1961 (4) TMI 83 - SC - Customs

Supreme Court upholds High Court's tariff classification decision on imported fountain pens.

AV. VENKATESWARAN, COLLECTOR OF CUSTOMS, BOMBAY Versus RAMCHAND SOBHRAJ WADHWANI AND ANOTHER

The Supreme Court upheld the High Court's decision to classify imported fountain pens under Item 45(3) for tariff purposes, rejecting the Customs ... Whether the High Court should have rejected the writ petition of the respondent in limine because he had not exhausted all the statutory remedies open to him for having his grievance redressed? Held that:- On the whole and taking into account the peculiar circumstances of this case that the High Court has not exercised its discretion improperly in entertaining the writ application or granting the relief prayed for by the respondent and that no case for interference by us in an appeal under Article 136 of the Constitution has been made out. The appeal fails and is dismissed Issues Involved:1. Classification of imported fountain pens for tariff purposes.2. Jurisdiction and interpretation of Customs authorities.3. Exhaustion of statutory remedies before seeking writ jurisdiction.4. Appropriateness of issuing writs of mandamus or certiorari.Detailed Analysis:1. Classification of Imported Fountain Pens for Tariff Purposes:The primary issue was the classification of imported fountain pens for tariff purposes. The respondent argued that the imported fountain pens should be classified under Item 45(3) of the Indian Tariff Act, 1934, which pertains to 'fountain pens complete' and attracts a duty of 30% ad valorem. Conversely, the Customs authorities classified the pens under Item 61(8), which covers 'articles plated with gold or silver' and attracts a duty of 78.3/4% ad valorem. The Supreme Court agreed with the High Court's interpretation that the pens fell under Item 45(3), noting that 'fountain pens complete' should not be excluded from this category merely because they have gold-plated parts. The Court emphasized that gold plating on nibs is common and serves a functional purpose rather than merely adding value.2. Jurisdiction and Interpretation of Customs Authorities:The Customs authorities' decision to classify the pens under Item 61(8) was challenged on the grounds of jurisdiction. The High Court held that the Customs authorities' interpretation was unreasonable and perverse. The Supreme Court agreed, stating that the interpretation of the tariff items by the Customs authorities was not reasonable and that the pens should be classified under Item 45(3). The Court noted that the Assistant Collector of Customs and the Collector of Customs had jurisdiction to interpret the tariff items, but their interpretation was erroneous.3. Exhaustion of Statutory Remedies Before Seeking Writ Jurisdiction:The respondent did not exhaust the statutory remedy of filing a revision to the Central Government under Section 191 of the Sea Customs Act before approaching the High Court. The Supreme Court acknowledged the general rule that a writ should not be entertained if an alternative remedy is available, but emphasized that this rule is discretionary and not absolute. The Court cited previous judgments to support the view that the existence of an alternative remedy does not bar the jurisdiction of the High Court to issue a writ. The Court found that the High Court did not improperly exercise its discretion in entertaining the writ petition, considering the manifestly erroneous levy of duty and the respondent's inability to pursue the alternative remedy due to time constraints.4. Appropriateness of Issuing Writs of Mandamus or Certiorari:The High Court issued a writ of mandamus directing the Customs authorities to release the goods upon payment of duty at the rate specified in Item 45(3). The Supreme Court upheld this decision, noting that while the Customs authorities had jurisdiction to interpret the tariff items, their interpretation was grossly erroneous. The Court emphasized that the discretion to issue a writ of mandamus was properly exercised by the High Court, given the circumstances of the case.Minority Judgment:The minority opinion, delivered by Sarkar, J., argued that the writ should have been refused on the ground that the respondent had another remedy available under Section 191 of the Sea Customs Act. Sarkar, J., contended that the Customs authorities had jurisdiction to classify the goods and that their decision, even if erroneous, was within their jurisdiction. He also questioned the appropriateness of issuing a writ of mandamus, suggesting that a writ of certiorari might have been more suitable. Ultimately, Sarkar, J., concluded that the assessment under Item 61(8) was proper and would have allowed the appeal.Conclusion:The Supreme Court, by majority, dismissed the appeal and upheld the High Court's decision to classify the imported fountain pens under Item 45(3) and to issue a writ of mandamus. The Court emphasized the discretionary nature of the rule requiring exhaustion of alternative remedies and found no improper exercise of discretion by the High Court in entertaining the writ petition. The minority opinion, however, argued for the dismissal of the writ on procedural grounds and upheld the Customs authorities' classification under Item 61(8).