TOOLSIDASS JEWRAJ Vs. ADDITIONAL COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) This appeal by special leave is directed against the judgment of Calcutta High Court dated 6th February, 1975 setting aside the order of the learned single Judge of the High Court dated 9th June, 1972.

(2.) Brief facts of the case are that M/s. Toolsidass Jewraj (hereinafter referred to as the 'petitioner firm') had been carrying on the business of export of Jute goods from India to foreign countries including United States. The petitioner-firm entered into contracts on December 19, 1961 for shipment in January, 1962 of Jute goods to M/ s. Franc Samuel and Co. of New York, through their agents M/ s. C. J. Dammann Inc. of New York, U.S.A. According to the petitioner-firm in January, 1962 the price of Jute goods appreciated considerably and to avoid severe losses the petitioner-firm through the said agent arranged for switching the shipment over to April/June, 1962. The petitioner-firm thereafter made arrangements for shipment of a consignment of 435 bales of Hessian Cloth by s.s. "'City of Singapore" and submitted shipping bills along with G.R.-1 forms with the Customs authorities on June 1, 1962. The gain resulting from the sale of goods was allowed to the buyers and their profit was discounted from the sale price for subsequent shipment and shown accordingly in the shipment bills and G.R.-1 forms which was thus not the full export value of the goods. On June 5, 1962 Shantimoy Mukherjee Customs Sarkar of the petitioner-firm and M. V. Ashar appeared before the Customs Appraiser and supplied to him all information regarding the consignment. The Appraiser apparently satisfied dictated to them a letter to be written by the petitioner-firm to the Customs authorities on the basis whereof the consignment could be permitted to be exported. In the letter of June 5, 1962 the adjustment of price as aforesaid was admitted on behalf of the petitioner-firm and it was further stated that there was no mala fide in the account and the firm did not want any show cause memo and would agree to abide by the decision of Customs athorities. Thereafter, they appeared before theAdditional Collector of Customs, Calcutta where few questions were put to them. In the meantime s.s. "City of Singapore" left without taking the consignment.

(3.) The Additional Collector of Customs took the view that a sort of "phatka" business was being carried on by the so-called consignees abroad and in the said business the so-called shippers in India were playing the role of brokers. The shippers appeared to be conscious that they could not remit the aforesaid profits legally, and hence they had chosen to harness into service the medium of export business in this connection. The F.O.B. values declared by the shippers in the G.R. forms were on their own admission incorrect and the object of making these incorrect declarations was unethical and otherwise highly objectionable. The Additional Collector thus held that an attempt had been made by M/ s. Toolsidass Jewraj to ship the goods covered by the shipping bills and the G.R. forms mentioned in the appendix, without making a declaration that the amount representing the full export value of the goods had been or will, within the prescribed period, be paid in the prescribed manner. The shippers as such had committed offences attracting the provisions of S. 167(8) of the Sea Customs Act read with Ss. 23A and 23B of the Foreign Exchange Regulation Act, 1947 (as amended). The goods were therefore liable to confiscation and the shippers were liable to personal penalty under the aforesaid sections and also under S. 167(37) of the Customs Act. The Additional Collector of Customs by his order dated June 6, 1962 gave the following directions: