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1985 Supreme(Mad) 95
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE V RATNAM
Jensen Enterprises - Appellant
Versus
Collector of Customs, Cochin and Another - Respondent
Case No : W.P. No. 10138 of 1984
Decided On : 18 February 1985
The respondents could not have entertained a reasonable belief that the consignment contained banned items for purposes of export, and, therefore, were justified in having taken action and initiated proceedings in the manner done.
Headnote:
CUSTOMS ACT, 1962 - SECTION 110, 113, 114, 124, 174 - IMPORT AND EXPORT CONTROL ACT, 1947 - SECTION 3 - EXPORT CONTROL ORDER, 1977 - CLAUSE 3(1), 3(4) - SEIZURE OF GOODS - REASONABLE BELIEF - BURDEN OF PROOF - SCIENTIFIC ANALYSIS - CONFLICTING REPORTS - JURISDICTION - WRIT OF CERTIORIFIED MANDAMUS.
Fact of the Case:
The petitioner, a registered partnership firm dealing in Indian medicinal plants and herbs, dispatched 52 bales of Vinca Rosea from Madras to Cochin for export. The consignment was accompanied by a photosanitary certificate and a certificate of inspection. The Customs authorities examined the consignment and issued a 'Let Export Order'. However, two days later, the order was seized and the petitioner was informed that the goods cannot be exported. A show cause notice was issued to the petitioner under Section 174 of the Customs Act, 1962, alleging contravention of Section 3 of the Import and Export Control Act, 1947, read with clause 3(1) of the Export Control Order. The petitioner submitted a reply and requested for a copy of the opinion obtained from the authorities cited in the show cause notice as well as the analytical report issued by the Professor of Pharmacognosy, Ayurveda Research Center, Trivandrum. The petitioner also submitted that samples should be drawn and sent to one of the three recognized institutes maintained by the Government of India for the purpose of testing the consignment and submitting a report. The petitioner did not receive any reply to these representations made. Meanwhile, the Assistant Collector of Customs detained the goods under Section 110 of the Act and directed the petitioner not to remove or deal with the goods. Later, an order was served by the second respondent on the petitioner's clearing agent at Cochin and by this order, the order of detention was superseded and the consignment was seized under Section 110(1) of the Act. The petitioner challenged the order of seizure in the Kerala High Court.
Finding of the Court:
The court held that the respondents could not have entertained a reasonable belief that the consignment contained banned items for purposes of export, and, therefore, were justified in having taken action and initiated proceedings in the manner done. The court also held that the report submitted by the Central Research Institute for Siddha, Arumbakkam, Madras-106, which clearly set out the basis for the identification of the plants in the consignment, in preference to that of the bald reports submitted by the Professor of Pharmacognosy, Ayurveda Research Institute, Trivandrum-12, it has to be held that the consignment in question contained Vinca Rosea root and stem and stems of Rauwolfia canescens. Since both these items are not banned items, the seizure of the consignment on the ground that it contained banned or prohibited items is not in order.
Issues: 1. Whether the respondents could have entertained a reasonable belief that the consignment contained banned items for purposes of export? 2. Whether the seizure of the consignment on the ground that it contained banned or prohibited items was justified?
Ratio Decidendi: 1. The burden of proof lies on the respondents to establish that they had a reasonable belief that the consignment contained banned items. 2. The respondents failed to establish that they had a reasonable belief that the consignment contained banned items. 3. The seizure of the consignment was not justified.
Final Decision: The court issued a writ of certiorified Mandamus quashing the notices issued by the second respondent on 12th July, 1984 as amended by the notice dated 27th July, 1984, and the adjudication proceedings pursuant thereto and directing the respondents to release the goods seized from the petitioner under the order of the second respondent dated 10th August, 1984.
The petitioner is a registered partnership firm dealing in Indian Medicinal plants and herbs and in the course of its business, it buys and sells within the country and also exports medicinal plants to foreign countries. On 10-6-1964, the petitioner dispatched 52 bales of what was described to be Vinca Rosea by road from Madras to Cochin for export from Cochin Port. This consignment was accompanied by a Photosanitary certificate issued by the Directorate of Plant Protection, Quarantine Storage, Department of Agriculture and Co-operation, Government of India, and a certificate of the representative of the buyer showing that they had drawn samples from the consignment and had inspected and sealed the consignment. After filing the necessary shipping bills, the consignment was presented for export and it was examined and inspected by the Customs authorities on 23rd June, 1984 and a 'Let Export Order' was passed by the Customs authorities. However, two days later, the 'Let Export Order' and the shipping bills were seized and the petitioner was informed that the goods cannot be exported. On 12th July, 1984 the second respondent issued a show cause notice to the petitioner purporting to be under Section. 174 of the Customs Act, 1962 (hereinafter referred to as the 'Act') and this was served on the petitioner on 14th July, 1984. It was stated therein that as per technical opinion obtained on the basis of an examination of the samples, the consignment was found to consist of Vinoa Rosea and Rauwolfia serpentina roots (a banned item) and the petitioner was called upon to show cause why the consignment should not be confiscated under Section, 113 (d) of the Act for contravention of Section. 3 of the Import and Export Control Act, 1947, read with clause 3(1) of the Export Control Order. A notice to show cause as to why a personal penalty should not be imposed under S. 114(1) of the Act was also given to the petitioner. Thereafter, on 27th July, 1984, before the petitioner could send a reply within the time mentioned in the notice, an addendum was served upon the petitioner which referred to a preliminary report received from the Professor of Pharmacognosy, Ayurveda Research Center, Trivandrum, to the effect that a major quantity of the sample from the consignment consisted of Rauwolfia serpentina. In view of this, the second respondent stated that the petitioner contravened clause 3(4) of the Export Control Order, 1977, rendering the goods liable for confiscation under Section. 113(1) and 113(d) of the Act read with Section. 3 of the Import and Export Control Act, 1947. In the reply submitted by the petitioner on 10th August, 1984, it pointed out that the opinion furnished to it was not complete and after receipt of the same, it would submit all the relevant documents. On 27th August, 1984, the petitioner submitted a further representation and asked for the copy of the opinion obtained from the authorities cited in the show cause notice as well as the analytical report issued by the Professor of Pharmacognosy, Ayurveda Research Center, Trivandrum. The petitioner also submitted that samples should be drawn and sent to one of the three recognised institutes maintained by the Government of India for the purpose of testing the consignment and submitting a report. The petitioner did not receive any reply to these representations made. Meanwhile, by an order served on the petitioner on 2nd August, 1984, the Assistant Collector of Customs, Export Documentation Center (Customs), Cochin-9, had detained the goods under Section. 110 of the Act, and directed the petitioner not to remove or deal with the goods. Later, on 10th August, 1984, an order was served by the second respondent on the petitioner's clearing agent at Cochin and by this order, the order of detention was superseded and the consignment was seized under Section. 110(1) of the Act. Thereupon, the petitioner moved the Kerala High Court in O.P. No. 7548 of 1984 to quash the o
