Page 1

REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  4417 OF 2003

D.R. ENTERPRISES LTD. .....APPELLANT(S)

VERSUS

ASSISTANT COLLECTOR OF CUSTOMS  AND ORS.

.....RESPONDENT(S)

J U D G M E N T

A.K. SIKRI, J.

The appellant herein is aggrieved by the impugned judgment

of the High Court whereby the High Court has refused to allow the

appellant import of Web Printing Machine on concessional rate of

custom  duty.  The  appellant  had  endeavored  to  avail  the

concessional  rate  of  custom duty  on  the  import  of  the  aforesaid

machine under  Open General Allowance (for short, 'OGL') with the

aid of  Notification No.  114/80-CUS, dated 19.06.1980.   The High

Court  has  held  that  the  said  Notification  is  not  applicable  in  the

instant  case  as  the  appellant  has  not  been  able  to  satisfy  one

Civil Appeal No. 4417 Page

Page 2

particular eligibility condition contained therein. To put it pithily, one

of the conditions needs to be satisfied to avail  the concessional rate

of duty @ 35%  ad valorem under the aforesaid Notification is that

the machine is having output of 30,000 or more copies per hour.

Whereas  the  appellant  contends  that  the  machine  in  question

churned out 36,000 copies per hour, the High Court has found it

otherwise.  As per the High Court the output of the machine was

25,000 copies per  hour, which was reflected in  the leaflet  of  the

manufacturer of the machine, which leaflet was filed along with Bill

of Entry.   

2) In order to find out the details of the factual background under which

the aforesaid issue has cropped up, let us traverse through the facts

in some more details.

3) The appellant  herein had imported one printing machine of  make

'Harris Graphic V-15H Model'  which arrived at Mumbai airport on

24.10.1987. Custom house agent of the appellant filed Bill of Entry

for  Home  Consumption  under  OGL  on  13.11.1987  and  claimed

concessional rate of duty under Notification No. 114/80-CUS.

4) On 26.11.1987, the Appraiser of Customs House, Bombay issued a

Civil Appeal No. 4417 Page

Page 3

query  memo with  regard  to  the printing  capacity  of  the  imported

machine which had been shown in  the import  invoice as 36,000

copies per hour, but was shown as 25,000 in the leaflet furnished

along with the Bill  of Entry. Some other queries were also raised.

The appellant answered the issue on 21.01.1988.  

5) Having not been satisfied with the reply furnished by the appellant,

the customs authorities directed it  to warehouse the goods under

Section 49 of the Customs Act, 1962 (hereinafter referred to as the

'Act'),  after depositing the admitted customs duty. Accordingly, the

imported machine was warehoused.  

6) Thereafter, some queries regarding the output of the machine were

raised  and  the  appellant  tried  to  meet  them.  It  also  filed

communications received from the manufacturer explaining that the

machine was custom-made for Indian purposes, i.e, for the appellant

enhancing its capacity to 36,000 copies per hour as against normal

capacity  of  25,000  copies,  which  is  the  normal  product

manufactured by the said manufacturer. On that basis, the appellant

wrote to the customs authorities for arranging physical examination

of  the  consignment  to  satisfy  themselves  that  the  machine  in

Civil Appeal No. 4417 Page

Page 4

question was capable of giving output of 36,000 copies per hour.

However, no action was taken by the customs authorities thereafter.

7) Taking note  of  the inaction of  the customs authorities  to  get  the

imported consignment physically inspected and proceeding with the

clearance  of  the  same,  on  24.04.1988,  the  appellant  filed  a  writ

petition  before  the  Bombay  High  Court  (being  Civil  Writ  No.

2229/1988) praying for a declaration that the imported machine was

covered  by  OGL  and  was  entitled  to  the  concessional  rate  of

customs duty under Notification No. 114/80-CUS and for directing

the respondents to permit clearance of the same.  Interim relief of

release of the machinery was also prayed for.

8) The Assistant Commissioner of Customs (S.I.I.B.), Bombay, filed an

affidavit opposing the admission of the petition and grant of interim

relief.

