J 1966 SCC OnLine Cal 10 AIR 1967 Cal 16 2000 126 ELT Ayushmandubey Samityedu 20220212 133409 1 13

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1966 SCC OnLine Cal 10 : AIR 1967 Cal 16 : (2000) 126 ELT 507
Calcutta High Court

(BEFORE D.N. SINHA AND S.A. MASUD, JJ.)
Shaik Md. Omer … Appellant;

Versus
The Collector of Customs and others … Respondents.
A.F.O.O. No. 114 of 1965 (Matter No. 99/1965)
Decided on February 7, 1966
The Judgment of the Court was delivered by
SINHA, J.:— This is an appeal against an order of Banerjee, J., dated 30th April,
1965 whereby the learned Judge has discharged the rule taken out by the appellant
and made no order as to costs. The facts in this case are shortly as follows: The
appellant Shaik Md. Omer describes himself as an industrialist who is interested in
breeding and maintenance of pedigree horses. In his petition he says that he owns
several horses which are treated and kept as his pet animals & that he also owns race
horses & since 1950 he started breeding horses out of mares owned by him. He owns
two stallions by the name of Pieta and Rontgen. He further says that he has earned
considerable name and reputation as a race horse owner and for racing with the horses
bred by himself and he has won several prizes awarded for horse-racing. In
September, 1964 the appellant went to Europe and while in Switzerland he received a
letter dated October 5, 1964 from Messrs British Bloodstock Agency Ltd., London,
informing him that one of its clients was interested in obtaining a foal by his stallion
“Pieta” from the said client's Brood Mare. It was eventually agreed by and between the
appellant and the said Messrs British Bloodstock Agency Ltd., that one of its clients,
the Glasgow Stud Farm would lease a brown English mare to the appellant, which’
would be shipped to India and would be kept there pending her producing two foals by
the appellant's breeding race-horse ‘Pieta’ after which the mare would be returned to
England.
Page: 17
The petitioner returned to Calcutta on November 7, 1964 by air and submitted at Dum
Dum Airport an international passenger's Baggage Declaration indicating that 7
unaccompanied baggages would follow him by sea or air. Eventually, a brown mare by
the name of “Jury Maid” was shipped to Calcutta by S.S. “Chinkoa”, which was due to
arrive at Calcutta on or about December 25, 1964. On or about January 7, 1965 the
appellant through his clearing agents submitted to the Customs authority a second
Baggage Declaration for clearance of the said mare which was stated to be arriving at
the Port of Calcutta by the said S.S. “Chinkoa” on or about the middle of January,
1965. It was stated in the said Declaration Form that the said baggage comprised of
one brood mare, described as a “pet animal”, not for racing but for breeding purposes
only, pregnant and to be returned to the United Kingdom after she was in her next
pregnancy with a Stallion in India. He states that the said Baggage Declaration Form
was returned to the appellant with an endorsement dated January 12, 1965, as
follows:
“It is not a case of unaccompanied baggage. The importation cannot be treated

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as of a pet animal. The party may file Bill of Entry in Group I for clearance.”
2. It is stated that in order to facilitate expeditious clearance of the said mare twin
the ship immediately upon her arrival in Calcutta, the appellant executed a bond in
favour of the Collector of Customs, Calcutta, dated January 14, 1965, undertaking to
submit the Bill of Entry and the relative documents within 48 hours of the delivery of
the said mare from the said ship and further undertaking to pay a sum of Rupees
15,000 on the appellant's failure to do so. This bond was accepted on January 16,
1965 subject to the condition that after off-loading, the Preventive Officer of the
Customs would accompany the mare to the Government Veterinary College, Belgachia
and the animal would remain there under Customs guard until the bond was
redeemed. The mare arrived at Calcutta on January 18, 1965 and was admitted by the
appellant into the Bengal Veterinary College Hospital in terms of the said bond. There
was, however, a guard kept on behalf of the Customs authority to see that the mare
was not removed. There was no Customs clearance permit issued, permitting the
clearance of the mare. On January 20, 1965, the appellant submitted a Bill of Entry
estimating the value of the animal at Rs. 5807.03 nP. Along with the Bill of Entry a
certificate was annexed as given by the Additional Director of Animal Husbandry,
Lucknow, U.P. Thereafter, the Customs Appraiser directed him to produce certain
documents including the import trade control licence. The appellant could not produce
such a licence for the simple reason that he did not have one. He however, contended
that no such licence was required as the mare was a “pet animal” and could be
imported without a licence under the provisions of the passengers (Non-Tourist)
Baggage Rules. On the 1st February, 1965 the Assistant Collector of Customs issued a
show cause notice which is annexure I to the petition and appears at pages 35 to 36 of
the Paper Book. Firstly, it states-that the imported mare was a high pedigree animal
used for breeding purposes and the value was under-estimated. No proper certificate
from the Director of Animal Husbandry of the State of West Bengal had been
produced. Secondly, the importation of such a horse required an I.T.C. licence but no
such licence had been produced. The goods, therefore, had been imported in
contravention of Government of India, Ministry of Commerce and Industries Order No.
17/55 dated 7th December, 1955 read with Section 3(1) of the Imports and Exports
(Control) Act, 1947. The notice concluded as follows:
“You are called upon to show cause to the Collector of Customs within -7 days
from the date of issue why the goods should not be confiscated and action taken
against you under Section 3(2) of the Imports and Exports (Control) Act, you are
also asked to state whether you would require to be heard in person. If you desire a
personal hearing, this can be arranged by previous appointment with the Collector
of Customs. All corroborative evidence in support of your explanation should be
furnished along with your explanation.”
3. The petitioner showed cause in writing. The stand taken was that the brood mare
which had been imported was a ‘pet animal’ and could be imported without any import
Trade Control restrictions, in terms of the Import Trade Control, Government of India,
Ministry of Commerce and Industry Public Notice No. 1-ITC (PN)/61 dated the 2nd
January, 1961. This is a notification relating to the baggage rules mentioned above.
The appellant was heard before the Collector of Customs but he disallowed the
contention of the appellant by his order dated 15th March, 1965, a copy whereof is
annexure ‘O'to the petition and is set out at pages 51 to 53 of the Paper Book. In the
said order it was held that the importation was as a result of a business dealing and it
was not the case of the importation or a ‘pet animal’ by a passenger which would be
covered by the exemption granted by the Baggage Rules. The relevant part of the
order is set out below:
“Shri S.M. Omer of 29, Weston Street, Calcutta imported a Brood Mare at this
port but could not produce any I.T.C. licence covering its importation. The import
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was, therefore, considered as unauthorised as having been made in contravention of

