Goods in transit through a foreign country are not liable to export duty or cess.

( 1 ) THE facts in this case are shortly as follows: the petitioner company owns and manages a Tea Estate known as the Atiabari Tea Estate, situated in the Alipurduar, district of Jalpaiguri. The petitioner grows tea which it sends to Calcutta for sale, both for export and for internal consumption, through auction-sales held by brokers in Calcutta. On diverse dates in July, 1953 the petitioner made over to the North Eastern Railway Administration at Garopara, 402 chests containing 42016 lbs. of black tea, for carriage and delivery to the petitioner at Calcutta, T. T. Shed. The intention thus was to send tea from one part of the Indian Union to another. The North Eastern Railway proposed to send the tea via Dhubrighat through the Agency of R. S. N. Co. Ltd. and I. G. N. and Ry. Co. Ltd. , (the joint river companies) who were to carry them to Calcutta' by river, part of the route lying in Eastern Pakistan. As required by the Excise Department, the petitioner had to execute a bond for despatch of the tea through Eastern Pakistan. A copy of the bond is annexed to the petition and marked as Annexure 'a'. The Bond states that it was being executed in consideration of the permission granted for transporting the goods by Steamer and Rail in transit through Pakistan territory. The petitioner, by that bond, guaranteed the production and delivery within two months from the date of the despatch, a certificate or certificates from the consignee, of the receipt of the goods. The petitioner further undertook not to divert any goods en route, 'and in' the event of any short-delivery at destination, to pay the duty or cess together with any penalty that may be adjudicated by the Customs,. Calcutta under the Land Customs Act. It appears that the consignment was put on board the steamer--S. S. Pagan--for carriage to Calcutta. On 22-7-1953 the steamer carrying the consignment met with a serious accident near Jagannathganj in Eastern Pakistan, as a result of which the Steamer sank with its entire cargo on board including the consignment in question. In other words, the goods, during transit by river, were lost totally by being submerged in the river. The petitioner duly informed the Collector of Central Excise, Calcutta by a letter, dated 1-10-1953, of the said loss. The Superintendent of Central Excise, Alipurduar Circle asked for particulars and documents relating to the loss, and according to the petitioner Company such documents were furnished. On 19-4-54, the Inspector of Central Excise, Atiabari Range, demanded payment by the petitioner of the sum of Rs. 7,878/- as export duty and Rs. 840/- as cess. The petitioner filed an objection stating that the goods being lost, no export duty or cess was payable, but the said objection was rejected and the respondents are proceeding to realise the alleged dues for export duty and cess from the petitioner. This has given rise to this application. In this application, the petitioner asks for an appropriate writ directing the respondents to forbear from giving effect to the notice of demand, dated 19-4-1954 and 8-6-1955 together with one issued on 2-7-1955 and to generally not enforce realisation of the said sums demanded as export duty and cess.

( 2 ) BEFORE I proceed further, it will be necessary to mention the fact that the petitioner has filed a suit against the Union of India and the India General Navigation and Ry. Co. as well as the River Steam Navigation Co. Ltd. for damages and compensation in respect of the goods lost as aforesaid, valued at Rs. 78,857/10/10. This, has been numbered as Money Suit No. 3 of 1954 in the Court of the Subordinate Judge, Jalpaiguri. Copies of the pleadings thereof are annexed to the affidavit in reply filed by Mahendra Nath Ghatak, dated 2-9-1956. In the plaint, it is alleged that the consignments were delivered for transit to the North Eastern Railway, but the consignments have not been delivered and the petitioner company, the plaintiff therein, was enti