V.RAMASWAMI,J.

(1) CONTROLS on exports and imports were introduced as an emergency measure during the last war in respect of certain commodities and were kept alive after the lapse of the Defence of India Rules by the Emergency Provisions (Continuance) Ordinance, 1946 which was later replaced by the Imports and Exports (Control) Act, 1947 (18 of 1947). Under S. 3 of the Imports and Exports (Control) Act, 1947, the central government was authorised by order published in the Official Gazette, to provide for prohibiting, restricting or otherwise controlling, in all cases or in specified classes of cases. and subject to such exceptions, if any as may be made by or under the order, the import, export, carriage of goods of any specified description. By Ss. (2) of S. 3, it is provided that all goods to which an order under Ss. (1) applied shall be deemed to be goods of which the import or export has been prohibited or restricted under S. 19 of the Sea Customs Act, In exercise of authority under S. 3 of the Imports and Exports (Control) Act, 1947 the central Government issued notifications from time to time prohibiting, restricting or otherwise controlling the export and import of several commodities. By a consolidated order dated 7/12/1955, known as the Imports (Control) Order, 1955, restrictions on the import of certain goods were imposed by Cl. 3 of the said order. By Cl. 3, it was provided that no person shall import any goods of the description specified in Sch. 1, except under, and in accord once with, a licence or a customs clearance permit granted by the central government, or by an officer specified is Sch II. For implementing the scheme of controling imports. various provisions were made in CIs. 3 to 11 of the Imports (Control) Order,

(2) THE government of India makes known its import policy every six months by issuing in the government Gazette the procedure and the conditions for eligibility of licences and for the grant of import licences. This policy is published in a handbook called the Import Trade Control Policy" The policy is obviously framed having regard to requirements for home consumption of commodities to be imported, the foreign currency situation and the economy of the country as a whole With effect in 1/04/1963. the government of India promoted a scheme called "Special Exports Promotion Scheme for Engineering Goods" The object of the scheme was to give incentive to the manufacturers in India to export then finished products outside India and at the same time grant to the said exporters import licences for materials upto the extent of defined percentage of the F. 0. B. value of needs exported. The further object of the scheme was to create a market in the foreign countries for Indian goods not only from the standpoint of earning foreign exchange but also from the standpoint of enhancing the prestige of the Indian goods exnorted to those countries

(3) PARA 5.4 of the Scheme states "The value for which an import licence is given will be determined with reference to the F O B. value of exports and will be up to the Detary extent mentioned in Annx. V. This provision is, however, subject to the provisions that in addition to any action which may be taken to stop corrupt fraudulel practices:

(I) cases where the Licensing Authority considers that the value of the goods exported is over-invoiced. it shall be open to the Licensing Authority the to refuse to issue any licence against such export or to reduce the value if the licence to such figure as he deems fit: and

(II) In cases where the Licensing authority considers that there lias been a misdeclaration of the description of the products exported, no licence will be issued agree such exports and suitable penal action may also be taken against the person concerned."

(4) THE petitioners are "partners in a registered firm carrying on business as exporters and importers in the firm name and style of Transworld Trade Li