S.P. GOYAL Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS is a petition under Article 226 of the Constitution of India, seeking quashment of the detention order dated 21.7.2000, copy Annexure P-33, passed under the provisions of Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (hereinafter referred to as COFEPOSA). In the petition, it was alleged that the petitioner was carrying on his business at Ludhiana and that he was in active business since 1949 and was actively associated with imports and exports. It was further alleged that the petitioner was also engaged in the manufacturing of various items. It has been alleged that the present petitioner is sole proprietor of M/s Chirag Exports and Imports, which was engaged in the manufacturing of pillows, cushions and trading of textile and general items in imports and exports. It was further alleged that the petitioner was also a partner in M/s Merchant Exports (India), which was a 100% export oriented unit. Besides that, the petitioner is also a partner of M/s Sanjeev Woollen Mill, which is also engaged in the manufacturing of worsted woollen yarn. It was alleged that the petitioner was an income tax as well as wealth tax assessee since long. It was alleged that in the year 1997, the Government of India introduced an export incentive scheme under the name of "Duty Entitlement Passbook Scheme". Under this scheme, the benefits extended to the exporter making an export mainly consisted of duty credit licence granted to him for import of duty free goods. It was alleged that under this scheme, the exporter was under obligation to declare the present market value (hereinafter referred to as PMV) of the goods exported by him, since the benefit under the scheme could not exceed 50% of the PMV. It was alleged that comprehensive guide-lines were issued for determining the PMV in case of manufacturers, exporters as well as merchant exporters. It was further alleged that as per the various circulars issued by the Government, in-built mechanism had been provided with regard to the verification of PMV, declared by an exporter and it also provides opportunity to the exporter to justify the correctness of PMV. The PMV claimed by the exporter may also be reduced after adopting the due process. It was alleged that as per the various circulars, the benefit under the scheme can be availed by an exporter only when the PMV declared by him was accepted and not prior thereto. A competent authority has been empowered to reduce or reject the PMV. Under the said scheme, no penal action is provided where the PMV declared was found to be on the higher side.

(2.) IT was alleged that vide shipping bill No. 157 dated 4.8.1999, the petitioner through its concern M/s Merchants Exports exported a consignment of goods declared as "writing instruments D.F. Ball Pens 13 inches" to M/s Pilot Trading Company, Dubai. The total CIF value of the goods was shown US $ 1,95,000/-. The exporter declared PMV of goods at Rs. 10/- per piece in retail and Rs. 6/- in bulk. The entire export proceeds were released on 31.8.1999 and 2.9.1999 respectively, while the export was made on 13.8.1999. It was alleged that the son of the petitioner who was a director in M/s Cannon Steel Private limited, received a summon under Section 108 of the Customs Act, 1962 from respondent No. 3 asking for the documents to be produced relating to the export of ball point pens by Merchants Exports (India) and woollen exports of M/s Cannon Steels (Private) Limited in August, 1999. It was alleged that thereafter another summon was issued to the aforesaid son of the petitioner as well as to the petitioner under the same context vide summons dated 16.9.1999. It was alleged that in response to these summons, the petitioner made an elaborate representation to the Joint Secretary, Ministry of Finance and Director General of Revenue Intelligence at New Delhi on September 18, 1999 and September 24, 1999, highlighting that there was no illegality in the export of pens and that the entire process adopted by the DRI was unjustified and uncalled for and that the son of the petitioner had nothing to do with the Merchant Exports. It was further alleged that subsequently, a reminder dated 29.1.2000 was also issued and another representation was also made by the petitioner to respondent No. 3 on September 27, 1999 that there was no procedure of issuing summons under Section 108 of the Customs Act. It was alleged that subsequently respondent 3 issued another summons dated 4.10.1999 to the petitioner confining to the exports of ball point pens by M/s Merchant Exports on 4.8.1999 and calling upon him to appear before him on 13.10.1999 at Calicut. It was alleged that on the request of the petitioner, he was allowed to appear before the Assistant Director DRI at Bombay. It was alleged that the petitioner again made representation dated 5.10.1999 to respondent No. 3, highlighting that the verification of PMV was vested with the SIB of the Custom Department. It was further alleged various other summons were issued to the petitioner and even though the DRI was not competent to look into the matter, yet the petitioner cooperated with them and the statement of the petitioner was also recorded by the officials of DRI at Bombay on 13.10.1999. It was alleged that even though the petitioner had cooperated with the officials of DRI on each and every summon issued by them, yet the officials of DRI had filed a criminal complaint against the petitioner under Section 174 IPC on the allegations that he had not complied with the summons issued by the under Section 108 of the Customs Act on 25.11.1999. It was alleged that the petitioner filed Crl. Misc. Petition before the Kerala High Court and the Kerala High Court issued notice to respondents and stayed the proceedings before the Additional Chief Judicial Magistrate, Ernakulam. It was alleged that on 2.5.2000, the petitioner was arrested by DRI and a remand application was moved in the Court of Addl. Chief Metropolitan Magistrate, Bombay, alleging therein that the declaration given by the petitioner about the purchase and price of 13 inches DF Ball Point pens exported by him was false and had been made only to mislead them. It was further alleged that by furnishing false documents to the Customs and Investigating Officers, the petitioner had wilfully suppressed the facts pertaining to the actual purchase and PMV of export consignment. It was alleged that from a persual of the remand application, Annexure P-21, the main allegation against the petitioner was that the consignment of bail point pens exported to Dubai was highly overvalued in order to fraudulently avail the benefits of DEPB scheme. It was alleged that on the remand application made by the DRI, the petitioner was ordered to be produced before the competent court at Cochin, whereupon the petitioner moved bail application before the Chief Judicial Magistrate, Cochin, which was rejected vide order dated 8.5.2000 and petitioner was granted bail by the Sessions Court on 15.5.2000.

(3.) ON behalf of respondents 1 and 2 short reply has been filed, taking up the preliminary objection that the writ petition was not maintainable as the same had been filed at the "pre-detention stage" and the court should not interfere with the detention order at pre-detention stage, in view of the law laid down by their Lordships of the Supreme Court in various authorities. It was alleged that the case of the petitioner was not covered by any of the exceptions. It was further alleged that since 1989, the petitioner was a permanent resident of Mumbai. It was further alleged that the offence was committed at Calicut (Kerala) and as such this court should not entertain the writ petition filed by the petitioner on the ground of jurisdiction alone.