039-NLR-NLR-V-71-ADAMJEE-LUKMANJEE-SONS-LTD.-and-another-Petitioners-and-THE-CONTROLLER-OF.pdf
Adamjee Lukmanjee dr Sons Ltd. v. The Controller of Import#153
1968 Present: T. S. Fernando, J., and Weeramantry, J.ADAMJEE LUKMANJEE & SONS LTD., and another,Petitioners, and THE CONTROLLER OF IMPORTSand another, Respondents8. C. 242 of 1967—In the matter of an Application for a Mandate inthe nature of a Writ of Mandamus on the Controller of Imports andthe Principal Collector of Customs
Customs Ordinance (Cap. 235)—Forfeiture of goods imported and penalties imposed onthat account—-Scope of sections 43 and 164—Import Licensing Regulations,Regulations 2, 4.
Hie Controller of Imports and Exports issued a licence to the 1st petitionerto import condensed milk, but the relevant documents were not quite clearwhether the milk should be of Milona Cow brand or Aimhip brand. When
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T. S. FERNANDO, J.—Adamjec Lukmanjee dk Sous Ltd. c.
The Controller of Imports
tbo |petitioner imported a consignment of Airship brand condensed milk, theimposition of a 5% penalty was effected in terms of section 164, read with sectionIS, of the Customs Ordinance. It was claimed on behalf of the respondentsthat the petitioner was permitted to import milk of Milona brand only, and thatthe importation of Airship brand milk was prohibited by the licence.
Held, that a contravention of section 43 of the Customs Ordinance carriedwith it penalties of great severity, and before those penalties could be exacted,the importer was right in his contention that the licence should speak withoutequivocation on the issue of the proper brand of milk permitted to beimported.
j/.PPLIC ATI ON for a writ of mandamus on the Controller of Importsand the Principal Collector of Customs.
A. H. C. de Silva, Q.C., with Malcolm. Perera and Kumar Ameresekere,for the petitioners.
Ananda de Silva, Crown Counsel, for the respondents.
Cur. adv. vult.
March 16, 1968. T. S. Fernando, J.—
By regulation 2 of the Import Licensing Regulations, 1963 made bythe Minister of Commerce, Trade, Food and Shipping under section 2 ofthe Imports and Exports (Control) Act, (Cap. 236), and published inQazette No. 13,477 of January 11, 1963, the importation of goods of anydescription into Ceylon was prohibited except under the authority of alicence granted by the Controller of Imports-and Exports and subject tosuch conditions as may be specified therein. Regulation 4 empoweredthe Controller by notice published in the Gazette to grant an open generallicence authorising the import of goods of any description. It is commonground that till August 25, 1964 the importation of milk and milkproducts was permitted tinder open general licence. By Import ControlNotice No. 16/64 published in Gazette No. 14,149 of August 25, 1964, theController of Imports and Exports informed importers that from thatdate individual import licences are required for the importation of milk,milk products, butter and other dairy products from any source.Importers were requested to furnish the Controller with certifiedstatements of imports of the above-mentioned products. Thesestatements were called for probably to enable the Controller to decidethe question of allocation of import quotas to the several importers.
The 1st petitioner is a company that has been importing full creamcondensed milk, and, pursuant to the notice mentioned in the paragraphabove, submitted on September 11, 1964 a statement (C) of its importsof full cream condensed milk and other products. The Controller byletter (D) of September 21, 1964 in reply to the 1st petitioner’s letterforwarding the aforesaid statement requested the latter to furnish a list
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T. S. FERNANDO, J.—Adamjee Lukmanjee <fc Sons Ltd. r.
The Controller of Imports
describing the goods with brand names. Such a list (D2) was accordinglyfurnished by the 1st petitioner by its letter D1 of September 23. 1964.In this list it specified that its entire imports of full cream condensed milkfor the 3 years 1962, 1963 and 1964 consisted of Airship brand. TheController thereupon by bis letter El of October 1, 1964 informed the1st petitioner that it may send indents for licensing the imports ofcondensed milk for the period ending December 31, 1964.