Section 3(1) of the Imports and Exports (Control) Act, 1947 read with S. 3(1) of
Order No. 17/55 dated 7th December, 1955 issued by the late Ministry of
Commerce and Industry, Government of India a prohibition which is deemed to
have been imposed under Section 11 of the Customs Act, 1962. Accordingly, the
importer was called upon vide this Custom House Memo No. 837G-Gr. 1/- 4/65A
dated 1st February, 1965 to show cause why the goods should not be confiscated
and action taken against him under Sections 111(d) and 112 of the Customs Act,
1962. In the said Memo, the importer was also given an opportunity of personal
hearing.
…… …… ……
I have gone through the submissions made by Shri S.M. Omer. As regards the
contravention of I.T.C. restrictions, Shri Omer's defence
Page: 18
was that pet animals are allowed to be imported by passengers without I.T.C.
restrictions. It is true that pet animals brought in by passengers are exempt from
I.T.C. restrictions, out in the circumstances of this case I am unable to accept that the
mare in question is a pet animal of Shri Omer. The mare does not belong to Shri
Omer. It has been leased to Shri Omer for producing two foals in India and later return
to England duly tested positively pregnant to Pieta. It is quite clearly a business deal
and not a case of importation of a pet animal. In this connection, it is also relevant
that pet animals of passengers for purposes of I.T.C. exemption would be those which
passengers carry with them even during their travels and which invariably stay with
the passengers in their houses. From that point of view too, this particular animal
cannot be considered as a pet brought by a passenger. Under the circumstances an
offence warranting penal action under Section 111(d) of the Customs Act is clearly
established. Since Shri Omer arranged for the importation of this animal he rendered
himself liable for action under Section 112 of the Customs Act, 1962.
In view of the foregoing, I confiscate the animal in question under Section 111
(d) of the Customs Act, 1982 read with Section 3(2) of the Imports and Exports
(Control Act) 1947, as amended. I also impose on Shri S.M. Omer a personal
penalty of Rs. 5000 (Rs. Five Thousand only) under Section 112 of the Customs
Act, 1962, for having imported this mare in contravention of the I.T.C. restrictions.
The personal penalty will have to be deposited in the Customs House Treasury
within 10 days.”
4. Thereupon, the appellant made an application under Article 226 of the
Constitution, inter alia asking for a writ in the nature of mandamus directing the
respondents in the said application not to give any effect to the confiscation order but
to return the mare to the appellant and for other reliefs. This application came up for
hearing before Banerjee, J., and was unsuccessful as stated above. Several points
were taken in the court below, but before us only two points were taken which are as
follows; The first point taken is that the mare was imported as the personal baggage
of the appellant and as such was not subject to import trade control restrictions, under
clause 4 of the Government of India, Ministry of Commerce and Industries, Import
Trade Control Public Notice No. 1 I.T.C.(PN)/61 dated 2nd January, 1961. The second
point is that under section 125 of the Customs Act, 1962 (Act 52 of 1962), it was
incumbent on the customs authority to give to the appellant an option to pay in lieu of
confiscation such fine as it was thought Fit to impose, before confiscation of the mare.
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No such opportunity was given and a confiscation was made straightway, which is
contrary to law and should be struck down. It may be added here that since the order
was made in the court below, the mare “Jury Maid” has died after giving birth to a
foal. Now the dispute has taken a new dimension, inasmuch as, if the confiscation
order stands, the foal belongs to the Customs authority. Otherwise, it must be
returned to the appellant. There is a dispute going on as to the custody of the foal, but
that is not necessary to be diseussed here. Before I proceed to consider the two points
taken above, it is necessary to notice certain provisions of the Customs Act, 1962 and
the Imports and Exports (Control) Act, 1947 both of which are applicable to the facts
of the present case. The Customs Act, 1962 (hereinafter referred to as the ‘said’ Act)
came into operation on the 13th December, 1962 and has inter alia repealed the whole
of the Sea Customs Act, 1878, (Act VIII of 1878). The first provision to be considered
is the definition in Section 2(33) of the said Act which defines the expression
“prohibited goods”. The said definition is as follows:
“(33) “prohibited goods” means any goods the import or export of which is
subject to any prohibition under this Act or any other law for the time being in force
but does not include any such goods in respect of which the conditions subject to
which the goods are permitted to be imported or exported have been complied
with.”
5. The next section is Section 11 of the said Act which is contained in Chapter IV,
with the heading “Prohibitions on importation and exportation of goods”. Sub-section
(1) runs as follows:
“11(1) If the Central Government is satisfied that it is necessary so to do for any
of the purposes specified in sub-section (2), it may, by notification in the Official
Gazette, prohibit either absolutely or subject to such conditions (to be fulfilled
before or after clearance) as may be specified in the notification, the import or
export of goods of any specified description.”
6. Sub-section (2) specifies certain “purposes” referred to in sub-section (1). So far
as section 11 is concerned, there are only two notifications that could be discovered
and which are set out at pages 307 to 309 of the Commentary on the Customs Act by
A.N. Nanda (2nd Edn). There is no provision therein which would cover the case of the
importation of a mare. The next provision to be considered is Section III of the said
Act which is in Chapter XIV under the heading “Confiscation of goods and conveyances
and imposition of penalties”. The relevant provision therein is as follows:
“111. The following goods brought from a place outside India shall be liable to
confiscation:
xxx xxx xx
(d) any goods which are imported or at tempted to be imported or are brought
within the Indian customs waters for the purpose of being imported, contrary to any
prohibition imposed by or under this Act or any other law for the time being in
force.
7. Section 112 of the said Act deals with penalties for improper importation of
goods. Finally we come to Section 125 of the said Act, the relevant provision whereof
is as follows:
“125(1) Whenever confiscation of any good is authorised by this Act, the officer
adjudging it may, in the case of any goods, the importation or exportation whereof
is prohibited under this Act or under any order law for the time being in force, and
shall, in the case of any other goods,
Page: 19
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give to the owner of the goods an option to pay in lieu of confiscation such fine as the
said officer thinks fit……”
8. It may here be mentioned that 8, 11 set out above is a section which has come
into the said Act, inter alia in place of Section 19 of the Sea Customs Act, 1878.
Section 19 of the Sea Customs Act, 1878 was in the following terms:
“Power to prohibit or restrict importation or exportation of goods.
9. The Central Government may from time to time, by notification in the Official
Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any
specified description into or out of India across any customs frontier as defined by the
Central Government.”
10. I now come to the provisions of the Imports and Exports (Control) Act, 1947.
This is stated to be an Act to continue for a limited period power to prohibit or control
imports and exports, The relevant Section is S. 3(1) and (2) which runs as follows:
“3. Powers to prohibit or restrict imports and exports (1) The Central Government
may, by order published in the Official Gazette, make provisions for prohibiting,
restricting or otherwise controlling, in all cases or in specified classes of cases, and
subject to such exceptions if any, as may be made by or under the order:
(a) the import, export, carriage coastwise or shipment as ships stores of goods of
any specified description;
(b) the bringing into any port or place in India of goods of any specified
description intended to be taken out of India without being removed from the
ship or conveyance in which they are being carried.
(2) All goods to which any order under sub-section (1) applies shall be deemed
to be goods of which the import or export has been prohibited or restricted under
Section 19 of the Sea Customs Act, 1878 (VIII of 1878) and all the provisions of
that Act shall have effect accordingly, except that S. 183 thereof shall have effect
as if for the word “shall” therein the word “may” were substituted.
xx xx xx”
11. Section 5 deals with penalty in the case of contravention or attempted
contravention of any order made under the Act. In exercise of the powers conferred by
Section 3 of the Imports and Exports (Control) Act, 1947, the Government or India
has promulgated an order known as the Imports (Control) Order, 1955 dated 7th
December, 1955. The relevant part of the said order for our purposes is clause 3(1)
which runs as follows:
“3. Restriction on Import of certain Goods (1) Save as otherwise provided in this
order, no person shall import any goods of the description specified in Schedule I,
except under, and in accordance with, a licence or a customs clearance permit
granted by the Central Government or by any officer specified in Schedule II”
12. The relevant Entry is to be found in Item I of Schedule I in Part IV which is as
follows:
‘Serial Name of Item of First Schedule to Indian Tariff Act, 1934.
No. Article.
1. 2. 3.
Part IV.
1. Animals, I and I(1).”
living all
sorts
13. Section 75 of the Sea Customs Act, 1878 empowered the Chief Customs
Authority to make rules with regard to baggage and mails. In exercise of the said
power, the Central Board of Revenue promulgated the “Passengers (Non-Tourist)
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Baggage Rules” by notification No. 122 dated 19-11-1960. Under the said notification,
the personal baggage of a passenger may be exempted from customs duty upto the
extent specified in the said notification;. This includes things like personal wearing
apparel, articles of personal use, instruments, apparatus or appliances used in the
profession or calling of a passenger, personal jewellery not exceeding Rs. 2000 in
value and articles not exceeding Rs. 500 in value which could be reasonably treated as
baggage or are of a kind normally used for making gifts or as souvenirs. By a
notification by the Government of India, Ministry of Commerce and Industries, Import
Trade Control Public Notice No. 1— ITC (PN)/61 dated 2-1-1961 the above mentioned
notification of the Central Board of Revenue dated 19-11-60 was explained. The
relevant part is Cl. 4 which runs as follows:
“4. The clearance of one dog, pet animals and birds in a limited number may be
allowed without Import Trade Control restrictions on furnishing the following health
certificates to the Customs authorities:
(i) A health certificate from a veterinary Officer authorised to issue a valid
certificate by the Government in the country of export to the effect that the
dog imported is free from Aujossky's disease, Distemper, Rabies,
Leishmaniasis and Leptospirosis and in the case of cats from Rabies and
Distemper.
(ii) In the case of import of dogs and cats originating from countries where
Rabies infection is known to exist, a health certificate containing a record of
vaccination, the vaccine used, brew of the vaccine and the name of the
production laboratory & to the effect that the dog/cat was vaccinated against
Rabies more than one month, but within 12 months prior to actual
embarkation with nervous tissue vaccine or within 36 months prior to actual
embarkation with chicken embryo vaccine, both vaccines having previously
passed satisfactory potency tests.
(iii) In the case of parrots, a certificate to the effect that the parrots were
subjected to a compliment fixation test for Psittacosis with negative results
within 30 days prior to actual embarkation.”
14. The first point taken in this case, directly involves clause 4 of the last-
mentioned notice issued by the Government of India as set out above. Briefly put, the
argument is that the mare “Jury Maid” was imported by the appellant and is excluded
from import trade control restrictions under clause 4, as it comes within the heading
“pet animals”. In order to consider this point, it would be necessary also to refer
Page: 20
to a public notice of import policy issued in the year April 1964 to March 1965
published in the Gazette of India Extraordinary dated 31-3-64 which is as follows;
“Part and Description. Licensing Policy for Validity of Remarks.

