PLETHICO PHARMACEUTICAL Vs. UNION OF INDIA

JUDGEMENT

(1.) BEING aggrieved by Order dated 2nd December, 1986 passed by Collector of Customs (respondent No. 2 herein) as also notice dated November 29, 1986 issued by Assistant Collector of Customs, Air Cargo Complex raising a demand on the petitioners for Rs. 6,94,260/- towards customs duty, this Petition has been filed.

(2.) FACTS giving rise to this Petition, briefly, are as follows:

(3.) IN October 1985, petitioner entered into a contract with a German Supplier for purchase of 300 Kgs. of Cephalexin Monohydrate powder (hereinafter referred to, for the sake of brevity, as 'the vital drug' ). The said drug is a life-saving drug importable under OGL. It was importable, free of duty. Under the said contract dated October 10, 1985 with the German Supplier of repute, payment was to be made by the petitioners vide irrevocable letter of credit opened by the petitioners through their Bankers on October 17, 1985. The goods were imported by Air on 1st november, 1985. On 2nd November, 1985 petitioners filed their Bill of Entry for home consumption. On the basis of the Delivery Order issued by their Bankers, petitioner applied for delivery. Petitioners also applied to the Assistant Drug Controller for testing the material. This was as per the Delivery Order. Thereafter, petitioners were informed that 200 Kgs. out of 300 kgs. of the said vital drug did not conform to the description. Accordingly, the petitioners informed the German Supplier who, by their letter dated December 20, 1985 confirmed that they were ready and willing to take back the said material. The Customs did not clear the remaining 100 Kgs. of material which was found to be in order. In the meantime, petitioners also informed their Bankers to stop payment. On 31st July, 1986, Assistant Collector of Customs, Air Cargo complex, informed the petitioners that the goods were required to be re-tested in the Customs house before re-export. Samples were sent accordingly for re-testing to the Deputy Chief chemist. Petitioners once again requested the Customs to permit them to re-export the goods to the extent of 200 Kgs. By an Order dated 2nd December, 1986, respondent No. 2 came to the conclusion that there was a collusion between the petitioners and the Foreign Suppliers to remit foreign exchange out of India and by the said Order, respondent No. 2 confiscated 200 Kgs. of the said vital drug and imposed penalty of Rs. 2,00,000/- under Section 112 (b) of the Customs act, 1962. No Order was passed in respect of 100 Kgs. , although there was no complaint with regard to 100 Kgs. out of 300 Kgs. of the vital drug imported. On 29th November, 1986 simultaneously, the Assistant Collector of Customs, Air Cargo Complex issued a notice alleging that the petitioners have not produced end-use consumption Certificate and demanded Rs. 6,94,260/- on the ground that petitioner have violated conditions of Bond under which petitioners had undertaken to use the imported material for manufacture of life-saving drug. Being aggrieved by Order dated 2nd December, 1986 and notice dated 29th November, 1986, the present Writ Petition has been filed.