9) On  10.08.1988,  the  High  Court  passed  an  order  directing  the

respondents to submit a list of relevant material required by them to

the appellant on or before 17.08.1988 and directed the appellant to

comply with those requirements on or before 26.08.1988 and further

directed the customs authorities to pass appropriate orders within

Civil Appeal No. 4417 Page

Page 5

one week thereafter.  The matter was adjourned to 31.08.1988.  On

02.09.1988, when the matter was again heard by the High Court,

taking note of the fact that no list of materials was served by the

customs authorities on the appellant and no adjudication order was

passed, the learned Single Judge of the Bombay High Court passed

an order directing the parties to inspect and test the consignment

under the supervision of the Court Appointed Officer within 5 days

from 02.09.1988 and directing the Adjudicating Authority to pass an

order within 7 days from the inspection and testing. It was not done

and further time was sought. However, when the needful was not

done even after getting time extension, on 03.10.1988, the Bombay

High  Court  passed  an  order  allowing  clearance  of  the  imported

machine  in  question  in  terms  of  prayer  clause  (c)(i)  of  the  writ

petition.

10) Pursuant  to  the  aforesaid  interim  order  of  the  High  Court,  the

appellant  was  allowed  to  clear  the  consignment  in  question.

However, the main writ petition was kept pending thereafter which

came up for final hearing in the year 2002, i.e. 14 years after the

filing of the writ petition. By that time the imported printing machine

had been in use by the appellant for all these years. The learned

Civil Appeal No. 4417 Page

Page 6

counsel  appearing  for  the  appellant,  in  these  circumstances,

impressed upon the High Court to decide itself the issue involved,

namely, whether  imported machine could print  36,000 copies per

hour or its speed was less than 30,000 copies per hour and whether

the  appellant  was  not  entitled  to  the  benefit  of  the  concerned

Notification.  The High Court went into the issue and by its detailed

judgment it has decided this issue against the appellant. The basis

for arriving at such conclusion shall be stated by us in some details

at the later stage.

11) Mr. L. Nageshwar Rao,  learned senior counsel who appeared for

the appellant,  challenged the very approach of  the High Court  in

deciding the issue on merits as well as the finding arrived at by the

High  Court in the following manner:

(i) In  the  first  place,  it  was  argued  that  the  High  Court  was  not

competent to go into this issue when the Act provides for complete

adjudication  machinery  to  adjudicate  this  issue.  Learned  senior

counsel referred to the provisions of Section 28 of the Act, as per

which the authorities are supposed to issue show cause notice to

the importer and after giving opportunity to the importer  to meet the

allegations contained in show cause notice, the Adjudicating Officer

Civil Appeal No. 4417 Page

Page 7

is to pass an Order-in-Original deciding the case stated in the show

cause  notice.  He  pointed  out  that  against  the  order  of  the

Adjudicating  Authority  there  is  a  provision  for  appeal  before  the

Customs,  Excise  and  Service  Tax  Appellate  Tribunal  (for  short,

'CESTAT'). Against the order of the CESTAT, appeal is provided to

the  Supreme  Court.  He  further  submitted  that  the  Authority  and

Tribunal are the fact finding authorities, which are supposed to take

evidence/material on record and arrive at a finding on that basis. Mr.

Rao, in this backdrop, submitted that not only this procedure was

sidelined  thereby  causing  great  prejudice  to  the  appellant,  even

otherwise,  the  High  Court,  while  exercising  its  extraordinary  writ

jurisdiction under Article 226 of the Constitution, was not competent

to decide the disputed questions of facts.   

(ii) Mr. Rao also impressed upon the fact that it was not open to the

Department  now  to  contend  that  the  machine  in  question  was

incapable of producing 36,000 copies per hour and have the matter

adjudicated when by this time the matter had become time barred.

In this behalf, it was pointed out that in the writ petition filed by the

appellant,  there  was  no  order  restraining  the  respondents  from

issuing  show  cause  notice  under  Section  28  of  the  Act  and  to

Civil Appeal No. 4417 Page

Page 8

proceed with the process of adjudication. Therefore, it was open to

the customs authorities to invoke the said machinery under the Act.

However, it was not done, which resulted in accruing valuable right

in favour of the appellant.  The learned counsel, thus, insisted that

when the customs authorities were precluded from taking any action

against  the appellant  because of  embargo of  limitation coming in

their way, the High Court was equally incompetent to decide the said

issue on merit and passing the liability upon the appellant in respect

of time barred claim.  

(iii) Another submission of Mr. Rao was that the writ petition was filed in

the  year  1988  in  which  interim  order  was  granted  in  favour  of  the

appellant.  The High Court  was forced to pass such an order  directing

release of the machine to the appellant when the authorities failed to get

the machine inspected to find out the potential output of the said machine.

Therefore,  the  Department  allowed the  chance  to  be  slipped away to

verify this fact on which the entire decision depended, and benefit thereof

should  have  been  given  to  the  appellant  as  it  was  not  possible  to

ascertain this fact after 14 years. In any case, it was argued that even the

High Court before deciding the issue did not go into this aspect.

(iv) The  last  submission  of  Mr.  Rao  was  on  merits  of  the  case

Civil Appeal No. 4417 Page

Page 9

emphasising  that  the  High  Court  was  merely  influenced  by  the

leaflets  containing  the  literature  about  the  machine  and  did  not

appreciate other material produced by the appellant, including the

clarifications  furnished  by  the  manufacturer  itself  stating  that

advance  version  of  the  machine,  with  modification,  was

manufactured and supplied to the appellant and insofar as machine

in question is concerned it had the printing capacity of 36,000 copies

per hour. He, thus, submitted that even on merits, the findings of the

High Court were coerced.

12) Mr. A.K. Panda, learned senior counsel appearing for the Revenue,

per contra,  refuted the aforesaid submissions forcefully. He put it

emphatically that it did not behove well on the part of the appellant

to now question the jurisdiction and competence of the High Court to

go  into  the  issue  when  the  High  Court  was  requested  and

persuaded by the appellant itself to decide the issue, as is reflected

in the impugned judgment itself. He, thus, argued that the appellant

was estopped from raising such an issue when the appellant itself

invited the judgment  on merits.  According to Mr. Panda,  this fact

would  also  negate  the  contention  of  the  appellant  predicated  on

limitation. His submission in this behalf was that the appellant had

Civil Appeal No. 4417 Page

Page 10

itself  raised this issue in the High Court  in its petition which was

pending  adjudication.   That  was  a  reason  that  the  Revenue

authorities  did  not  initiate  any  action  as  per  the  adjudicatory

mechanism provided in  the Act.  Therefore,  the appellant  was not

entitled to rake up the issue of  limitation as well.  On merits,  the

learned  senior  counsel  submitted  that  once  the  High  Court  was

invited to decide the issue on the basis of material that was placed

on record by both the sides, the High Court had looked into the said

material in its entirety and has found that the machine in question

imported  by  the  appellant  does  not  meet  the  requirement  of

Notification  No. 114/80-CUS as its output is only 25,000 copies per

hour which is less than 30,000 copies that is needed to avail  the

benefit of the Notification. He, therefore, pleaded for the dismissal of

the appeal.

13) We  have  considered  the  respective  submissions  of  the  learned

counsel for the parties on either side with reference to the record. In

a matter like this, it is necessary in the first instance to take note of

the scope of the writ petition that was filed by the appellant in the

High Court which is dismissed by the judgment impugned. A copy of

the said judgment is placed on record and a perusal thereof would

Civil Appeal No. 4417 Page 10

Page 11

show that the appellant contested and disputed the position taken by

the Department that the imported machine did not fulfill the aforesaid

requirement of exemption Notification No.  114/80-SC. The appellant

enclosed  copies  of  various  documents  procured  from  the

manufacturer and others in support of its submission on the basis of

which it was claimed that the appellant was able to establish that the

speed of the imported printing machine was 36,000 copies per hour.