S. No of Authority. Established Licenses.
I.T.C., Importers.
Schedule.
1 Animals, Ports/CCI. Nil. Twelve (i) … …
living all months. (ii)
sorts. Applications
from stud
farms for
import of
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horses for
breading
purposes will
be considered
with-in a
limited
ceiling.
Applications
for import
licenses
should be
submitted to
C.C.I. not
later than the
31st May,
1064.”
15. The appellant does not come within the ‘Remarks’ Column as he has no stud-
farm, as mentioned therein.
16. It will be recollected that even before the mare arrived in Calcutta, the
appellant gave notice to the Customs authority that one of the Items in his baggage
would be the mare in question. If the importation of the mare is covered by clause 4 of
the said notice No. 1 ITC (PN)/01 dated 2-1-61 then, of course, no question of import
trade control restriction arises and the mare would be entitled to be imported without
any license and without any duty. Therefore, the solution of the problem turns round
the question as to whether the mare “Jury Maid” can be called a “pet animal” within
the meaning of clause 4. The argument is that horses are kept as pets and, therefore,
they come within the scope of the expression “pet animals”. This argument has been
rejected by the court below and we do not think that it is a valid contention. As will
appear from the facts set out above, the importation of the mare was purely a
business proposition. The appellant deals in horses, especially racing horses. It was
intended that he would take a lease of the mare “Jury Maid” and it would be
impregnated by his stallion “Pieta” and then it would be returned to its owner together
with the foals. This operation would be within the ordinary scope of the appellant's
business. The word “pet” has been defined in various recognised dictionaries, inter
alia, as follows:—
Concise Oxford Dictionary of Current “Animal tamed and kept as favourite or
English. treated with fondness”
The Shorter Oxford Dictionary. “Any animal that is domesticated or
tamed and kept as a favourite or treated
with fondness, esp. applied to a lamp
reared by hand.”
Chamber's Twentieth Century Dictionary. “Any animal tame and fondled.”
17. There is no such species of animal known as “pet animal”. What happens is that
certain kind of animals or birds are often domesticated and when a particular person
becomes fond of such an animal or bird it may be said to have become a “pet” of that
person, and may be called a ‘pet animal’ It is a subjective expression. In the present
case, the mare “Jury Maid” was not the “pet” of any particular person. So far as the
appellant is concerned, he had not even seen the mare when it arrived in India. It
cannot be said that he became fond of it at any relevant point of time. In actual life we
find that men have at times become fond of strange animals like lions, tigers and even
crocodiles. It was not intended to make the baggage rules a warrant for transforming
passenger ships into a Noah's Ark. ‘Pet animals' in clause 4 means an animal usually
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kept as a pet, like dogs, cats and even horses. But in order to qualify, not only should
the animal belong to such a class, but must be the pet of a particular person.
18. The position seems to be quite clear. Section 3 of the Imports and Exports
(Control) Act, 1947 gives power to the Central Government to make provisions for
prohibiting, restricting or otherwise controlling the bringing into any port or place in
India of goods of any specified description. Under the Imports (Control) Order 1955,
Part IV Item I of Schedule I, no living animals can be imported without a license or
customs clearance permit granted by the Central Government or by any officer
specified in Schedule II. Next we come to the import policy notice dated 31st March,
1964 set out above by which it is laid down that there was to be no relaxation for
established importers even, but application from stud farms for import of horses for
breeding purposes will be considered within a limited ceiling. In such a case, however,
an import license would have to be obtained. The appellant does not come within that
description, for he is not an owner of a stud farm for breeding of horses. In my
opinion, the Passengers (Non-Tourist) Baggage Rules do not apply at all because those
rules are made unaer Section 75 of the Sea Customs Act, 1878. But even if the said
Baggage Rules, as well as the Public Notice No. 1 ITC (PN)/61 are applicable to this
