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1987 Supreme(Cal) 213
High Court Of Calcutta
S. R. Roy
S.A.INTERNATIONAL - Appellant
Versus
COLLECTOR OF CUSTOMS - Respondent
C. O 7987 (W) Of 1985
Decided On : 06/25/1987
ASHOKE KUMAR GANGULY, BHOLANATH SEN, KALYANI CHAUDHURY, N.C.Roychowdhury
A show cause notice issued under Section 124 of the Customs Act, 1962 must be based on proper grounds and must disclose the basic facts and materials which weighed with the adjudicating authority in issuing the notice.
Headnote:
CUSTOMS ACT, 1962 - SECTION 124 - SHOW CAUSE NOTICE - GROUNDS - INCOMPLETE INVESTIGATION - INCONCLUSIVE EXAMINATION - SURMISE AND CONJECTURES - LACK OF BASIC FACTS - JUDICIAL REVIEW - ARTICLE 226 OF THE CONSTITUTION OF INDIA.
Fact of the Case:
The petitioner challenged the show cause notice issued under Section 124 of the Customs Act, 1962, alleging that the notice was based on surmise and conjectures, did not disclose any grounds, and was issued in an unseemly haste and in over-zealous manner.
Finding of the Court:
The Court held that the show cause notice was issued without any application of mind and was founded upon surmise and conjectures, and hence it was quashed. The Court further held that the respondents were directed to assess the duties payable by the petitioner forthwith and upon the payment of the duty in full, by the petitioner, the respondents are to release the goods without any loss of time.
Issues: Whether the show cause notice was valid and legal.
Ratio Decidendi: The Court held that the show cause notice was issued without any application of mind and was founded upon surmise and conjectures, and hence it was quashed. The Court further held that the respondents were directed to assess the duties payable by the petitioner forthwith and upon the payment of the duty in full, by the petitioner, the respondents are to release the goods without any loss of time.
Final Decision: The Court allowed the writ application and directed the respondents to assess the duties payable by the petitioner forthwith and upon the payment of the duty in full, by the petitioner, the respondents are to release the goods without any loss of time.
( 1 ) BY this writ petition the petitioner challenged the show cause notice No. S. 15-25/25-5ib dated 9. 5. 1985. The said show cause notice was issued under Section 124 of the Customs Act, 1962 (For short the said Act hereafter ). The said show cause notice read thus: notice UNDER SECTION 124 OF THE CUSTOMS ACT, 1962 subject:- Import of 246. 140 M/t in 108 bundles of low carbon mild steel CRCA sheets declared as defective Ex-s. s. Vanil, rot No. 217/85 dated 2. 5. 1985 line No. 61 and 196. 980 M/t low carbon mild steel CRCA sheets declared as defective ex-Vanil, rot No. 217/85, line No. 62 importers M/s. S. A. International, P-3, New C. I. T. Road, Calcutta - 73, Shippers M/s. ETS A-P Landowski Samis, Paris, Port of shipment Antwerp - undervaluation and unauthorised import - regarding. 1. M/s. C Bose and Sons, Customs House Agents filed two bills of entry on behalf of M/s. S. A. International, P-3, New I. I. T. Road, Calcutta 73 for clearance of two consignments of low carbon mild steel defective CRCA sheets (as declared) shipped from Antwerp ex-s. s. Vanila rot No. 217/85, line No. 61 and 62 covering quantities 246. 14 M/t and 196. 98 M/t clearances of the said consignments against the following import trade control licences.
Line No. 61 Nature of licence Licence No. Face value of licenses & value debited REP licence endorsed P/l 3073640 of dt. 13-7-1984 with para. 138 13 (ii) A. M. 1985 Policy Rs . 133500 Fl. 3 Rs . 66750
Name of the licence
the holder
1. Monali Sea Food
Pvt. Ltd. , Calcutta
2. -do- -do- P/l 3073639
dt . 13-7-1984
Fl. 3
Rs . 20800
Rs . 10400
3. Pronier Enterprises REP licence P/l 3075910 Rs . 165000
32/46 Chandi Ghosh
Road, Calcutta-40
endorsed
with para. 13 of A. M.
1985 Policy
Dt . 16-1-1985
A-16 (1) Rs . 33000
4. -do- -do- P/l 3075907
Dt . 16-1-1985
A-16 (ii)B P/l3075907
Rs . 165000
Rs . 33000
5. Jalan Commercial
Agency, 514, Rabi A. M.
ndra Sarani , Calcutta-5 6. -do- -do- P/l 3075809 1985 Policy A-16 (II)B
REP licence endorsed
with para. 138 of
Rs . 163000
dt . 16-1-1985
Rs . 32600
Rs . 200000
Dt . 11 -2-1985
A-16 (II)B
Rs . 40000
7. -do- -do- P/l 3075786
Dt . 16-1-1985
A-16 (i )
Rs . 163000
Rs . 32600
8. Associated Industries,
Rs . 395560
Balu Bazar , Cuttack
-do- P/l 3038681
Dt . 4-3-1985
A-5 P/l 3075005
Rs . 197780
9. Kalinga Enterprises, REP licence endorsed
Rs . 75200
22, Canning A. M.
Street, Calcutta-1
with para. 138 of
1985 Policy
Dt . 16-1-1985
A-5
Rs . 13334
Toal licence debited
Rs . 459464
Line No. 62
1. Metal & Alloy Indus
tries , 2, Ganesh Ch.
REP licence endorsed P/l 3075970
with para. 138 of A. dt . 18-2-1985
Rs . 119600
__________
Avenue, Calcutta-13 M.
1985 Policy
A-5 Rs . 59787
2. -do- -do- P/l 3075084
dt . 5-1-1985
A-5
Rs . 336500
__________
Rs . 168250
Total cence debited
Rs . 228037
Total declared FOB value
Rs . 820592. 58
Total value of licences produced
Rs . 687501. 00
Balance left uncovered
Rs . 133091. 58
Thus, prima facie, as per declaration, goods valued at Rs. 1,33,091. 58 is not covered by any licences.
( 2 ) ALL the import licences mentioned above are non-transferable licences issued with actual user conditions. The licence holders in turn have issued letters of authority in favour of M/s. S. A. International, P-3, New CIT Road, Calcutta-73, authorising them to import goods, without specifying the nature of goods, description of goods quantity or any other particulars required by them. It is the condition of the licences that the goods imported shall be handed over to the licence holders for use in their factory.
( 3 ) IN respect of line No. 61, two licences belong to M/s. Monali Sea Food Pvt. Ltd. , Calcutta issued against export product classifiable under F 1. 3 of Appendix 17 of the Import Policy. SI. No. F 1. 3 relates to fish and fish products, all others including frog legs. As per para 138 (1) of A. M.
