VIJAY BROTHERS Vs. UNION OF INDIA

JUDGEMENT

(1.) THE first appellant is a registered partnership firm carrying on the business of manufacturing and exporting ready-made garments, woollen blankets, shawls and hosiery goods at Ludhiana and appellants two to five are its partners. Sometime in the year 1971, they exported five consignments declared as woollen mixed blankets under claims of drawback from Dum Dum airport. Four out of the five were sent to Singapore and the other to Qatar. Before the consignments were despatched from Ludhiana, the appellants got the same tested from the testing laboratory set up by the Textile Committee under the regulations framed in pursuance of the Textile Committee Act, 1963. The goods were found to conform to their description contained in the invoices as per specifications. Again, before they were airlifted at Dum Dum airport, Calcutta, samples were drawn for the purpose of laboratory test from these parcels and on laboratory test at the Calcutta Customs House, the goods were found to conform to the invoices and the shipping bills. After obtaining the clearance certificate from the Customs Officer, the goods were sent for its destination. The appellants received payment through the State Bank of India from the consignee firms at Singapore and Qatar. These facts are admitted. The appellants thereafter applied for drawback refund as provided under Sections 74 and 75 of the Customs Act, 1962, They were not given any refund, but a show cause notice dated 14th August, 1975, was issued by the Assistant Collector of Customs, Export Investigation Branch, Customs House, Calcutta, wherein it was alleged that the goods exported by them through the above consignments were shoddy blankets and not of mixed fabrics, containing terylene. This show cause notice was issued on the basis that the samples drawn from the original consignments which were lying in the custody of Thai Airways International Ltd. , Singapore, revealed on test that the blankets were manufactured of shoddy wool having terylene contents of 7. 3 per cent maximum though as per the declarations the terylene content was to be 74 per cent to 74. 5 per cent. The department seems to have made some enquiries at Ludhiana before issuing this notice. The appellants filed their replies and objections and demanded the drawback refund. However, by a considered order despatched on 16th February, 1976, the appellants were held guilty of violating the provisions of the Customs Act and Foreign Exchange Regulation Act and the Deputy Collector of Customs, Export Department, Customs House, Calcutta, imposed penalties both on the firm and the individual partners in respect of the five consignments. By the same order, he also rejected the claim for drawback refund.

(2.) THE appellants then filed on 9th May, 1976, C. W. P. No. 2191 of 1976 in this Court praying for a writ of certiorari for quashing the impugned order dated 16th February, 1976, and for a mandamus directing the respondents to give the drawback refund. The respondents objected to the maintainability of the writ petition on the ground that there is an effective alternative remedy of appeal provided under the Act and without exhausting that remedy, the writ petition could not be maintained. This found favour with the Court and by order dated 13th August, 1976, a Division Bench of this Court dismissed the petition relegating the petitioners to the alternative remedy of appeal as provided under the Act. The appellants then filed special leave petition in the Supreme Court against this order and the same was dismissed on 26th October, 1976, on the ground that the appellants shall exhaust their remedy of appeal before the Appellate Collector. Thereafter the appellants filed an appeal on 5th November, 1976, before the Appellate Collector of Customs against the order of the second respondent dated 16th February, 1976, which was received, according to the appellants, on 18th February, 1976. This appeal was dismissed on the ground that under Section 128 of the Customs Act, an appeal could have been preferred within three months from the date of communication to the appellants of the decision or order appealed against and even the powers of the Collector to excuse the delay was restricted to another three months and since the appeal was filed more than six months from 16th February, 1976, it was barred by limitation. The appellants preferred a revision to the Government of India and that was also dismissed on 21st December, 1978, affirming the order of the appellate authority.

(3.) THEREAFTER, the petitioners filed C. W. P. No. 1289 of 1979 praying for quashing of the order dated 16th February, 1976, and the orders of the Appellate Collector and the Government of India dismissing the appeal and revision, respectively, holding that it is barred by limitation. The appellants also prayed for a writ of mandamus directing the respondents to pay drawback amount of Rs. 1,09,437 to the petitioners (appellants ).