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High Court Of Calcutta
Sankar Prasad Mitra, Salil Kumar Datta
THE ASSISTANT COLLECTOR OF CUSTOMS, SPECIAL SECTION, CALCUTTA - Appellant
Versus
UNITED INDIA MINERALS LTD - Respondent
Appeal 309 Of 1971
Decided On : 06/12/1975
CUSTOMS ACT - SECTIONS 113, 114, 124, 51 - EXPORT OF GOODS - ATTEMPT TO EXPORT - CONFISCATION - PENALTY - INTERPRETATION OF STATUTORY PROVISIONS - JURISDICTION OF CUSTOMS AUTHORITIES - EFFECT OF CLEARANCE UNDER SECTION 51.
Fact of the Case:
The United India Minerals Ltd. exported several cases of mica to Italy under four separate shipping bills. The goods were exported under a valid license and were checked by the Appraiser, Customs House, Calcutta, before permitting export. In March 1967, the company was served with a show-cause notice alleging contravention of the Foreign Exchange Regulation Act, 1947, and the Customs Act, 1962. The company challenged the show-cause notice and the proceedings thereunder in the High Court under Article 226 of the Constitution.
Finding of the Court:
The High Court held that the show-cause notice was valid in so far as it alleged contravention of Section 113 read with Section 114 (i) of the Customs Act, 1962. The court found that the offense of "attempt to export" is punishable under Section 114 irrespective of the fact that exportation has already taken place. The court also held that the clearance of goods for exportation under Section 51 of the Act does not prevent the authorities from taking other steps open to them under the statute.
Issues: 1. Whether the Customs Authorities have jurisdiction to inflict personal penalty in a case where the goods have already been exported from the country? 2. Whether the offense of "attempt to export" is punishable under Section 114 of the Customs Act, 1962, irrespective of the fact that exportation has already taken place? 3. Whether the clearance of goods for exportation under Section 51 of the Act prevents the authorities from taking other steps open to them under the statute?
Ratio Decidendi: 1. The offense contemplated in Section 114 is an offense which arises under Section 113 and which are the ingredients of Section 114. Section 113 applies to export goods as defined in Section 2 (19). An offense is committed under Section 113 (d) before the export. 2. The words "would render such goods liable to confiscation" in Section 114 have been used in a notional or hypothetical sense. The expression "would render" refers to the time when the goods are brought into the Customs area for export or an attempt is made to export. 3. Clearance under Section 51 does not, in our opinion, prevent the authorities from taking other steps open to them under the statute.
Final Decision: The appeal was allowed to the extent that the show-cause notice dated March 8, 1967, in so far as it alleges contravention of Section 113 read with Section 114 (i) of the Customs Act, 1962, is valid. The Rule issued by the learned trial Judge in respect of contravention of Section 113 read with Section 114 (i) is discharged and all interim orders in respect thereto are vacated.
( 1 ) THIS is an appeal from a judgment of Sabyasachi Mukharji, J. delivered on January 20, 1971. In an application under Article 226 of the Constitution the petitioner. United India Minerals Ltd. , which is the respondent in this appeal challenged a show-cause notice dated March 8, 1967 issued by the Assistant Collector of Customs, Special Section. Calcutta, the appellant No. 1 herein. The petitioner also challenged the proceedings under the said notice.
( 2 ) THE United India Minerals Ltd. is a company which carries on business of nrning and exporting mica. In July and August. 1964, the company exported several cases of "no. 6 Black Spatted Loose Mica Splittings" of the 1st and 2nd qualities to Italy by S. S. "malacca". The goods were exported under four separate shipping bills. On February 4, 1964 the Joint Chief Controller of Imports and Exports issued a Trade Notice whereby exports of some varities of Mica were prohibited and some varities were allowed to be exported subject to a minimum F. O. B. price per k. g. as specified in the Trade Notice. The export of Mica of varieties other than those specified in the Trade Notice could be exported without any restriction as to the minimum f. o. b. prices. "no. 6 Black Spotted Loose Mica Splittings" of the 1st and 2nd qualities were not specified in the Trade Notice. The same could be exported without any restriction as to the minimum f. o. b. price. The export of the several cases of "no. 6 Black Spotted Loose Mica Splittings" of the 1st and 2nd qualities were authorised by the Joint Chief Controller of Exports, Calcutta, by endorsements made on the respective shipping bills. At the instance of the Appraiser. Customs House. Calcutta, some of the oases of the goods selected at random were checked before permitting export. It was found that the goods so selected were in conformity with the declaration made in the shipping bills, namely, that they were 'no. 6 Black Spotted Loose Mica Splittings' of the 1st and 2nd qualities. And the appraiser made endorsements on the shipping bills testifying the above fact.
( 3 ) ON 8-3-1967 the Company was served with a show-cause notice. By this notice the Company was asked to show-cause why penal action should not be taken against it under Section 114 (i) of the Customs Act, 1962. The notice has referred to various correspondence that passed between the company and the foreign buyers and thereafter, it is alleged that export of Mica from India was governed by the -provisions and/or conditions stipulated in the Trade Notice dated February 4, 1964. On reasonable belief that the documents useful for or relevant for the provisions of the Customs Act and goods liable to be confiscated were secreted therein, the office premises of the company and other connected places were searched by the Officers of the Customs House in October, 1964. In course of the search certain documents were seized. It was alleged in the show-cause notice that in order to circumvent or by-pass the provisions or stipulations contained in the Trade Notice of February 4, 1964 and in the Export Trade Control Restrictions, deliberate plans and arrangements were drawn up and implemented by the company in collaboration with Italian buyers whereby the goods covered by the statements contained in the show-cause notice were exported as a result being misdescribed and misdeclared as Black Spotted Mica Splittings. The goods were not Black Spotted Mica Splittings of the 1st and 2nd qualities, it is further alleged in the show-cause notice that the declaration was made to make it appear to the concerned authorities in India that the goods belonged to a variety for which no floor prices were applicable. In the premises, the goods in question were exported and declarations to the concerned authorities were made on the basis of prices lower than the floor prices applicable to the actual goods exported. It is alleged further in the show-cause notice that there had b
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