On that basis, contention raised in the writ petition was that action of

the Department in not allowing the appellant to clear the machine

was illegal. The appellant also alleged failure and refusal on the part

of the customs authorities in not permitting the appellant to effect

clearance for an inordinately long period of time after the machine

was landed. On the basis of these pleadings, following main relief

was claimed in the prayer clause:

“The petitioner, therefore, prays:

(a) For a declaration that the petitioner is in law entitled to import and clear the said printing machine covered  by  the  said  Bill  of  Entry  for  Home Consumption (Exhibit  'A'  hereto)  as  an Actual  User under the Open General Licence;”

14) Another prayer was made to permit the appellant to clear the said

imported  Harris  Web  Printing  Machine  and  to  issue  a  detention

certificate to the appellant in respect of the said machine, covering

Civil Appeal No. 4417 Page 11

Page 12

the entire period from importation thereof upto the time the same is

cleared by the appellant.  In addition, interim prayer  for immediate

clearance of the machine by the appellant and issuance of detention

certificate were also made pending the hearing and final disposal of

the writ petition.  

15) As mentioned above, this interim prayer was allowed by the High

Court.  However,  the  writ  petition  was  still  kept  pending  for  the

obvious  reason  that  the  appellant  had  sought  the  main  relief  of

declaration that it was, in law, entitled to import and clear the said

machine as the same was covered by the Bill  of Entry for Home

Consumption,  as  filed,  as  an  actual  user  under  OGL.  Thus,  the

appellant had raised the dispute in the said writ petition on merits as

well.

16) No doubt, when the High Court passed the interim order in favour of

the appellant, the High Court could dispose of the writ petition with

the observation that the aforesaid issue involved on merit can be

gone into by the appropriate authority by putting the machinery of

adjudication in motion via Section 28 route.  For some reason, that

was not done and it was more so as the appellant had itself prayed

Civil Appeal No. 4417 Page 12

Page 13

for declaration to this effect in the writ petition, which means it called

upon the High Court to decide this issue.

17) In  the  aforesaid  scenario,  when  the  writ  petition  was  pending,

wherein  this  issue  was  raised,  probably  for  this  reason  the

Department also stayed its hands off. No doubt, there was no stay of

adjudication  proceedings  and  the  competent  authority  could  go

ahead with the adjudication proceedings. However, if  there was a

show cause notice in the year 2002, whether it  would have been

time barred or not is not even required to be gone into.  Such a

guess game is not needed because of one simple reason.  When

the writ petition came up for final hearing in the year 2002, it is the

appellant who is responsible for inviting the decision on merits. Even

at  that  stage, the appellant  could have simply withdrawn the writ

petition as with the passing of interim order it had got the printing

machine cleared from the customs authorities and was using the

same. However, it  did not choose to do so. Had it  done so,  and

thereafter received show cause notice under Section 28 of the Act, it

could have defended that notice raising the plea of limitation as well.

Only  then  question  would  have  arisen  as  to  whether  the  period

during which the writ petition remained pending had to be excluded

Civil Appeal No. 4417 Page 13

Page 14

or not, for the purpose of computing limitation period.  However, for

the  reasons  best  known  to  the  appellant,  the  appellant  argued

exactly the opposite of the submissions made before us by Mr. Rao.

We point out, at the cost of repetition, that it was at the instance of

the appellant that this issue was taken up for hearing. We reproduce

below the following discussion in the impugned judgment touching

upon this aspect:

“The long pendency of this petition for 14 years and the peculiar stand taken by the petitioners prevented us  from  remitting  this  matter  to  the  adjudicating authorities  under  the  Act  to  determine  the  disputed questions of fact. Left with no other alternative, we are constrained  to  decide  this  matter  on  merits  on appreciation of evidence for the following reasons:

18) Then,  as many as seven reasons were given by the High Court

which compelled the High Court to decide the issue on merits. After

noting those reasons, the High Court recorded as follows:

“In  the  aforesaid  circumstances,  though  we  initially thought of getting the issue adjudicated through the adjudicating authority by directing the respondents to issue show cause notice  under  Section  11-A [(sic); Section  28]  of  the  Act,  so  as  to  afford  reasonable opportunity to both parties to place their case before the adjudicating authority leaving on merits all the rival contentions open, the petitioners vehemently opposed this approach and placed reliance on the judgment of the Apex Court in the case of Gotak Patel Volkart Ltd. Vs.  Collector of Central Excise, Belgaon  reported in 1987 (28) ELT 53 (SC) so as to contend that show

Civil Appeal No. 4417 Page 14

Page 15

cause  notice  cannot  be  issued  beyond  six  months under Section 11-A [(sic); Section 28]  of the Act, and that after 14 years petitions cannot be asked to face the adjudication process. This is how the petitioners pressed for the decision on merits.”

19) It shows that High Court was not oblivious of Section 28 of the Act

and that determination of such an issue is to be more appropriately

in  the  hands  of  Adjudicating  Authority.  It  also appears  that  High

Court  might  have disposed of  the writ  petition  with  liberty  to  the

Adjudicating Authority to initiate proceedings under Section 28 of the

Act. Curiously, such an action was not taken at the instance of the

appellant which contended otherwise, as is clear from the following

narration:

“The  learned  counsel  for  the  petitioners  contended that this Court would not be justified in dismissing the petition  as  not  maintainable  on  the  grounds  of availability  of  alternate  remedy  especially  when  the petition was entertained,  kept  pending for  14  years and when it is being heard on merits. He also raised a contention  that  the  availability  of  alternate  remedy does not affect the jurisdiction of the Court to issue writ.  He also brought to our notice judgment of  this Court  in  the  case  of  Nehawas  Steel  Traders Vs. Union  of  India,  1993  (68)  ELT  721  (Bom.).  The petitioners  therein  were  permitted  to  clear  the assignment  on  certain  terms  under  interim  order which  specifically  provided  that  the  respondents would be at  liberty to serve show cause notice and pass appropriate adjudication order. The respondents having failed to  take any follow up action  for  more than 10 years, this Court in that case had observed that no fruitful purpose would be served by permitting

Civil Appeal No. 4417 Page 15

Page 16

the  respondents  to  commence  adjudication proceedings  hereinafter.  In  this  view  of  the  matter, submission was  made to  decide  this  petition  on its own merits on the available material.”

20) After  inviting  the  High  Court  to  decide  the  matter  on  merits  and

finding that the decision has gone against  the appellant,  contrary

argument is nothing but a desperate attempt to chicken out of the

situation which is appellant's own creation. This kind of somersault,

taking completely reverse stand before us, cannot be countenanced.

We, therefore, reject the contention of the appellant that High Court

was  not  competent  to  decide  the  issue  in  exercise  of  its  writ

jurisdiction.

21) The position would have been different if it was a case of inherent

lack of jurisdiction.  That is not so.  The powers of the High Court

under Article 226 of the Constitution, while issuing appropriate writs,

are very wide.  Even if there is an alternate remedy that may not

preclude  the  High  Court  from  exercising  the  jurisdiction  in  a

particular case.  In the face of alternate statutory remedies, when

the High Court declines to exercise the jurisdiction under Article 226

of the Constitution, it is a self imposed restriction only. In the instant

case, what is pertinent is that it is the appellant which not only made

Civil Appeal No. 4417 Page 16

Page 17

a prayer in the writ petition for deciding the issue in question, even

at the time of hearing (as noted above), it  is the appellant which

pressed  for  the  decision  with  the  submission  that  existence  of

alternate remedy should not deter the Court to render the decision

on  merits.   In  such  a  situation,  the  objection,  if  any,  to  the

maintainability  of  the  writ  petition  could  have  been  taken  by  the

respondent  and  it  does  not  behove  the  appellant  to  raise  this

objection in the present appeal after pleading in the High Court that

the matter be decided on merits.

22) For the same reason, the argument that the issue involved disputed

question of fact is also not available.  Order of the High Court clearly

records that the appellant had requested the High Court to decide

the issue on the basis of material on record.

23) We are not impressed with the argument of the appellant that the

matter had become time barred.  In fact, reasons for rejecting this

argument  have  already  surfaced  while  discussing  the  preceding

submission.  However, we would like to recapitulate them with focus

on the issue at hand which is being addressed now.