case, in my opinion, the mare “Jury Maid” does not come under the description “pet
animals” under clause 4 of the said notice and, therefore, was not exempted from
import trade control restrictions. In other words, in order to import the said animal,
the obtaining of a license under the Imports and Exports (Control) Act, 1947 read with
the Imports (Control) Order 1955 was an essential pre-condition.
19. I now come to the second point argued on behalf of the appellant. That point
may briefly be stated as follows: It is argued the under Section 111(d) of the said Act,
any good which are imported contrary to any “prohibition”
Page: 21
imposed by or under the said Act or any Other law for the time being in force, would
be liable to confiscation. The prohibition, if any, is under Sections (1) and (2) of the
Imports and Exports (Control) Act, 1947 read with clause 3 of the Imports (Control)
Order, 1955 read with the Schedule set out above. It is argued that under Section 3 of
the Imports and Exports (Control) Act, 1947 the heading is “powers to prohibit or
restrict imports and exports”. Under sub-section (1) of Section 3 of the Imports and
Exports (Control) Act, 1947, three expressions are used “prohibiting”, “restricting” and
“otherwise controlling”. It is argued that these are three different categories
altogether. In other words, ‘prohibition’ means absolute prohibition which is to be
differentiated from restriction or control. Coming now to clause 3 of the Imports
(Control) Order, 1955 it is pointed out that the heading is “restriction on import of
certain goods”. Sub-clause (1) provides that in the case of restricted goods, a license
or customs clearance permit must be obtained as a pre-condition of import. It is
argued that the word “restriction” used in the heading shows that the obtaining of a
license is not a prohibition as contemplated in sub-section (1) of Section 3 of the
Imports and Exports (Control) Act, 1947. Finally, it is argued that under Section 111
(d) of the said Act, there can be a confiscation only if there is an import contrary to
any “prohibition” imposed by any law for the time being in force. It is contended that
in this case there is no prohibition but only restriction. Attractive as this argument
may seem, it does not seem to me acceptable for the following reasons: We are
concerned in this case with the word “prohibition” used in Section 111(d) of the
Customs Act, 1962. I have already set out above the definition of “prohibited goods”
given in Section 2(33) of the said Act. It states that goods in respect of which the
conditions subject to which the goods are permitted to be imported or exported have
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been complied with are not to be considered as “prohibited goods”. This clearly means
that where there is a prohibition with a condition and the condition has not been
complied with it will come within the definition of prohibited goods”. It is true that in
Section 3(1) of the Imports and Exports (Control) Act, 1947 three expressions are
used namely,.prohibiting”, “restricting” and “otherwise controlling”, but it is not
difficult to come to the conclusion that restriction or control which imposes a condition
on import is prohibition subject to a condition, and if the condition is not complied
with: then the goods are prohibited goods, in terms of Section 111 of the said Act. So
far as the said Act is concerned, there can be no doubt that this is the intention of the
legislature. As I have stated above, Section 11 in the said Act has on in, inter alia in
place of Section 19 of the as Customs Act, 1878. The heading of Section 19 was
“power to prohibit or restrict the Importation or exportation of goods”. While it) that
section, both the expressions “prohibit” and “restrict” had been used, in the repealing
Section 11(1), we have mention of absolute prohl-jbition or prohibition subject to
conditions. It is Rllear, therefore, that the word “restriction” has Wow been replaced by
the expression “prohibition” subject to such conditions as may be specified. That this
is a correct way of interpreting these expressions, appears from several decisions
which have been cited before us. The first case which is almost on all fours with the
point in the instant case, is a decision of The Kerala High Court Bernado Steenholf
Ultrich v. Collector of Customs, Cochin, AIR 1960 Ker 170. In that case the facts were
as follows:
The petitioner, a national of Bolivia, was a passenger from Colombo to Genoa on

