UNITED INDIA MINERALS Vs. ASSISTANT COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) THE petitioner in this application challenges the show cause notice dated the 8th March, 1967 issued by the respondent No. 1 and the proceedings thereunder. The petitioner which is a limited company carries on business of mining and exporting mica. In July and August 1964, the petitioner exported several cases of 'No. 6 Block Spotted Loose Mica Splittings' of the 1st and 2nd quality to Italy by s. s. 'Malacca'. The said goods were exported under four separate shipping bills. On the 4th February, 1964, a Trade Notice was issued by the Joint Chief Controller of Imports and Exports, Calcutta, whereby exports of some varieties of mica were prohibited and some varieties were allowed to be exported subject to a minimum f. o. b. price per kg. as specified in the said Trade Notice. The export of mica of varieties other than those specified in the said Trade Notice could be exported without any restriction as to the minimum f. o. b. prices, 'No. 6 Black Spotted Loose Mica Splittings' of the 1st and 2nd quality were not specified in the said Trade Notice and the same could be exported without any restriction as to the minimum f. o. b. price. The export of the several cases of 'No. 6 Black Spotted Loose Mica Splittings' of the 1st and 2nd quality were duly authorised by the Joint Chief Controller of Exports, Calcutta, by endorsements made on the respective shipping bills. It appears that at the instance of the Appraiser, Customs House, Calcutta, some of the cases of the said goods were checked by the Appraiser before permitting export and as it was found that the goods sought to be exported were in conformity with the declaration made in the said shipping bills, namely, that they were 'No. 6 Black Spotted Loose Mica Splittings' of the 1st and 2nd quality, the endorsements were made by the Appraiser in the shipping bills indicating the above fact. Copies of the said shipping bills bearing the aforesaid endorsements have been annexed to the petition.

(2.) THE petitioner was served with a show cause notice dated the 8th March, 1967, which is the subject matter of challenge in this Court. By the said show cause notice the petitioner was asked to show cause why penal action should not be taken against it Under Section 114 of the Customs Act, 1962. The said show cause notice was issued in respect of the said several cases of No. 6 Black Spotted Loose Mica Splittings' of the 1st and 2nd quality exported by the petitioner under the said shipping bills. The notice has referred to the various correspondence that passed between the petitioner and the foreign buyers and thereafter it was alleged that export of mica from India was governed by the provisions and/or conditions stipulated in the Trade Notice No. G -16/64 dated the 4th February, 1964, in terms of which certain varieties of mica were not permitted to be exported from India at prices below the floor prices stipulated in the said Trade Notice, On reasonable belief that the documents useful for or relevant te the proceedings under the Customs Act and goods liable to be confiscated, were secreted therein, the office premises of the petitioner and other connected places were searched by the officers of the customs house in October, 1964 and certain documents were seized. It was alleged in the show cause notice that in order to circumvent or by -pass the provisions or stipulations contained in the Trade notice and in the Export Trade control restrictions, deliberate plans and arrangements were drawn up and implemented by the petitioner in collaboration with Italian agents and Italian buyers whereby the goods covered by the statements contained in the said show cause notice were exported as a result being misdescribed and misdeclared as black spotted mica splittings. The good exported were not, according to show cause notice, black spotted mica splittings of the first and second quality. It was further alleged that the declaration was made to make it appear to the concerned authorities in India that the said goods belonged to a variety for which no floor prices were applicable. In the premises it was further alleged that goods in question were exported and declaration to the concerned authorities were made on the basis of prices lower than the floor prices applicable to the actual goods exported. It was alleged further that there had been no declaration of the full export value that was required be paid. It was alleged that Section 12 (1) of the Foreign Exchange Regulation Act, 1947 and the notifications issued thereunder under Clause (3) of the Export Control Order, 1958 had been violated. It was further alleged that inasmuch as the goods which had been exported were prohibited goods, they had been exported in violation of the law and as such under provision of Section 113 read with Section 114(1) of the Customs Act, 1962 the said goods were liable to be confiscated and the petitioner was asked to show cause why penal action should not be taken against the petitioner.

(3.) THE next allegation that requires consideration in this application is how far the Customs Authorities would have jurisdiction in this case to deal with the question of the alleged contravention of Section 113 of the Customs Act and the action proposed to be taken Under Section 114(1) of the Customs Act, 1962. The same has been challenged mainly from two different aspects. It was argued, firstly, that orders passed by the Customs Authorities could not be re -opened in the manner purported to be done without any specific provision in the statute to that effect. It was, secondly, argued that goods having been permitted to be exported and goods having been exported in pursuance to that permission, Sections 113 and 114 of the Customs Act would not be applicable in this case. It was urged that as the aforesaid goods had been exported out of India, these could not and did not come within the definition of the 'export goods' as defined in the said Act. In order to decide this controversy it would be relevant to consider the provisions of the Act. Section 2(19) defines 'export goods' as any goods which are to be taken out of India to a place outside India. Section 2(25) defines 'imported goods' as goods brought into India from a place outside India but does not in - clude goods which have been cleared; for home consumption. Section 2(14) states that dutiable goods mean any goods which are chargeable to duty and on which duty has not been paid. Section. 2(33) deals with prohibited goods and states that prohibited goods mean any goods the import or export of which is subject to any prohibition under the said Act or any other law for the time being in force but do not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with. Section 47 deals with clearance of goods for home consumption and states that where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any. assessed thereon and any charges payable under the said Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption. Section 50 of the said Act deals with the entry of goods for exportation and it would be relevant to set out the provisions of Section 50 and Section 51 : - 50. (1) The exporter of any goods shall make entry thereof by presenting to the proper officer in the case of goods to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a bill of export in the prescribed form. (2) The exporter of any goods, while presenting a shipping bill or bill of export, shall at the foot thereof make: and subscribe to a declaration as to the truth of its contents. 51. Where the proper officer is satisfied that any goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order1 permitting clearance and loading of the goods for exportation.