On October 7, 1964, the 1st petitioner sent up an indent (E2) for 5635cartons of Airship brand condensed milk and the Controller duly issuedlicence E3 of October 16. 1964 to cover the importation of 5635 cartonsof Airship brand condensed milk. In 1965 and the first half of the year .1966 the 1st petitioner was granted licences FI, G and H for the importa-tion of the same brand of condensed milk. In-the second half of 1966,the Controller issued to the 1st petitioner licence (1.4) of September 22,1966 valid until the end of that year for importation of full creamcondensed milk. This licence contained an endorsement in the followingform“ The maximum C.I.F. price per carton of 48 x 14 oz. tins for thebrand you import, viz. Milona Cow, should not exceed 495/*. 3d.” Thereis nothing to controvert the 1st petitioner’s statement that it had neverbefore, except on one occasion when “ Milona Cow ” Brand condensedmilk was imported on an experimental basis, imported Milona Cow brandcondensed milk. Indeed, in list D2 the 1st petitioner had specified thatit had during the three years for which particulars had been requested byImport Control Notice No. 16/64 imported only Airship Brand. Despitethe nature of the endorsement on licence 1.4 it is not disputed that onthis licence the 1st petitioner imported and was allowed '1) by thePrincipal Collector of Customs to clear from the ship and (2) by theController of Exchange to pay for two consignments of Airship brandcondensed milk. The contention of the 1st petitioner is that it under-stood the endorsement (which contained a misdescription of the brand ithabitually imported) to mean that if it did import Milona Cow brand,payment therefor could not exoeed the rate of 49sh. 3d. a carton. It isadmitted that Airship brand is a little higher in price than the otherbrand. The Controller of Exchange whose duty presumably is to ensurethe conservation of foreign exchange in the Country did not seeanything wrong in the nature of the actual importation effected by the1st petitioner. The 2nd respondent, the Controller of Imports, hassubmitted, by affidavit, that these two consignments were inadvertentlypermitted to be cleared and there has been on the part of his offioe a failureproperty to scrutinise the relevant documents.
The next licences in point of time are licences (J and J1) of November 17,and December 12,1966 for importation of condensed milk before January 1,1967. They contained endorsements in terms identical to those set outin the paragraph above. The 1st petitioner imported on these licencestoo Airship brand condensed milk. The submission before us on itsbehalf was that, having on the immediately previous two occasions been
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T. S. FERNANDO, J.—Adamjee Lukmanjee <Se Serna Ltd. v.
The Controller of Imports
permitted to import Airship brand on a similar licence, it had everyreason to assume that there was nothing irregular in what it did. Thisimportation was questioned by the 3rd respondent, the PrincipalCollector of Customs, who acted in the matter, naturally enough, inconsultation with the 2nd respondent, the Controller of Imports. Theconsignment of condensed milk imports on licences J and J1 was allowedto be cleared by the 1st petitioner only on the payment of a penalty of5% of the value thereof. The penalty was paid under protest and thegoods cleared, the 1st petitioner intimating that the matter would betaken up in appeal by it.
The Principal Collector of Customs acts in the matter of forfeiture ofgoods imported and penalties imposed on that account by reason ofcertain provisions of the Customs Ordinance (Cap. 235). Section 43thereof declares forfeit goods enumerated in the Table of Prohibitionsand Restrictions Inwards in Schedule B to the Ordinance which areimported into Ceylon contrary to the prohibitions and restrictions thereincontained. By that Table goods so declared forfeited include articlesimported except in accordance with any enactment, legal order, etc. inforce for the time being. Section 164 of the Ordinance enables theMinister to make order for restoration of forfeited goods subject to termsand conditions he may think fit to impose. It is claimed that theimposition of a 5% penalty was effected in terms of the said section 164read with section 43.
To return to what happened in the year 1967 which is the year ofimportation we are concerned with on this application. Licence A datedFebruary 21, 1967 was issued by the 2nd respondent to the 1stpetitioner to import full cream condensed milk. This licence also carriedan endorsement in the earlier form as follows :—“ The Maximum C.I.F.price per carton of 48 x 14 oz. tins of the brand you import, viz. MilonaCow should not exceed 49sh. 3 d.” The 1st petitioner, on this licence,imported some 100,160 tins of Airship Brand condensed milk which,arrived in Ceylon in June 1967. It is this consignment which the peti-tioner has alleged it has not been permitted to clear from the Customspremises except on payment of a penalty of 5 % of the C.I.F. value ofthe goods. There is some dispute as to whether the 1st petitioner haspresented the necessary documents in respect of this consignment. Itwould appear that the documents must first be presented at the officeof the 2nd respondent before they are taken to the Customs Office. Onthis question of presentation of the documents there are conflicting affi-davits filed on behalf of the respective parties. We have been saved thetask of pronouncing on the merits of the affidavits because learnedCrown Counsel who appeared for both the 2nd and the 3rd respondentswas candid enough to inform us that even if the documents had beenpresented or are now presented, the action both respondents would havetaken or would take, as the case may be, would be to refuse clearanceexcept on payment of the penalty. This c^idid attitude, which we
