SHANMUKHA VILAS CASHEW TRADERS Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) THE petitioner, a registered firm, is carrying on business in processing and export of cashew kernels to foreign countries. The petitioner, in the course of its business, entered into a. 'sale contract' No. 3767, dated 11th April, 1983 with M/s. J.F. Braun and Sons, a company incorporated in New York, for the sale of 500 cartons (1000 tins) of cashew kernels, 320 grade, at 1.55 dollars per pound, c. and f. New York, This contract was entered into through M/s. Mitchel Beck and Co. incorporated in New York, the brokers.

(2.) DUE to labour agitation and strike resulting in financial difficulties, the petitioner could not fulfil its contract aforementioned. By about October, 1983, the situation in the factory of the petitioner changed as the labourers withdrew their agitation. The petitioner, therefore, could start processing of kernels in his factory towards the end of December, 1983. Since it was not possible for the petitioner to process and get ready the 500 cartons of 320 grade kernels before the time stipulated in the contract for shipment the petitioner requested the purchaser to substitute lower quality grades in the place of 320 grade the petitioner had contracted to supply. These lower grades are produced during the processing of cashew. It was in this context, the petitioner with further damage, sought substitution of lower grade kernels in the place of 320 grade he was bound to export as per the contract.

(3.) THE Customs Department apparently was not satisfied with the explanation given by the petitioner as also the Cashew Export Promotion Council, because the Assistant Collector of Customs had issued a show cause notice why action should not be taken against the petitioner for alleged violation of Section 18(1) of the Foreign Exchange Regulation Act read with Section 113(d) of the Customs Act, 1962. The petitioner by Ext. P10 showed cause immediately and also appeared at the hearing afforded by the respondent. The Secretary of Export Promotion Council, one Sri. K.T. Ravivarma, also was present at the hearing, sponsoring the case of the petitioner inasmuch as the Council was convinced that it was a genuine case where the export should be allowed.