the Italian passenger vessel M.V. Australia, which called at Cochin during its voyage
to Genoa. The customs authorities got information that he was smuggling currency.
At Cochin, the customs officers boarded the vessel and asked the petitioner to
declare if he had any currency. He stated that he did not have anything to declare,
excepting a small sum in his possession. Upon investigation it was found that he
was taking with him in the ship, a motor car in which there was a secret chamber in
which was concealed more than three lakhs of Indian currency, as also a large
amount of American dollars. Thereupon, the same was confiscated. It was inter alia
argued that under Section 167(73) of the said Act, there could be confiscation only
if the importation of the goods was prohibited. It was argued that prohibition meant
absolute prohibition under Section 18 of the Sea Customs Act, 1878 and did not
apply to goods like currency in respect of which there was only a restriction. Nayar,
J., said as follows:—
“It is argued that apart from dutiable goods (of which there is no question in
this case) this item speaks only of prohibited goods and that therefore it can
apply onlv to goods in respect of which there is an absolute prohibition under
Section 18 and not to goods like currency in respect of which there is only a
restriction under Section 19 of the Sea Customs Act. It is also pointed out that
both the heading of Section 8 of the Foreign Exchange Regulation Act and the
body of Section 23A of that Act refer to what is imposed by Section 8 as a
restriction and not as a prohibition.
But every restriction is a partial prohibition, and in fact, both S. 8 itself and
the notification issued under sub-section (1) thereof are worded in the form of a
prohibition. They impose a prohibition except in cases where the general or
special permission of the Reserve Bank has been obtained. Under Section 19 of
the Sea Customs Act, the Central Government may prohibit or restrict the
importation or exportation of goods, and I see little difficulty in viewing the so-
called restrictions under Section 8 of the Foreign Exchange Regulation Act as
prohibitions. It is not as if it is importation or exportation above a specified
quantity or in a particular manner that is forbidden—all importation and
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exportation is forbidden—unless there is the general or special permission of the