T. S. FERNANDO, J.—Adamjee Lukmunjee Jr 3omt Lid. r.15?
The Controller of Import*
commend in the circumstances of this case, enabled us to make an orderexpeditiously so that the 1st petitioner may clear the goods and.incidentally, help to relieve to a limited extent the acute shortage ofcondensed milk in the market at the present day.
The correctness or otherwise of the action of the respondents dependsultimately on the interpretation to be placed on the licence A. It.recites that “ licence is hereby granted for the importation into Ceylonof the goods described above, subject to the conditions set out overleaf*'.The goods as so described “ above ” in licence A are “ full cream con-densed milk ”. “ The conditions overleaf ” referred to in the licence haveno relevance to the matter calling for decision on the instant application.We are therefore free to consider the effect of the endorsement reproducedabove and contained on the licence. It has been submitted on behalf ofthe 1st petitioner, and the relevant documents leave us in little doubt,that when the Controller of Imports purported to state on licence A thatMilona Cow is the brand you import he was misdescribing the brandhabitually imported by it which was indeed nothing but Airship brand.This misdescription notwithstanding, it has been contended on behalf ofthe respondents that a proper reading of the licence (with the endorse-ment) means that nothing but Milona Cow brand condensed milk couldlawfully have been imported thereon. Counsel for the 1st petitionercontended that the reasonable interpretation of the terms of the licencewould be that the licence was granted to import full cream condensedmilk, but, if Milona Cow brand was imported, the C.I.F. price thereofshould not exceed 49sh. 3d. per carton of 48 x 14 oz. tins. While wehave no reason to doubt the 2nd respondent’s averment that twoprevious consignments of Airship brand on similar licences were permittedby inadvertence on his part, there is no reason to think—and certainlynone was suggested—that the 1st petitioner believed that thoseimportations had been permitted through inadvertence or negligencein the office of the Controller of Imports.
In the circumstances detailed above, this application calls to bedecided by applying to the interpretation of the terms of the licence Athe same rule of construction that is permissible when a court is calledupon to interpret a statute or regulation of a penal nature, viz., the ruleof strict construction. Tersely put, the competing interpretations are,on the one hand, for the petitioners that the terms of the licence meanthat full cream condensed milk of any brand may be imported thereon,but that if Milona Cow brand is imported there is a ceiling placed on theC.I.F. value. On the other, for the respondents it has been argued thatthe licence stipulated that the licensee may import only the Milona Cowbrand. It does seem that to maintain this latter argument one has atleast to interpolate the words “ are allowed to ” before the word “ import”in the endorsement in question. Not only is the interpretation con-tended for on behalf of the petitioners the more reasonable of the twointerpretations put forward? but, we are constrained to say, that even if
158Ceylon Transport Board v. Ceylon Transport Workers’ Union
the two competing interpretations had been equally plausible, we wouldhave had to lean towards the less harsh of the two. A contravention ofsection 43 of the Customs Ordinance carries with it penalties of greatseverity, and before those penalties can be exacted, the importer is rightin his contention that the licence shall speak without equivocation on theissue. In these circumstances, the refusal (or virtual' refusal) on thepart of the 2nd and 3rd respondents to permit clearance of the goodsexcept on payment of a penalty was, in our opinion, unwarranted by law.Accordingly, having regard to the perishable nature of the goods, we. made order at the conclusion of the argument that a mandate in thenature of a Writ of Mandamus shall issue on the 2nd and 3rd respondents<lirecting them to permit the 1st petitioner to remove the consignment ofAirship brand full cream condensed milk in question without the• imposition of the further rents and dues referred to in paragraph 11 of thepetition. It is presumed that all relevant documents will be presentedby the 1st petitioner to the proper officers before the goods are removed.The 1st petitioner will be entitled to the costs of this application to bepaid by the 2nd and 3rd respondents.
Weeramantry, J.—I agree.
Application allowed.