HARAN JAHVERI Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) The Writ petition is for the issue of the writ of mandamus directing the 2nd respondent to immediately allow clearance of the goods on recovering normal rate of customs duty to the petitioner as declared consequently and to on issue a detention certificate.

(2.) The Petitioner, who is an importer of dyes and chemicals, and is holding REP licence to import diverse quantity and quality of disperse dyes, entered negotiations with M/s. S.I. Group of Hong Kong, for the sale and supply of one metric ton of disperse dyes blue and one metric ton of disperse dyes red, manufactured and controlled by China. Accordingly the said suppliers by their invoices dated 15-8-91 and 4-9-1991 supplied the said goods and shipped through the vessel S.S. ACX LILY and Vessel Tokyo Beg v. 10/556 from Hongkong to Madras under Bill of lading Nos. NIKS 3480117209 and 79987113 respectively. According to the petitioner, before the said goods could be examined, the Officers of the 2nd respondent seized the said goods and took away all the documents, on the landing of the goods at Madras Port suspecting under-invoicing of the goods. It is further alleged in the affidavit filed in support of this petition that though the said goods were seized by the 2nd respondent as early as September, 1991, no summon has been issued to the petitioner and on an oral enquiry, the petitioner came to know that the petitioner had to obtain a manufacturer's invoices. i.e., sale documents as the goods in question were suspected to be under-invoicing and the said goods could not have been imported at a price of US$ 3.10 per kilo cif Madras. Thereafter on 8-10-91, the petitioner requested the supplier at Hongkong to send copies of manufacturer's original invoices so as to produce before the respondents, but the suppliers informed the petitioner about their inability to comply with the request of the petitioner due to business secrecy. In the meanwhile, it is alleged, that the respondents had drawn the samples of the said goods and analysed the same and obtained a report that the cost of the goods imported by the petitioner must be higher than the value shown in the invoices. According to the petitioner the valuation of the imported goods are concerned, (sic) the same are guided by the provisions of Section 14 of the Customs Act read with the Customs Valuation of Imported Goods Rules 1986.- The Petitioner has made a reference to Customs Valuation Rules, 1963, in his affidavit filed in support of this writ petition (the petitioner ought to have referred to Customs Valuation of Imported Goods Rules 1988 , which has superseded 1963, Rules). It is further contended that the seizure of the goods in question is illegal and under Section 14 of the Customs Act the respondents ought to have released the goods provisionally under Section 18 of the Act and when admittedly the goods are manufactured are controlled by the Republic of China, no question of any under-invoicing the goods will arise, and therefore, the action of the 2nd respondent, suspecting and questioning the character of the supplier in China, would be totally dehors the provisions of the Customs Act. It is also further alleged that the seizure is illegal, mala fide and therefore liable to be lifted. As per the provisions of Section 18 of the Act, it is incumbent upon the respondents to have allowed clearance of the goods on provisional assessment, when the respondents have floated investigation in the matter and the provisional release of the goods is a statutory right, which cannot be denied by the respondents.

(3.) Notice of motion has been ordered by this Court on 31-12-91. Mr. M.R. Narayanaswamy, senior counsel and Mr. Srinivasamurthy, appear for respondents. In the counter filed by the 2nd respondent it is contended that there are many varieties of dyes and dyes having same colour, shade, etc., manufactured by various companies with a distinct price list from time to time, and the value of dyes depends upon the category of dyes, colour index, concentration, etc. It is not correct to stale that before the goods could be examined, the officers of the 2nd respondent seized them, and in fact, the seizure was effected only on 3042-1991 on the basis of a specific intelligence report about the under-valuation of the subject import, bills of entry and other connected documents. Summons were issued to the petitioner as early as on 7-10-91 under Section 108 of the Customs Act 1962, directing the petitioner to appear before the 3rd respondent on 14-10-91 to give evidence in connection with the enquiry relating to the import of disperse dyes blue and disperse dyes red along with necessary documents, followed by several telegrams on 6-11-91, and on 22- 11-91. As there was no response from the petitioner, a detailed enquiry was conducted by the respondents and also had the samples tested to find out the colour index number of the dyes imported, and according to the test report from the laboratory M/s. Sandoz (India) Ltd., at Bombay that the sample of the goods described as "disperse dyes blue" was found to be a "disperse dyestuff' with a shade similar to colour index disperse dye 165 and the sample of the goods described as "disperse dyes red" was found to be a "disperse dyestuff' with a shade similar to colour index disperse dye red 343. In view of the fact, that the imported goods are grossly under valued with intention to evade duty, they were all seized by the respondents under Section 111 of the Customs Act, 1962. It is further contended that as per the notification No. 44/90 (N.T.) Customs dated 3-8-90, an importer is bound to furnish