PELISETTY SOMASUNDARAM PRIVATE LIMITED Vs. GOVERNMENT OF INDIA

JUDGEMENT

(1.) The prayer in the writ petition is to call for the records of the first respondent in proceedings No. 368-B/78, dated 16th December, 1978, confirming the order of the second respondent, made in C.3/1889/46, dated 21st December, 1976, and the order of the third respondent dated 17th/18th June, 1976, made in S. 30/3325/72 Gr. I, and issue awrit of certiorarito quash the same. The petitioner has approached this Court under the following circumstances. A particular quantity of flue-cured Virginia tobacco, weighing 20, 200 kgs., was brought from Guntur to Madras by the petitioner and it was exported under shipping bill No. 2752, dated 24th September, 1971. The foreign buyers refused to take delivery of the goods as the tobacco was found to have "funked". It is admitted before me that this expression "funked" indicates that the tobacco had deteriorated in quality and it could not be utilised for the purpose for which it was meant. This obliged the petitioner to reimport and after satisfying the requisite formalities, the tobacco was cleared from the customs, transferred and rewarehoused at Guntur and in fact, the tobacco was sold to various third parties after processing and repacking. On 1st October, 1972, the third respondent issued notice under section 28 (1) of the Customs Act, 1962 (52 of 1962) hereinafter referred to as the Customs Act, 1962, calling upon the petitioner to show cause as to why a demand of customs duty amounting to Rs. 8, 60, 000 should not be enforced. The petitioner offered its explanation and in spite of it, the third respondent determined the customs duty payable as Rs. 8, 08, 000 by his order dated 7th May, 1975. This was taken on appeal to the second respondent by the petitioner and the second respondent, by order dated 12th August, 1975, remanded the matter back to the third respondent since certain infirmities with reference to the compliance with the principles of natural justice were noticed. Pursuant to the order of remand, the third respondent considered the matter once again and by order dated 17/18th June, 1975, confirmed the demand and the levy of customs duty of Rs. 8, 08, 000. This order was again taken on appeal to the second respondent and the second respondent by order dated 31st December, 1976, found no warrant of interference and the appeal was rejected. The petitioner took up the matter by way of a revision to the first respondent and the first respondent also, by order dated 16th December, 1978, declined to interfere and the revision application was rejected.

(2.) There is no dispute before me that the demand and the levy against the petitioner have been made under section 20 of the Customs Act, 1962 though the formal notice was issued under Section 28 of the Customs Act, 1962. It is true that no specific clause of the above provision has been referred to and relied on by the original authority, namely, the third respondent, but I find that when the matter was agitated further, the demand and the levy were sought to be sustained under clause (c) of the proviso to sub-section (1) of section 20 of the Customs Act, 1962. Before me also, the learned Counsel for the respondents sought to sustain the levy only under the aforesaid clause. Before I advert to the implications of the said provision and the construction which the learned Counsel for the petitioner wants to put thereon in contrast to the construction which the learned Counsel for the respondents would like to put thereon, I find it necessary to delineate certain facts which are not in dispute.

(3.) The original exportation had taken place under what is known as