24) The issue as to whether the import of Web Printing Machine was

Civil Appeal No. 4417 Page 17

Page 18

covered  by  Notification  No.  114/80-CUS  dated  19.06.1980  was

pending in the High Court in respect of which petition was filed by

the appellant itself way back in the year 1988 raising this issue.  The

appellant  even got the interim order in its favour.  When the writ

petition came up for final hearing, the appellant impressed the Court

to decide the said issue.  In such a situation, question of limitation

does not  arise  inasmuch as  it  is  not  a  case  where  proceedings

under Section 28 of the Act were taken out giving any show cause

notice under the said section.  The question of limitation would have

arisen only in case the respondent had issued show cause notice

under Section 28 of the Act.  Further, it is not that the High Court

was oblivious of the provisions of Section 28.  That is categorically

recorded in the impugned judgment.  Curiously, it is the appellant

who, pointing this very reason, invited the decision on merits.  Now,

therefore, issue of limitation is not even open for the appellant to

urge before us.   

25) Other arguments of Mr. Rao were on the merits of the case.  Now

we shall advert to those submissions.

26) As pointed out  above,  the case of  the appellant  is  that  the High

Civil Appeal No. 4417 Page 18

Page 19

Court has given undue weightage to the two leaflets as against the

other material, including the certificate of the manufacturer clearly

stating  that  the  machine  in  question  which  was  supplied  to  the

appellant  was  an  upgraded version  capable  of  producing  36,000

prints  per  hour.   However,  from  the  reading  of  the  impugned

judgment,  it  becomes clear that  each and every document which

was filed and relied upon by the appellant has been discussed.  The

High Court observed that insofar as the documents of the appellant

are concerned, they can conveniently be divided into parts.  One

part  of  the document  consists  of  two leaflets  furnishing technical

data and description of the printing machine in question along with

Bill of Entry and certificate showing date 08.02.1987 issued by the

manufacturer  of  the  machine  M/s.  Harris  Graphics  Corporation,

USA.   The  other  part  of  the  document  is  nothing  but  a

correspondence made by the  appellant,  its  Clearing  and Holding

Agent  and one M/s.  S.L.  Kulkarni  & Co.,  which deals  in  printing

machinery, projecting  themselves  to  be  the  Indian  agent  of  M/s.

Harris  Graphics  Corporation,  USA.   The said  second part  of  the

documents  can  well  be  described  as  self  serving  evidence.

Likewise, documents produced by the respondent were also divided

Civil Appeal No. 4417 Page 19

Page 20

in two parts.  One part represents the document in the nature of

Inspection Report based on examination of the entire consignment

which was completed on 28.09.1988, while complying with the part

of  the  directions  issued  by  the  High  Court  by  order  dated

02.09.1988,  and  the  other  part  of  documents  is  basically  the

reproduction of documents supplied by the appellant itself.

27) Thereafter, the High Court formulated the question as to whether the

appellant had discharged its burden to prove that the subject printing

machine imported by it under OGL was having an output of more

than 35,000 copies per hour so as to entitle it to claim exemption

under Notification No.  114/80-CUS, as amended from time to time.

On that touchstone, the High Court has examined, appreciated and

analyzed  all  the  documents  produced  by  both  the  parties.   This

detailed analysis runs into several pages.  It is not necessary for us

to go through this evidence and discuss the same as we find that the

ultimate conclusion drawn by the High Court in this behalf is correct

and plausible.  We would, however, like to reproduce the following

observations  of  the  High  Court  wherein  the  certificates  of

manufacturer produced by the appellant vis-a-vis the leaflets giving

technical details of the machine which were found along with the

Civil Appeal No. 4417 Page 20

Page 21

machine, are discussed:

