Warehoused goods transfer rules upheld where security guidelines regulated discretion without unlawfully fettering it.

Goods treated as warehoused at Bombay and then moved to another warehouse were covered by the statutory scheme for removal of warehoused goods from one warehouse to another, even though physical warehousing at Bombay had been waived for convenience. Public notices requiring bank guarantee and transit security were valid because the Customs Act and the Warehoused Goods (Removal) Regulations, 1963 permitted security in addition to bond, and the notices functioned as guidelines to regulate discretion, prevent evasion, and promote uniformity. The graded security requirements were held reasonable and non-arbitrary, so the challenge to the notices failed.

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Issues: (i) Whether the provisions governing removal of warehoused goods from one warehouse to another applied where goods were directly sent to a warehouse outside Bombay after waiver of physical warehousing at Bombay; (ii) Whether the public notices requiring bank guarantee and transit security for such transfers were invalid for fettering the discretion of the proper officer or for being ultra vires and arbitrary.

Issue (i): Whether the provisions governing removal of warehoused goods from one warehouse to another applied where goods were directly sent to a warehouse outside Bombay after waiver of physical warehousing at Bombay.

Analysis: The documentary record showed that the so-called direct warehousing outside Bombay was effected only after the requirement of physical warehousing at Bombay had been waived for convenience and to avoid double handling. The importers' own bonds recited that the goods were treated as warehoused at Bombay and then permitted to move to another warehouse. The settled practice since 1975, together with the departmental communications, showed that these movements were in substance transfers of warehoused goods governed by the statutory scheme for removal to another warehouse.

Conclusion: The statutory provisions governing removal of warehoused goods from one warehouse to another applied, and the contention that they had no application failed.

Issue (ii): Whether the public notices requiring bank guarantee and transit security for such transfers were invalid for fettering the discretion of the proper officer or for being ultra vires and arbitrary.

Analysis: The scheme under the Customs Act and the Warehoused Goods (Removal) Regulations, 1963 permitted the proper officer to require security in addition to the bond. The Board's communications and the Collector's public notices were issued to secure uniformity, prevent evasion, and guide the exercise of discretion under the Regulations. They did not eliminate the statutory discretion of the proper officer, since the notices operated as guidelines and retained room for departure in appropriate cases. The classification of importers and the graded bank guarantee requirements were also held to be reasonable and non-arbitrary.

Conclusion: The public notices were valid and did not unlawfully fetter discretion, exceed the statutory power, or offend the principle of non-arbitrariness.

Final Conclusion: The challenge to the impugned public notices failed, and the writ petitions were dismissed with the rule discharged.

Ratio Decidendi: Where the statutory scheme authorises security for re-warehousing and the administrative instructions operate only as guidelines to regulate discretion and prevent arbitrariness, such instructions are valid and do not amount to an impermissible fetter on the discretion of the proper officer.

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