Reserve Bank.
All this apart, it seems to me that the tern) “prohibited goods” in item 78
under Section 167 of the Sea Customs Act is only a compendious way of
describing (to borrow the language of the first paragraph of item 8), goods the
importation or exportation of which is, for the time
Page: 22
being, prohibited or restricted by or under Chapter IV of the Act.”
20. Coming now to the facts of the instant case, clause 3 of the Imports (Control)
Order 1055 prohibits the importation of certain goods except in accordance with a
licence or customs clearance permit. As explained in the decision above mentioned,
such restrictions may be considered as a prohibition subject to a condition and where
the condition has not been satisfied, the goods are prohibited goods. In other words,
where the importation of certain goods is prohibited except under a licence, and no
licence has been obtained, then it may be said that the goods are “prohibited goods”
and, therefore, under Section 111(d) of the said Act the said goods are liable to
confiscation. Light is thrown upon this point by several other decisions cited before us
the Supreme Court decision, State of Maharashtra v. Mayer Hans George AIR 1965 SC
722 the court was considering Section 8(1) of the Foreign Exchange Regulation Act,
1947 which prohibited the bringing of gold etc. into India except with a special or
general permission of the Reserve Bank and after satisfying the conditions if any
prescribed therefor.
21. In exercise of the powers conferred by the said section on the Central
Government, a notification was issued on 25th August, 1948 to the effect that except
with the general or special emission of the Reserve Bank no person shall ring or send
into India, any gold etc. The Reserve Bank issued notification dated 25th August, 1948
whereby conditions were laid down for granting permission for the importation of gold
etc. The object of citing this decision is to consider how the Supreme Court viewed the
case of a prohibition with a condition attached. This is how Ayyangar, J. puts it:
“When one turns to the main provision whose contravention is the subject of the
penalty imposed by Section 23(1-A) viz., Section 8(1) in the present context, one
reaches the conclusion that there is no scope for the invocation of the rule of mens
rea. It lays an absolute embargo upon persons who without the special or general
permission of the Reserve Bank and after satisfying the conditions, if any,
prescribed by the Bank bring or send into India any gold etc., the absoluteness
being emphasised, as we have already pointed out, by the terms of Section 24(1) of
the Act.”
22. The position, therefore, is as follows: Under the Foreign Exchange Regulation
Act read with the notice of the Reserve Bank, the importation of gold etc., into India is
prohibited except under the permission of the Reserve Bank and/or in compliance with
the conditions imposed by it. This may be said to be a restriction or a prohibition with
a condition. This is characterised by the Supreme Court as an “absolute embargo” with
a condition that gold etc. cannot be imported without the permission of the Reserve
Bank. This supports the conclusion reached above namely, that prohibition with a
condition attached is a prohibition if the condition is not fulfilled. In Pukhraj v. D.R.
Kohli Collector of Excise, Madhya Pradesh, AIR 1962 SC 1569, the Supreme Court was
considering Section 8 of the Foreign Exchange Regulation Act, 1947 read with Sections
23 and 23A and Section 167(8) of the Sea Customs Act, 187 & which involved
-----------------------------------------------------------------------------------------------------------------------------------------------------------
confiscation of gold imported without the permission of the Reserve Bank, or without
conforming with the restrictions imposed by it. Gajenaragadkar, J. (as he then was)
said as follows;—
“This notification imposed restrictions on import of gold and silver and it has
been issued under Section 8(1) of the Foreign Exchange Regulation Act, 1947. The
effect of this notification, inter alia, is that except with the general or special
permission of the Reserve Bank, no person shall bring or send into India any gold,
coin, gold bullion, gold sheets or gold ingot, whether refined or not. Thus bringing
into India gold from outside is prohibited by this notification unless the said gold is
brought with the general or special permission of the Reserve Bank.”
23. This is also supported by an English case, Regina v. St. Margarets Trust Ltd.
(1958) 1 WLR 522 at p. 527. In that case, the facts were as follows: Article 1 of the
Hire Purchase and Credit Sale Agreements (Control) Order, 1956, provided as follows:
“A person shall not dispose of any goods to which this order applies, in
pursuance of a hire purchase or credit sale agreement…. unless the requirements
specified in the Second Schedule hereto are or have been satisfied in relation to
that agreement.”
24. The Second Schedule required inter alia, that certain specified percentages of
the cash price of the goods must be paid before the signing of the agreement. The
nature of this restriction or conditional prohibition came to be considered in the case.
In course of his judgment, Donovan, J. said:
“The words of the order themselves are an express and unqualified prohibition of
the acts done in this case by St. Margarets Trust Ltd”. What was alleged in that
case was that St. Margarets Trust Ltd. has contravened the conditions laid down in
the Second Schedule. Thus, we find that a prohibition with a condition, where the
condition was not fulfilled was described as an “Express and unqualified
prohibition”.
25. With reference to the Supreme Court decisions mentioned above, Mr. Gorai has
argued that they are cases under the Foreign Exchange Regulation Act, 1947 and are
not applicable to the facts, of this case. The Foreign Exchange Regulation Act, 1947 is
an Act to regulate certain payments dealing in foreign exchange and securities and the
import and export into and out of India, of currency and bullion. The relevant part of
Section 8 of the Foreign Exchange Regulation Act, 1947 runs as follows:—
“8. Restrictions on import and export of certain currency and bullion. (1) The
Central Government may, by notification in the official Gazette, order mat, subject
to such exemption, if any, as may be contained in the notification, no person shall,
except with the general or special permission of the Reserve Bank and payment of
the fee, if any, prescribed, bring send into India any gold or silver or any currenc
notes or bank notes or coin whether Indian Foreign……………”
Page: 23
26. In exercise of the power conferred by the said section on the Central
Government, a notification was issued on 25th August, 1948 to me effect that except
with a general or a special permission of the Reserve Bank no person shall bring or
send into India any gold etc. The Reserve Bank issued notification dated 25th August,
1948 whereby conditions were laid down for granting permission for the importation of
gold etc. Section 23A of the Foreign Exchange Regulation Act, 1947 is in the following
terms:—
-----------------------------------------------------------------------------------------------------------------------------------------------------------
“23A. Application of Customs Act. Without prejudice to the provisions of Section

