JUDGMENT - (1) This is an appeal by the Union of India against the decree of the City Civil Court which declared the penalty imposed by the Customs Collector upon the respondent-plaintiff to be invalid and directed refund of the fine recovered from the plaintiff. The plaintiff exported some semi-precious stones outside India to which restrictions under S. 12 of the Foreign Exchange Regulation Act applied. In terms of this section he was required to make certain declarations. These declarations were made by the plaintiff in the invoices dated April 6, 1956; April 9, 1956 and April 20, 1956. He declared in the first invoice that the full export value of the articles was Rs. 52,291-3-0 though the correct value was Rs. 63,305-5-0. Similarly, in the second invoice he declared the full export value as Rs. 39,256-10-0 though the correct value was Rs. 41,968-7-0, while the third invoice he declared the full export value as Rs. 30, 291-1-9 though the correct was Rs. 32, 446-10-9. On some information received by the Customs authority the premises of the plaintiff were searched on March 30, 1956. In this search, certain papers were seized under a panchnama by the Customs authority. From the papers it was discovered that invoices value shown in the declarations was less than the real full value of the articles exported. A show-cause notice was issued to the plaintiff in March 7, 1957 alleging that he had exported his consignments in contravention of the notification issued under Section 12 (1) of the Foreign Exchange Regulation Act and that an offence under S. 167 (8) of the Sea Customs Act was committed by him. After an enquiry at which he was heard, the Collector of Customs found that in each of the cases covered by the invoices the value was understated and therefore, an offence was committed under S. 167 (8) of the Sea Customs Act read with S. 12(1) of the Foreign Exchange Regulation Act. He imposed a penalty of Rs. 9,000/- on the plaintiff. The plaintiff filed an appeal to the Revenue Board which appeal failed. Thereafter, he instituted the present suit.

(2) In the plaint, he alleged that the order of the Collector of Customs was without jurisdiction or in excess of jurisdiction the contention being that no offence is committed under S. 167(8) of the Sea Customs Act on the assumption that the declarations made by the plaintiff were untrue. In any event, he contended that the Collector had no right to impose a penalty of more than Rs. 1000 and, therefore even if he had jurisdiction, he had exceeded his jurisdiction. Apart from this, he also alleged that the rules of natural justice were violated. The last contention was negatived by the learned Judge. However, following a judgment of K. T. Desai, J. in Misc. Appln. No. 376 of 1957, D/- 3-3-1958 (Bom), the learned trial Judge held that even if the declarations made by the plaintiff were untrue, the export of the goods under such declarations would not amount to an offence under Section 167(8) of the Sea Customs Act and the question of excess jurisdiction in this view did not arise. He, therefore decreed the suit.

(3) The question relates to one of construction of the relevant provisions of the Foreign Exchange Regulation Act, 1947 (hereinafter referred to as the Act of 1947) and the Sea Customs Act, 1878 (hereinafter referred to as the Act of 1878). The relevant provisions of the Act of 1947 are Ss. 12, 22, 23 and 23A of the Act of 1947. S. 12 (1) provides:

"(1) The Central Government may, by notification in the Official Gazette, prohibit the taking or sending out by land, sea or air of any goods or class of goods specified in the notification from India directly or indirectly to any place so specified unless a declaration supported by such evidence as may be prescribed or so specified is furnished by the exporter to the prescribed authority that the amount representing the full export value of the goods has been or will within the prescribed period be paid in the prescribed manner."

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