RAJAN GHOSHAL Vs. UNION OF INDIA UOI

JUDGEMENT

(1.) The petitioner, Rajan Ghoshal, carries on business under the name and style of Shyam Sundar Enterprises, a sole proprietorship concern. He had exported certain goods in five containers from Kolkata Port through M.V. Kota Bintang. These containers were off-loaded from the vessel M.V. Kota Bintang at Vizag Port by the Customs Authorities. A notice dated 11th January, 2002 was addressed to the shipping agent M/s. S.K. Kanjilal, through whom the petitioner had shipped the consignment. This Annexure "P-4 is the subject matter of challenge in this petition. In the said letter, the shipping agent was informed that those five containers were off-loaded at Vizag Port for 100% examination. Therefore, the shipping agent was asked to depute a representative in whose presence the examination would be carried out on 12th January, 2002. This notice was issued by Deputy Commissioner of Customs, Special Investigation Branch, Kolkata.

(2.) Mr. Mullick, learned Counsel for the petitioner, has challenged the action of the Customs Authorities on various grounds. According to him, the Customs Authority purported to Act on the basis of suspicion as is reflected from the notices issued by the Appraiser, Special Investigation Branch, Dock Intelligence Unit (Appraising) contained in Annexure "P-5" series. Relying on those notices, he contends that the said notice was issued on the basis of suspected over-invoicing. Thus, the basis of off-loading the said goods and initiating the investigation purporting to 100% examination, was founded purely on suspicion. According to him, such investigation can be carried out under Section 110 of the Customs Act, 1962, if the proper officer has reason to believe that the goods are liable to confiscation. He points out that suspicion is not a reason to believe. He relied on the decision in State (Collector of Central Excise) v. Tapan Kumar Shome, 1986 (23) ELT 42 (Orissa) (para 16); Smt. Pushpa Devi v. Union of India, 1984 (15) ELT 72 (Raj.) (Head Note) and Income Tax Officer v. Lakhmani Mewal Das, 103 ITR 437 (SC) at page 448. Relying on these decisions, he had elaborated that in the present case there is nothing to show that the Proper Officer had any reason to believe. The reason to believe being the foundation of the whole action initiated, in its absence, the entire process fails. As such the entire process should be quashed and the goods should be exported. Therefore, the Customs Authority cannot proceed to confiscate or seize the goods.

(3.) The learned Counsel appearing on behalf of the shipping agent of the petitioner, S.K. Kanjilal, who is added as party, supported the contention of Mr. Mullick. He pointed out that once the goods are exported and leaves the port, the title to the goods passes on to the person to whom the goods are exported or in other words the importer of the exported goods. Therefore, the exporter cannot be held liable in respect of those goods. Submission on behalf of the Customs Authority: