1979 Supreme(Cal) 272

High Court Of Calcutta
A. N. SEN, S. C. GHOSH, AMIYA KUMAR MUKHERJI
EURESIAN EQUIPMENTS AND CHEMICALS LTD. - Appellant
Versus
COLLECTOR OF CUSTOMS - Respondent
Full Bench Reference 2  Of  1976 In A. F. O. O. No. 1049 Of 1973
Decided On : 07/24/1979

The provisions of S. 113 and 114 of the Customs Act 1962 are attracted, when there is a contravention of S. 12(1) of the Foreign Exchange Regulation Act 1947 in relation to goods which had in fact been exported.

Headnote:

FOREIGN EXCHANGE REGULATION ACT, 1947 - S. 12(1) - CUSTOMS ACT, 1962 - SS. 2(19), 11, 113, 114, 124 - Whether, by virtue of S. 23a of the Foreign Exchange Regulation Act, 1947, the provisions of Ss. 113 and 114 of the Customs Act, 1962 are attracted for contravention of S. 12(1) of the Foreign Exchange Regulation Act, 1947, in relation to goods which had been exported beyond India. Whether, when goods have been exported beyond India such goods may be said to be ?export goods? as defined in S. 2(19) of the Customs Act, 1962 and liable to confiscation under S. 113 for the purpose of imposition of penalty under S. 114 of the said Act.

Fact of the Case:

The appellants were carrying on business amongst others of export of Bishmuth sub-nitrate B. P. and Bishmuth Citrate B. P. C. 49 from Calcutta since 1967-68 and exported about 45 consignments of the same mainly to Amsterdam and Hongkong earning Foreign Exchange amounting to about rupees fifty lacs up to 1971. On the 20th January, 1972, a notice was issued to the appellants by the Deputy Collector of Customs asking them to show cause why penal action should not be taken against them under section 114 of the Customs Act, 1962. In the said show cause notice it has been alleged that the appellant company exported 11 consignments to M/s. Modist Corporation, Golden Crown Court, 6th floor Kowloon, Hongkong against shipping bills between 29th December, 1969 and 16th June, 1970 and the description of the value of the goods covered by the above shipping bills were incorrectly and untruly declared in the shipping bills as well as in the relative G. R. I. Forms. The validity of the said notice was challenged by the appellants in a writ petition filed under Article 226 of the Constitution. The said writ petition of the appellants came up for final disposal before P. K. Banerjee, J. after rule had been issued and affidavits completed. The main contentions raised on behalf of the appellants who were the petitioners before the learned trial Judge as recorded in the judgment of the learned trial Judge, were that the show cause notice was without jurisdiction and void on the grounds, namely, (1) Even assuming that there was violation of the Foreign Exchange Regulation Act in particular S. 12(1) of the Act, the respondent Customs authority did not have any jurisdiction to initiate the proceeding under the Customs Act and (2 ). In any case the goods having been exported the offence, if any, could not come within the mischief of S. 114 of the Customs Act, 1962. In support of the aforesaid contentions raised before the learned trial Judge reliance was placed on the judgment of the Division Bench in the case of M/s. Jute Investment Co. Ltd. v. S. K. Srivastava and Ors, 77 CWN 501 and also on the decision in the case of United Minerals and ors. v. Assistant Collector of Customs and Ors, reported in 1971 Criminal Law Journal 1370.

Finding of the Court:

The Court held that by virtue of S. 23a of the Foreign Exchange Regulation Act 1947 the provisions of S. 113 and 114 of the Customs Act 1962 are attracted, when there is a contravention of S. 12(1) of the Foreign Exchange Regulation Act 1947 in relation to goods which had in fact been exported. The Court further held that the attempt to export the goods necessarily precedes the actual export of the goods. Goods become liable to confiscation as soon as the attempt is made. There is no provision in the Act to suggest that this accrued liability is wiped out or extinguished with the exportation of the goods. It may be that after the goods had in fact been exported the liability of the goods to be confiscated may not be enforceable by actual confiscation of the goods. Personal penalty of any person who, in relation to the goods, does or omits to do any act or omission renders the goods to confiscation under S. 113 or abets the doing or omission of such an act has been provided in S. 114. This provision is attracted as soon as the goods incur the liability to confiscation under S. 113 and such liability, as we have earlier held, arises when the goods are attempted to be exported contrary to any prohibition. It is to be noted that at the time when the goods are sought to be exported they are undoubtedly ?export goods? within the meaning of s. 2(19) of the Customs Act. The liability of personal penalty provided in S. 114 of the Act, which arises with the accrual of the liability of the goods to confiscation under S. 113 of the Act at the stage of the attempt to export the said goods, clearly remains and the said liability is capable of enforcement.

Issues: 1. Whether, by virtue of S. 23a of the Foreign Exchange Regulation Act, 1947, the provisions of Ss. 113 and 114 of the Customs Act, 1962 are attracted for contravention of S. 12(1) of the Foreign Exchange Regulation Act, 1947, in relation to goods which had been exported beyond India. 2. Whether, when goods have been exported beyond India such goods may be said to be ?export goods? as defined in S. 2(19) of the Customs Act, 1962 and liable to confiscation under S. 113 for the purpose of imposition of penalty under S. 114 of the said Act.

Ratio Decidendi: The Court held that the provisions of S. 113 and 114 of the Customs Act 1962 are attracted, when there is a contravention of S. 12(1) of the Foreign Exchange Regulation Act 1947 in relation to goods which had in fact been exported. The Court further held that the attempt to export the goods necessarily precedes the actual export of the goods. Goods become liable to confiscation as soon as the attempt is made. There is no provision in the Act to suggest that this accrued liability is wiped out or extinguished with the exportation of the goods. It may be that after the goods had in fact been exported the liability of the goods to be confiscated may not be enforceable by actual confiscation of the goods. Personal penalty of any person who, in relation to the goods, does or omits to do any act or omission renders the goods to confiscation under S. 113 or abets the doing or omission of such an act has been provided in S. 114. This provision is attracted as soon as the goods incur the liability to confiscation under S. 113 and such liability, as we have earlier held, arises when the goods are attempted to be exported contrary to any prohibition. It is to be noted that at the time when the goods are sought to be exported they are undoubtedly ?export goods? within the meaning of s. 2(19) of the Customs Act. The liability of personal penalty provided in S. 114 of the Act, which arises with the accrual of the liability of the goods to confiscation under S. 113 of the Act at the stage of the attempt to export the said goods, clearly remains and the said liability is capable of enforcement.

Final Decision: Appeal dismissed.