Proof of levy of penalty is a must.

Govindan Nair, CJ.-These writ appeals are taken respectively from the judgments in W.P.Nos. 792,2573, 1427, 1426, 1425,2549, 1428, 885, 1424 and 246 all of the year 1971 W.P. Nos. 792,1427 1426,1425, 2548, 1428 and 1424 of 1971 were taken by, what we may term, agents which term will be clarified when we state the facts. The other writ petitions to which reference has been made were by the exporters.

2. The short question that arose for decision before Ramaprasada Rao, J., in the writ petitions was whether there had been violation of section 12 (1) of the Foreign Exchange Regulation Act, 194/, by the writ petitioners. We shall extract section 12 (1) as amended presently. Section 23-A of the same Act has provided that the restriction or prohibition imposed by section 12 (1) shall be deemed to have been imposed under section 11 of the Customs Act and all the provisions of that Act shall have effect accordingly. It is by virtue of this provision in the Foreign Exchange Regulation Act, that a show cause notice was issued to the writ petitioners relying on sections 113 (d) and (i) read with section 50 of the Customs Act, 1962, asking them to explain why the goods, which were sought to be exported, should not be confiscated and why penalty should not be imposed on them applying sections 113 and 114 of the Customs Act. It is at this stage necessary to extract section 12 (1) of the Foreign Exchange Regulation Act, 1947, as amended-

" 12 (1) The Central Government may by notification in the Official Gazette, prohibit the taking or sending out by land, sea or air (hereinafter in this section referred to as export) of all goods or of any goods or class of goods specified in the notification from India directly or indirectly to any place so specified unless the exporter furnishes to the prescribed authority a declaration in the prescribed form supported by such evidence as may be prescribed or so specified and true in all material particulars which, among others, shall include the amount representing:-

(i) the full export value of the goods; or

(ii) if the full export value of the goods is not ascertainable at the time of export, the value which the exporter, having regard to the prevailing market conditions expects to receive on the sale of the goods in the course of international trade, and affirms in the said declaration that the full export value of the goods (whether ascertainable at the time of export or not) has been or within the prescribed period will be paid in the prescribed manner.

Earlier, the same question arose before this Court, and it was dealt with by Palaniswami, J., in the common judgment disposed of W.P. No. 3758 to 3761 of 1970 and certain other writ petitions. The learned Judge came to the conclusion that there was no material whatsoever before the Collector of Customs, who took action under sections 113 and 114 of the Customs Act, for confiscating the goods and imposing penalties on the petitioners before the learned Judge. Ramaprasada Rao, J., followed the decision of Palaniswami, J., and allowed the two sets of writ petitions, one by the exporters, and the other by the agents, and set aside the confiscation orders and the orders imposing the penalty by applying the principle of the decision rendered by Palaniswami, J. There is no discussion in the judgment under appeal in these cases. Reliance has been placed solely on the reasoning of Palaniswami, J., in the judgment referred to.

3. It is argued on behalf of the Union of India and the concerned. Secretary, the appellants before us, that the reasoning of the Collector and the observations made by him and the inference apparently drawn by the Collector would indicate that there was some secret understanding or agreement between Messrs. Simpson and McConechy Ltd., functioning in India, who are admittedly the agents of Messrs Bevingtons and Sons, Ltd., London and Bevingtons and Sons and the principals, and the agents had similar agreement with the German firm Messrs. Zent

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