RUSTAM S. SIDHWA, J.--1. This is an appeal by Big Mak Foods Limited appellant against the judgment of a learned Single Judge of the Lahore High Court dated 2nd December, 1984 dismissing in limine their writ petition.
2. The brief facts of the case are that under two import licences the appellants in 1981 imported Cornelius Post Mix Overcounter and Undercounter Dispensers under item No. 311 of the free list of the Import Policy Order, 1980. Under the said item, goods notified in Part II of Annexure IV of the Import Policy Order could not be imported. Amongst some of the items notified in Part II of Annexure IV of the said Order, item No. 4 covered "beverage manufacturing machines" 84.19 II and 84.30 III. Items Nos. 84.19 II and 84.30 III are reproduced below:-- "84.19 Machinery for cleaning or drying bottles or other containers; machinery for filling, closing, sealing, capsuling or labelling bottles, cans, boxes, bags or other containers; other packing or wrapping machinery, machinery for aerating beverages; dish washing machines; I. Dish and other washing machines, electrical, requiring for their operation not more than one half of 1 brake horsepower.
II. Others.
84.30 Machinery, not falling within any other heading of this Chapter, of a kind used in the following food or drink industries; bakery, confectionery, chocolate manufacture, macaroni, ravioli or similar cereal food manufacture, the preparation of meat, fish, fruit or vegetables (including mincing or slicing machines), sugar manufacture or brewing:- I * * * II * * * III. Machinery for the brewing industry.
IV * * * V * * *
3. After the goods were received, the appellants filed papers for ex-bonding some of the units of the said goods showing the goods as falling under item No. 84.58 of the I.T.C. Schedule. However, the Customs authorities assessed the goods under item No. 84.15C of the I.T.C. Schedule and released the goods after charging customs duty at 120 per cent, apart from usual sales tax, etc. The said assessm ents were made in 1982 against payment of duty. On 15th February, 1983 the Collector issued a show-cause notice to the appellants for misdeclaration of goods on the basis that they fell under item No. 84.19 B of the I.T.C. Schedule and that their import was banned and that they were directed to show cause why penal action under section 156(1), 9 and 14 of the Customs Act read with section 3 (iii) of the Import and Export (Control) Act, 1950, should not be taken against them. The appellants denied the allegations contained in the notice and urged that they had made no misdeclaration and that the classification given by them was correct. The Collector, Central Excise and Land Customs, Lahore, by his order dated 28th April, 1983, held that the goods fell under item No. 84.19 B of the I.T.C. Schedule and since it was a banned item, the appellants were not entitled to import the same. He therefore confiscated the machines, but granted an option to the appellants to redeem the same against redemption fine of Rs. 20,00,000 apart from payment of normal customs duty, etc. He also held that since the appellants were not guilty of any misrepresentation, no action was called for under section 156(1)9 of the Customs Act, 1969. The said order was maintained by the 2nd Secretary on behalf of the Government of Pakistan on 10th May, 1984 on the revision filed by the appellants. He, however, reduced the redemption fine to half. The said order was also upheld by the learned Single Judge of the Lahore High Court on 2nd December, 1984. Being aggrieved by all the said orders, the appellants filed a petition for leave to appeal, which leave was granted to consider whether the machinery fell within the ambit of item No. 84.19 B of the I.T.C. Schedule and whether the machines imported were beverage manufacturing machines which were excluded by Part II of Annexure IV of the Import Policy Order, 1980.
4. On behalf of the appellants it is submitted that the imported goods fall under item No. 84.58 of the I.T.C. Schedule as the machines are automatic vending/dispensing machines and that the classification made by the Customs Officers that the goods fall under item No. 84.19 of the I.T.C.
Schedule is incorrect. It is submitted that where the classification is wrongly made, the Court can correct the same. In this connection, Collector of Customs, Madras v. K Ganga Setty (AIR 1963 SC 1319) has been cited. It is further submitted that the exclusion provided by the Import Policy Order covered beverage manufacturing machines falling under items Nos. 84.19 II and 83.40 III of the I.T.C.