23 or to any other provision contained in this Act, the restrictions imposed by sub-
sections (1) and (of Section 8, sub-section (1) of Section 12 and clause (a) of sub-
section (1) of Section 13 shall be deemed to have been imposed under Section 11
of the Customs Act, 1962, and all the provisions of that Act shall have effect
accordingly.”
27. Section 11 of the said Act, as stated above, provides in sub-section (1) that the
Central Government if satisfied that it was necessary go to do for any of the purposes
specified in sub-section (2), may by notification in the official Gazette prohibit
absolutely or subject to such conditions as may be specified in the notification, the
import or export of goods of any specified description. Mr. Gorai argues that under
Section 8 of the Foreign Exchange Regulation Act, 1947 the Central Government may
impose a restriction by notification and under S. 23A such restrictions will be deemed
to be imposed under Section 11 of the said Act, and so a notification under Section 8
of the Foreign Exchange Regulation Act, 1947 would be deemed to be a notification
under Section 11(1) of the said Act. He, however, points out that in the instant case
we are dealing with Section 3 of the Imports and Exports (Control) Act, 1947 and sub-
section (2) of Section 3 which makes Section 11 applicable, does not refer to any
notification but states that all “goods” to which any order under sub-section. (1)
applies, shall be deemed to be goods of which import or export has been prohibited or
restricted under Section 19 of the Sea Customs Act, 1878, which has been replaced
inter alia by Section 11 of the said Act. The argument is that since there is no
reference to any notification in Section 3(2), there can be no prohibition or restriction
in the instant case, because no notification has been issued under Section 11 relating
to horses. In fact, in the only two notifications issued under Section 11, there is no
mention of horses. It is argued that unless such a notification is issued under Section
11 there cannot be said to be any prohibition under it, in spite of the provisions of sub
-section (2) of Section 3 of the Imports and Exports (Control) Act, 1947. I am unable
to appreciate this argument. Under Section 23A of the Foreign Ex-V change Regulation
Act, 1947, the restrictions imposed by Section 8(1) thereof shall be deemed be have
been imposed under Section 11 of the Customs Act, 1962. In such a case, a fresh
notification under Section 11 was accordingly not necessary, as the deeming provision
makes a notification under Section 8(1) of the Foreign Exchange Regulation Act, 1947
effective as a notification under Section 11 of the said Act. Similarly, under sub-
section (2) of Section 3 of the Imports and Exports (Control) Act, 1947 all goods to
which any order under sub-section (1) applies shall be deemed to be goods prohibited
under Section 11 of the said Act, An order under sub-section (1) of Section 3 has to be
promulgated by a notification published in the official Gazette and where goods are
prohibited by virtue of such notification, no further notification under Section 11 of the
said Act is necessary. The goods will be deemed to be prohibited under Section 11 of
the said Act and the notification under sub-section (1) of Section 3 of the Imports and
Exports (Control) Act, 1947 must serve the purpose of a notification under Section 11
of the said Act. If a substantial notification under Section 11 was necessary, then
there would be no sense in introducing a deeming provision in sub-section (2) of
Section 3 of the Imports and Exports (Control) Act, 1947. Mr. Roy Choudhury has also
pertinently pointed out that in part IV of Schedule I to the Imports (Control) Order,
1955 there are items like fire-arms including guns, ammunition, military stores etc.,
and it would be difficult to come to the conclusion that the law intended that people
who imported into India such things without a license should be allowed to retain the
same simply by paying a penalty. For the above reasons I think that the word
“prohibition” in Section 125 of the said Act means not only absolute prohibition but
prohibition subject to condition where the condition has not been fulfilled. In that view
of the matter, it would also include restriction in the nature of prohibition with a
-----------------------------------------------------------------------------------------------------------------------------------------------------------
condition. Mr. Gorai has argued that if this is the construction of Section 125 namely,
that prohibition includes both absolute prohibition and prohibition with a condition and
includes restriction, then it will cover the entirety of Section 111 of the said Act and
nothing will be left for the operation of the latter part of Section 125(1), namely “in
the case of any other goods”. That, however, is not so. For example, S. 111(c) speaks
about
“any dutiable……goods brought into any bay, gulf, creek or tidal river for the
purpose of being landed at a place other than a customs port.”
28. In such a case, the bringing of the goods into India is not prohibited, only duty
has to be paid, yet there is a provision for confiscation if the goods are landed at a
place other than a customs port. Another example is clause (h) which speaks of “any
dutiable goods unloaded or attempted to be unloaded in contravention of the
provisions of Section 33 or Section 34”. In such a case, the import is not prohibited,
and yet there is a provision for confiscation if the unloading is done in contravention of
Section 33 or Section 34. Mr. Gorai has also argued that the obtaining of a licence
cannot be called a condition. I am unable to accept this argument. If goods are
prohibited from being imported except under a licence, the obtaining of a licence is
clearly a condition for importation. In fact, it is a precondition.
Page: 24
29. For the reasons aforesaid I am of the opinion that the second point raised has
not been substantiated. In other words, in my opinion, the Imports and Exports
(Control) Act, 1947 read with the Imports (Control) Order, 1955 and the schedule
thereto, have laid down that the importation of horses into India could only be done
subject to the obtaining of a valid licence or a customs clearance permit.
30. This is a prohibition with a condition and where the condition has not been
fulfilled the goods are “prohibited goods” and comes within the mischief of Section
125 of the said Act. That being so, the adjudging officer had a discretion to impose a
fine or not and was not bound to give to the appellant an option to pay fine in lieu of
confiscation.
31. In the premises this appeal fails and should be dismissed. In the facts and
circumstances of this case, there will be no order as to costs.
MASUD, J.:— I agree.
DJ/D.H.Z.
32. Appeal dismissed.
———
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Page 1 Saturday, February 12, 2022

Calcutta High Court

Shaik Md. Omer … Appellant;

“It is not a case of unaccompanied baggage. The importation cannot be treated

was, therefore, considered as unauthorised as having been made in contravention of

“Part and Description. Licensing Policy for Validity of Remarks.

The petitioner, a national of Bolivia, was a passenger from Colombo to Genoa on

exportation is forbidden—unless there is the general or special permission of the

being, prohibited or restricted by or under Chapter IV of the Act.”

“23A. Application of Customs Act. Without prejudice to the provisions of Section

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