the staplepins will fall under the Heading 73.31 under the Chapter 'Iron and steel and articles thereof orwhether they will fall under the Heading 83.01/15(2) under the Chapter 'Miscellaneous articles of basemetal.' The department in that case wanted to bring the staple pins under the heading 83.01/15(2)whereas the assessee wanted to bring the staple pins under heading 73.31. The Division Bench posedthe question 'The controversy between the parties is under which heading the staples imported by therespondents fell.' The Division Bench came to the conclusion that Chapter 73 of the Customs TariffAct dealt with iron and steel articles whereas Chapter 83 dealt with Miscellaneous articles of base metalafter referring to this aspect of the case. The Division Bench observed.
Looking from this point of view, we are inclined to held that the staples imported by therespondent, would fall only under Heading 73.31. This conclusion of ours is supported by the notegiven in Chapter 83..
4. I have already referred to the issue before me, which is, whether the staplers imported in this case can be treated as capital goods or packing machines in terms of paragraph 175 of the I.T.C. Policy 78- 79. Both the counter-affidavit as well as the impugned order clearly describe the staplers imported under the subject consignment as small appliances used in offices, homes and shops, and come under the category of consumer goods falling under Serial No. 750 of appendix 3 of the I.T.C. Policy. I am therefore, unable to accept the contention that the judgment in Writ Appeal No. 451 of 1985 will govern the facts of this case. I accept the description of the goods as found in the counter affidavit and hold that they are consumer goods falling under Serial 750 of Appendix 3 of the I.T.C. Policy 1978-79 and therefore are banned for import. The size of the staplers clearly indicates that they are not automatic stapling machines which are bigger in size and which only are used in industries. Secondly, a large quantity of staplers imported by the petitioner indicates that they are only consumer goods and not capital goods. I have no material before me to hold otherwise and invalidate the order of the second respondent dated 1.11.1985. The question of classification arising out of factual consideration cannot be undertaken by this Court especially when a competent Tribunal has analyzed the facts and come to a particular conclusion, which is not shown to be illegal or perverse. Consequently, the writ petition fails and is dismissed. However, there will be no order as to costs.