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of <h1>Supreme Court Upholds Customs Classification of Oats</h1> <h3>COLLECTOR OF CUSTOMS, MADRAS Versus K. GANGA SETTY</h3> COLLECTOR OF CUSTOMS, MADRAS Versus K. GANGA SETTY - 1999 (110) E.L.T. 221 (SC) Issues:Nature and extent of jurisdiction possessed by the High Court in considering the validity of an order of the Customs Authorities interpreting the provisions of the entries in the Tariff Schedule regarding the imposition of duties.Analysis:The case involved the import of oats from Australia described as 'standard feed-oats' and the proper classification of these goods under the Import Trade Control Schedules. The dispute centered around whether the oats fell under Item 42 or Item 32 of the Circular. The Customs Authorities insisted on a license for clearance under Item 32, leading to a penalty and confiscation of the goods. The respondent contended that oats should be classified as fodder under Item 42, citing specific usage for feeding racehorses and a misleading response from the Deputy Chief Controller of Imports, Madras. The Single Judge dismissed the application for a writ of mandamus, but a Division Bench allowed the appeal, directing against the fines and penalties imposed.The Division Bench's decision was based on two grounds: the classification decision of Customs Authorities is subject to judicial review, and in this case, oats imported as horse feed should be classified under Item 42 as fodder. The Judges referenced the response from the Deputy Chief Controller as indicative of departmental doubts on the matter. However, the Supreme Court disagreed with this interpretation, emphasizing the limited jurisdiction of the Court in such matters. The Court cited a previous case to establish that interference is only permissible if the Customs Authorities' construction is unreasonable or perverse. In this case, the decision to classify oats as grain under Item 32 was deemed rational and supportable.The Supreme Court further clarified that the specific reference to 'oats' in Entry 32 distinguishes oats from other grains, and the Judges of the High Court erred in not considering this distinction. The Court also addressed the respondent's claim of being misled by the Deputy Chief Controller's response, highlighting the lack of clarity in the communication. While acknowledging the potential for the respondent being misled, the Court did not make a specific finding on this matter but suggested that authorities could consider this in modifying penalties. Ultimately, the Supreme Court allowed the appeal, setting aside the High Court's order and dismissing the respondent's application under the Specific Relief Act, with each party bearing their own costs.
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