Judgment

GUPTA, J.:- These six appeals by special leave arise out of two orders dated February 25, 1970 and March 18, 1970 passed by the Central Government in revision under Section 131 of the Customs Act, 1962 (hereinafter referred to as the Act). By order made on February 25, 1970 the Central Government disposed of three revision applications preferred against three orders passed by the Central Board of Excise and Customs, New Delhi (hereinafter referred to as the Board) on June 1, July 19, and August 12, 1968 in appeal from certain orders of the Collectors of Customs at Calcutta and Bombay. Civil Appeals Nos. 1141-1143 of 1970 arise out of the Government of Indians decision dated February 25, 1970. Civil Appeals Nos. 1256-1258 of 1970 are from the Government of Indias order dated March 18, 1970 disposing of three revision cases which arose out of three appeals decided by the Board on November 11, 1968, February 13, and Match 13, 1969 preferred against certain orders passed by the Collector of Customs, Bombay. In each of the cases giving rise to the appeals before us the Collector of Customs had made an order under Section 111 (d) of the Act which provides for confiscation of improperly imported goods; in some cases a personal penalty was imposed in addition, in several other cases the Collector had passed an order of fine in lieu of confiscation. The Board made an order in all these cases allowing the goods to be redeemed on payment of fine in lieu of confiscation. The Board also remitted the personal penalties imposed by the Collector.

2. The facts found by the Customs authorities on the evidence in the cases covered by Government of Indias order dated February 25, 1970 are these. Under the Cotton Textiles Export Incentive Scheme exporters of cotton fabric and yarn were entitled to get import licences for the import of any or all of the following four items :

(i) Non-viscose staple fibre,

(ii) Viscose rayon yarn,

(iii) Synthetic yarn, and

(iv) Polynosic viscose staple fibre.

A number of such import licences were issued to various textile mills, hereinafter referred to as the licensee mills; some of the licences were issued for the importation of non-viscose staple fibre only, the others were valid for the importation of all the four varieties. The licensee mills entered into agreements of sale with a private limited company named M/s. Dhanraj Mills Private Ltd. who were represented in these transactions by another concern, M/s. Madhusudan Gordhandas & Co. of Bombay. The agreements were for sale of non-viscose staple fibre to Dhanraj Mills to be imported against the said licences subject to permission being granted by the Textile Commissioner. It was also agreed that the margin of profit would be paid in advance to the licensee mills and that the c. i. f. value would be directly paid by the purchasers to the concerned bank when documents were received from the foreign suppliers. It was further agreed that other charges such as import duty, clearing charges and other incidental charges including demurrage would be paid by the purchasers to the parties concerned. It was stipulated that the letters of credit would be opened by the purchasers through their bankers. The licensee mills were not to be held responsible for any delay in the transmission or presentation of shipping documents nor for any demurrage or damage to the material. Dhanraj Mills had in the meantime written to the licensee mills asking them to obtain all necessary instructions from Madhusudan Gordhandas and also authorised Madhusudan Gordhandas to stand guarantee for payment of bills drawn against the letters of credit opened through their bankers and the bank charges. Pursuant to this arrangement the licensee mills handed over to Madhusudan Gordhandas both customs and exchange control copies of the licences, blank applications signed by the licensee mills for opening letters of credit, declaration forms for customs clearance and letters authorising the Bank of Tokyo