ASSISTANT DIRECTOR OF ENFORCEMENT Vs. O.S. IBRAHIM
LAWS(MAD)-1970-9-27
HIGH COURT OF MADRAS
Decided on September 28,1970

Assistant Director of Enforcement Appellant
VERSUS
O S Ibrahim Respondents

JUDGEMENT

- (1.) The appellant herein is an exporter and importer at Madras doing business under the name and style of "Crescent Traders." During January, 1969, he exported 35 kgs. of birds' nests to M/s. International Trading Company at Singapore. Sub-section (1) of Section 12 of the Foreign Exchange Regulation Act, 1947 (hereinafter called the Act) states that for these exports, the party should file a declaration in Form G.R. 1 to the prescribed authority stating that the amount representing the full export value of the goods have either been paid or will be paid within the prescribed period in the prescribed manner. Such a declaration was filed by the appellant as per Exhibit P-5, and in it he stated that the value of the goods was Rs. 700 and that he was exporting the same as a seller. Exhibit P-8, the invoice for this consignment in favour of the International Trading Company at Singapore, also gave the same value. The buyer company opened a letter of credit as per Exhibit P-9 for this amount and the export was made as per the shipping bill Exhibit P-10. Even in this bill the aforesaid value was given. There was a search of the house of this appellant by P.W. 1, the Chief Enforcement Officer on the 27th of January, 1969. During this search, Exhibit P-3, file was seized. Exhibit P-3 (a), the statement of accounts signed by the International Trading Company, disclosed that 30 kgs. of birds' nests were sold for 900 dollars. Deducting the amount already sent to Madras as per the letter of credit (viz., Rs. 700=291 dollars) and the other items of expenditure relating to the clearance, brokerage and sales commission, a balance of 531.61 dollars was shown as outstanding to the appellant. This was also affirmed by Exhibit P-3 (c), letter dated 22nd January, 1969. The Assistant Director of Enforcement filed a complaint before the Chief Presidency Magistrate, Madras, under Section 22 of the Act, stating that this appellant had furnished false particulars in the declaration made by him under Sub-section (1) of Section 12 of the Act and thereby he has rendered himself liable under Section 22 of the Act. The learned Magistrate held that the export was not on the basis of an out and out sale and that the declaration to that effect in the G.O. 1 Form is false. But, he acquitted him on the ground that he had not wilfully furnished any such false information in the declaration. This is on the ground that he had obtained quotations from foreign buyers even before the export. This acquittal is now canvassed by the Director of Enforcements.
(2.) There is no dispute on the question that the appellant exported 35 kgs. of birds' nests after filing the declarations, Exhibits P-5 to P-7, in the prescribed G.R. 1 Form to the concerned authorities. This declaration has to be made under Section 12(1) of the Act, which states that such declarations, supported by such evidence as may be prescribed or so specified, shall be furnished by the exporter to the prescribed authority, stating that the amount representing the full export value of the goods have been or will within the prescribed period be paid in the prescribed manner. Sub-section (2) of this section relates to the repatriation and it prescribes certain restrictions on the sale by the exporter and confers certain powers on the Reserve Bank for scrutiny and verification of the value, etc. Under Section 22 of the Act, when making these declarations to any authority or person for any purpose under the Act, the party should not give any information or make any statement, which he knows or has reasonable cause to believe to be false or not true in any material particulars. Contravention of Sub-section (2) of Section 12 or of any rule or order, is rendered liable to penalty that might be adjudged by the Director of Enforcement under Section 23(1)(a) of the Act. Clause (b) of Section 23(1) also provides for a prosecution. The provisions of the Sea Customs Act, 1879, are attracted for contraventions under Sub-section (1) of Section 12, by virtue of Section 23-A of the Act. Section 167 of the Sea Customs Act provides for confiscation of the articles and the levy of penalty by the Customs authorities for such contraventions. Section 23-D of the Act provides for an adjudication by the Director in matters which come under the purview of Clause (a) of Sub-section (1) of Section 23. Reasonable opportunity should be given to the concerned party in these enquiries and if on such enquiry, the Director is satisfied that the person has committed the contravention referred to above, he may impose such penalty as he thinks fit in accordance with the provisions of the said Section 23. Under the proviso, if at any stage of the enquiry, he is of the opinion that the penalty which he is empowered to impose would not be adequate, he may make a complaint in writing to the Court about the contravention. Section 23(1-A) of the Act provides for the punishments for the contravention of any of the provisions of the Act, or of any rule, for which no penalty is expressly provided in the Act. Rule 3 of the Rules framed under the Act, states that a declaration under Section 12 of the of the Act shall be in one of the forms set out in the First Schedule as the Reserve Bank may, by notification in the Gazette of India, specify as appropriate to the requirements of a case. Rule 5 enables the authorities to insist upon proof about the truth of the declaration, for satisfying themselves that the invoice value stated in the declaration is the full export value of the goods.
(3.) Form G.R. 1, which is prescribed for the declaration, is as below: "Form G.R. 1 ORIGINAL Serial No. (To be submitted toCustoms) EXCHANGE CONTROL. (Declaration to be furnished by exporters before shipping commodities from India to territories outside India other than Pakistan, Afghanistan, Nepal and Bhutan). Name of Steamer/Aircraft No. : Shipping Bill No. & Date: Rupee Value: Port of shipment: 1. Exporters' Name: 2. Country of destination of goods: 3. Short description and quantity of goods:;


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