Proper enquiry and adjudication by Customs authorities is essential before reaching a conclusion on the import of goods.

JUDGMENT :

Pursuant to an agreement said to have been entered into between M/s. Nitu Enterprises, Kalimati, Kathmandu, Nepal and the respondent No. 1 herein M/s. Kumar Trading Co. LLC shipped two consignments of ball bearings, the particulars whereof were disclosed in the writ petition filed by the respondents. From the materials, as disclosed in the writ proceedings and before us, the respondent no. 1 is said to have received Letters of Credit No. BNR/T/ 32/629 for U.S. $ 3100 and BNR/T/32/630 for US $ 3500 from the said M/s. Nitu Enterprises of Nepal. It also appears that in the original Customs Transit Declaration which was filed by the Customs Clearing Agent the said Letters of Credit and the amount indicated therein had been duly indicated. Subsequently, however, what was sought to be imported was 10 times the amount of the value of the two Letters of Credit. The same having been discovered on inspection by the Customs authorities, the goods were seized as being fraudulently imported into India in contravention of the documents and statements made in the Customs Transit Declaration.

2. It appears further that an application was made on behalf of the respondent no. 1 for release of the goods so that the same could be re-exported to its place of origin, viz., Dubai. Since no steps were taken on the said application, the respondent no. 1 filed a writ petition, being W.P. No. 1650 of 1998, before the Calcutta High Court, inter alia, praying for a writ in the nature of mandamus to command the respondents therein and its officers and agents to permit the writ petitioner (respondent no. 1 herein) to re-export the goods which had come in the two containers mentioned in prayer (a) of the writ petition and also to cancel the impugned order of seizure of the said containers by the Customs authorities.

3. The case, as made out, appears to be that the said goods were covered by the Indo-Nepal Transit Treaty whereunder M/s. Nitu Enterprises which was based in Nepal had contracted for the import of certain quantity of ball bearings through the respondent no. 1 herein.

4. Be that as it may, in its counter affidavit to the writ petition, the Union of India brought on record before the Court the fact that in the meantime a show cause notice had been issued to the respondent no. 1 and various other individuals who were said to have been connected with the import of the said ball bearings. In fact, a copy of the show cause notice issued under Section 124 of the Customs Act, 1962 was also annexed to the counter affidavit.

5. Having regard to the above, the writ petitioner (respondent no. 1 herein) also questioned the validity of the show cause notice and, accordingly, the same was also brought within the ambit of the writ petition.

6. At this juncture, it may not be out of place to mention that neither at that stage nor even now, that is, even after almost nine years, has any cause been shown to the said show cause notice which had been issued on 14th August 1998.

7. There is no dispute that except for the show cause notice, nothing further appears to have been done in the proceedings and no enquiry or adjudication has taken place therein. Without such enquiry and without any evidence apart from the documents available having been brought on record, the learned Single Judge of the Calcutta High Court, upon observing that there was no iota of evidence to the effect that the petitioner (respondent no. 1 herein) was in collusion with M/s. Nitu Enterprises who imported the goods for consumption of goods in India or for any other purpose, held that the Customs authorities could not have come to the conclusion that the goods were imported for consumption in India. Such an observation, in our view, could have been after the authorities had been given an opportunity to conduct an enquiry and to adjudicate into the allegations indicated in the show cause notice.

8. Unfortunately, even the Division Bench, in the appeal preferred by the appellants herein before