“38.  The bare reading of the above certificate gives a picture that Model-15-H is with JF-25, JF-4, JF-10.  If this certificate is read in the light of leaflets referred to hereinabove,  the  relevant  portions  of  which  are extracted in the above par, it would be clear that the manufacturer wants to suggest that the folder JF-25-B has been upgraded to JF-25, with additional folders JF-4 and JF-10.  Firstly, as already stated, the leaflets do  not  support  this  picture  sought  to  be  projected through  the  above  certificate  dated  3rd June,  1986. Secondly,  had  it  been  so,  the  subsequent  leaflet alleged to be a catalogue of modified model would not have been omitted to mention this special feature of the upgraded model.  It does not support the assertion sought to be made in the certificate in question.  No reference is to be found to the additional folders styled as JF-4 and JF-10 in the said literate.   Thirdly, the inspection  report  of  the  machine  furnished  by  the Customs based on the inspection completed before 28th September, 1988 shows that the folder base of the machine in question was found as JF-25-B model. Had the folder been upgraded from JF-125-Bto JF-25 then the machine in question ought to have been with modified folder JF-25 and could not have been with folder base JF-25-B.  Fourthly, other modified folders JF-4 and JF-10 are not to be found in the inspection note,  obviously, for want of  such machine or  model with such modified folders.  This inspection note has not been objected to by the petitioners.  Thus, it can be safely treated as undisputed document.  One more shade  of  the  same  evidence  needs  further appreciation.  The letter  of  M/s S.L.  Kulkarni  & Co. dated 21st January 1988 (Exh. J) makes out a case that the original model V-15-H exported to India has been  modified  to  run  at  36,000  speed.   The modification pertains to design changes in folder  of the  machine  to  run  at  that  speed  and  to  take additional load due to higher speed, the horse power of the machine has also been suitably modified is the case  sought  to  be  made  out.   We  have  already observed and recorded our finding that no evidence is

Civil Appeal No. 4417 Page 21

Page 22

available on record to establish modifications of  the folder base of the machine or model in question.  If this be our finding, then the logical conclusion is that no modifications have been made in the folder base of the machine or model in question.  If that be so, then in absence of modification of the folder base, machine cannot be said to be capable of taking additional load. Therefore, it cannot given higher speed so as to given higher production to the extent of more than 35,000 copies per hour.  The certificate and the letter of M/s S.L. Kulkarni & Co., therefore, cannot be relied upon. The same cannot be given any credence.  The said evidence, for the aforesaid reasons, is not acceptable to us.

39.  One more aspect of the above certificate needs to be noticed.  This certificate of the manufacturer is dated  3rd June  1986.   The  contract  to  purchase machine in question has been shown to be dated 24th March,  1987.   The  copy  of  the  contract  dated  24th March,  1987  as  already  observed  hereinabove  has not been produced on record.  One more document styled as agreement dated 24th April 1986 (Exh. G) is produced on record.  Both these documents are prior to the date of  formation of  contract  i.e.  24th March, 1987.   No  evidence  is  on  record  to  connect  these documents with the subject contract dated 24th March, 1987 or with the machine in question.  It is not known whether the same agreement culminated in the final contract  dated  24th March,  1987  or  the  same  was modified  or  a  new contract  has  taken  place.   It  is settled principle of law of contract that the document prior  to  formation  of  contract  cannot  be  taken  into account to interpret or to understand the contract in question unless it is shown to be a part of the same contract  or  negotiation.   Therefore,  for  want  of material  on  record,  the  said  documents  cannot  be treated as part of the same contract.  Even otherwise the time gap between the alleged agreement  dated 24th April  1986  (Exh.  G)  and  contract  (dated  24th March,  1987)  is  such  that  it  was  all  the  mere necessary to prove that the said document was the part of the subsequently concluded contract.”

Civil Appeal No. 4417 Page 22

Page 23

28) We are  in  agreement  with  the view taken by  the  High  Court  on

merits,  having regard to the fact that burden of proof was on the

appellant  to  establish  that  the  machine  imported  by  it  generates

more than 35,000 composite impressions or copies per hour.  The

appellant has failed to do so.

29) As a result, the appeal fails and is hereby dismissed with no order

as to costs.

.............................................J. (A.K. SIKRI)

.............................................J. (N.V. RAMANA)

NEW DELHI; AUGUST 12, 2015.

Civil Appeal No. 4417 Page 23