Schedule and since the goods imported by the appellants did not constitute beverage manufacturing machines, the said goods could be freely imported and the appellants are not therefore liable for any penal fine. It is also submitted that the appellants first cleared 7 units out of 100 units in respect of which the Customs authorities illegally charged them duty at 120 per cent under item Nos. 84.15 C of the I.T.C. Schedule and on which excess amount recovered by them has not been refunded to them.
5. On behalf of the respondents it is submitted that the goods imported by the appellants being Post-Mix Dispensing Machines used for the production of beverages clearly fall under item No. 84.19 B of the I.T.C. Schedule.
6. We have heard the arguments of the learned counsel for the appellants and the respondents and have also perused the record. The only dispute between the parties is whether the goods fall under item No. 84.58 of the I.T.C. Schedule, as claimed by the appellants, or item No. 84.19 B of the I.T.C. Schedule as claimed by the Customs. The goods in question happen to be Post-Mix Overcounter and Under-counter dispensers, i.e, machines normally found in restaurants, cafes and cold drink bars. The machine consists of a number of cylinders which -contain extract of a beverage, water and carbon dioxide gas. The machine dispenses four types of beverages. When dispensing a beverage, a glass is put underneath the nozzle and the hand-lever is pressed which releases the beverage extract, water and carbon dioxide simultaneously to make an effervescent drink of the relevant beverage, which then is served over the counter. Item No. 84.19 B of the I.T.C.
Schedule inter alia covers machinery for filling bottles, cans, boxes, bags or other containers and machinery for aerating beverages. The Post-Mix Over-counter and Under-counter Dispensers not only fill the beverage in the cups concerned, but also aerate the beverage concerned. The goods therefore imported by the appellants appear to be covered by item No. 84.19 B of the I.T.C.
Schedule. The case of the appellants that the goods are covered by item No. 84.58 of the I.T.C.
Schedule cannot be accepted, for this category covers: "automatic vending machines, e.g., stamp, cigarette, chocolate and food machines (not being games of skill or chance)". The main characteristic of an automatic vending machine, as laid down in the Customs Cooperation Council, Brussels Nomenclature, Explanatory Notes, Volume III, are that they supply either some kind of merchandise or some amount of service when a coin or counter (disc) is put in a slot. They not only cover machines in which the distribution is automatic, but also those consisting of a number of cupboards or compartments from which the. Merchandise can be withdrawn after the coin has been inserted, the machine incorporating a device for releasing the lock of the appropriate cupboard or compartment (e.g., by pressing on a corresponding button). The Post-Mix Over- counter and Under-counter dispensers are hand-operated and, therefore, not automatic. They do not have a mechanism for receiving coins or counters discs which, when put in a slot, dispense merchandise. As laid down in Collector of Customs' case (supra) it is primarily for the Customs Department to determine the head or entry in the Tariff Schedule under which any' particular commodity falls and unless the construction is perverse, the Court would not be competent to interfere. In other words, if there are two constructions which an entry can reasonably bear and one of them, for good reasons, is adopted by the Customs, the Court would have no jurisdiction to interfere merely because another entry more favourable to the subject appears to the Court as equally applicable. The Customs having properly determined the head or entry in the Tariff Schedule under which the appellants' goods have fallen and the same being both appropriate and proper, no case for interference is made out. However, we notice that the appellants have been imposed a redemption fine of Rs. 10,00,000. Since earlier the Customs have collected excise duty from the appellants on seven units of the goods which they first cleared at 120 per cent ad valorem custom duty under item No. 84.15 C of the I.T.C. Schedule (instead of at 40 per cent under item No. 84.19 B 01 of the Schedule), the excess amount received by them should be adjusted against the redemption fine already paid by or to be leviable from the appellants. With this observation, this appeal stands dismissed.