PROBHA LOHIA Vs. COLLECTOR OF CUSTOMS MADRAS

JUDGEMENT

(1.) BOTH the above writ petitions raise a common question whether the respondents have jurisdiction to investigate or enquire into the manner of imports and exports made under certain Advance Licences issued to the respective petitioners.

(2.) IN W.P. No. 21069 of 1993 the petitioner is the partner of a firm called M/s. G.D. Enterprises engaged in the business of Imports and Exports. The firm had obtained two Advance Licences in February, 1992 and March, 1993 under the Duty Exemption Entitlement Scheme (hereinafter called "D.E.E.C. Scheme") for the import of Cassia. The licences carried an obligation to export Cassia oil to the extent of 45% value addition. Several conditions are attached to the licences and according to the petitioner-firm it had complied with all the conditions. IN respect of the first licence issued in February, 1992 for the import of 13.5 Metric Tonnes of Cassia it is stated that the petitioner had exported necessary quantity of Cassia Oil manufactured by the supporting manufacturer M/s. Net con, Bangalore. The second licence for the import of 80 Metric Tonnes of Cassia was utilised by importing in two lots, the first for 27 Metric Tonnes and the second for 54 Metric Tonnes of Cassia. Before the first import of 27 Metric Tonnes could be cleared, there was a raid on the premises of the petitioner-firm by the officers of the Directorate of Revenue INtelligence. The premises of the supporting manufacturer was also inspected by the officers. Thereafter the imported Cassia was cleared and similarly the second import of 54 Metric Tonnes was cleared in July-August, 1993. It is also contended that 50% of the export obligation in respect of the second licence has also been complied with. While so, the office premises of the petitioner was again raided on 21-10-1993 and all the original documents relating to the import and export of Cassia have been seized and removed by the second respondent. The petitioner is aggrieved by a summons issued by the second respondent on 22-10-1993 seeking the attendance of the petitioner to give evidence and produce documents. The summons has been issued under Section 108 of the Customs Act.

(3.) A.L.C. Circular 4/92 dated 23-6-1992 provides for the grant of licence under the D.E.E.C. Scheme for import of cloves, cinnamon and cassia. Similarly, A.L.C. Circular 9/92 dated 12-8-1992 gives details of the licensing conditions and the input and output norms and value addition requirements for the import of those goods under the D.E.E.C. Scheme. The D.E.E.C. Scheme is adumbrated in Chapter XIX of the Import Export Policy for 1990-93. Mr. R. Thiagarajan for the petitioners relies on Clauses 344, 345, 348, 363, 365, 366 and other similar clauses for emphasising the point that it is the licensing authority who has all the powers including the power to take action for the violation of any of the clauses. On the other hand, Mr. C.A. Sundaram for the respondents refers to Clause 366(l)(c), to suggest that the Customs Authorities have also a role to play if the licence holder is not able to fulfil the export obligation both in terms of quantity and value. He also refers to ALC Circular 8/90 dated 10-8-1990, which contains the following clauses :- "The above actions shall be without prejudice to any other action that may be taken against the licence holder under the IMPEX Act and the Customs Act for non-fulfilment of export obligation, mis-utilisation of imported materials, violation of the provisions of this scheme, including enforcement of the legal undertaking and also disentitling the licence holder for further licences/release orders under the Import & Export Policy."* Mr. Thiagarajan also relies on the form of indemnity-cum-guarantee bond executed by an applicant for a licence under the DEEC Scheme, to suggest that the application is only towards the Chief Controller of Imports and Exports. On the other hand Mr. C.A. Sundaram, brings to my notice Clause 6(e) and 6(f) of the bond which clearly indicate that the importer makes himself liable for various legal action including the confiscation of the imported material at any time before or after the completion of the export obligation period. Clause 6(f) of the bond is very important and in my opinion, cuts at the root of the case of the petitioners. It is as follows :- "That the importer is liable to action taken for recovery of Customs or other duties, penalty and interest etc. thereon under provisions of the Customs Act, 1962'