Decided on August 28,1958

Sethi Brothers Appellant
Asst. Collector Of Central Excise And Land Customs And Ors. Respondents


G. Mehrotra, J. - (1.)AS these two rules give rise to a common question of law and fact, they can be disposed of by one common judgment. The petitioner in Rule No. 36 is a partnership firm registered under the Indian Partnership Act and carries on business amongst other places at Biswanathghat in the district of Darrang. The general guarantee bond was executed in the name of M/s. Bhuramal Dhalulal through Sri Manmall Sethi in favour of the Assistant Collector of Central Excise and Land Customs, Gauhati for transporting goods from Assam to other parts of Indian Union through Pakistan. The petitioner succeeded to the interest of M/s. Bhuramal Dhalulal with effect from 10 -4 -1956 and continued to despatch goods under the aforesaid guarantee bond. The bond subsequently for the year 1955 -56 was submitted by the petitioner and was accepted and a permit was issued by the respondent No. 1 in the name of the petitioner -firm by which they were permitted to transport Jute, Mustard Oil seeds, Mustard Oil, Tea, Foodstuff and Spices etc. for the financial year 1955 -56 from one place in Indian Union to any other place in Indian Union through Pakistan. The conditions embodied in the bond were that the partners of the firm guaranteed to produce within two months from the date of despatch of goods from Assam, a certificate from the consignees of the due landing and receipt of the goods by them, and they further undertook not to divert any cargo through Pakistan. It was further provided that in the event of short delivery at destination as compared with the consignment despatched from Assam, the petitioner -firm would undertake to pay duty and cess and such penalty as might be levied under the Land Customs Act and the rules thereunder. On 7 -3 -1955 and 12/3/1955, the petitioner -firm despatched 1052 maunds of Jute from Tezpur Steamer ghat to Calcutta via Dhubri through Pakistan water in a vessel - -"M. V. Raju" for being delivered to M/s. Ramdea Harakchand, Calcutta under the terms of the aforesaid bond.
The vessel was owned by M/s. Neptune Navigation of 133 Canning Street, Calcutta which carried goods on hire by water as common carrier from all parts of Assam to the other places of Indian Union through Pakistan. On 20 -3 -1955 the vessel left Dhubrighat; but according to the petitioner, the vessel caught fire on the way near Tepakhola in Eastern Pakistan on the river and the whole lot of jute was burnt down to ashes with the result that not a single fibre of jute reached Calcutta. The petitioner was therefore unable under the terms of the guarantee bond to submit the necessary certificate.

(2.)THE petitioner thereafter informed the respondent No. 1 - -the Assistant Collector of Central Excise and Land Customs about the incident. The Assistant Collector, Central Excise and Land Customs issued a demand notice dated 12/16th April, 1956 demanding payment of Rupees 3247/8/ - on account of customs duty and Rupees 27/2 on account of cess. On the issue of this demand notice by the Central Excise and Land Customs Collector, the petitioner -firm submitted a petition to the respondent No. 1 on 4 -5 -1956 stating the reasons for which the petitioner could not be asked to pay customs duty and cess duty for non -production of a certificate as to the arrival and receipt of the goods by the consignees.
The Assistant Collector by his order dated 13 -8 -1956 informed the petitioner that an appeal against the order passed by the Assistant Collector lay to the Collector of Central Excise and Land Customs. The petitioner thereafter preferred a revision petition before the Secretary to the Government of India, Ministry of Finance, under section 191 of the Sea Customs Act within, the period allowed by law. But that was refused on the ground that no appeal had been filed to the Collector of Central Excise. On these facts, a petition, under Article 226 of the Constitution has been filed praying for a writ of mandamus or any other direction or order directing the respondent to cancel, recall or otherwise forbear from giving effect to the order dated 12 -4 -1956 passed by the respondent No. 1 and for quashing of the aforesaid order. Further mandamus has been claimed restraining the respondent from acting in terms of the order dated 12 -4 -1956.

In the Civil Rule No. 101, the petitioner carries on business in the district of Darrang in jute, mustard seeds and various other commodities. The general guarantee bond was executed by the petitioner in favour of the Assistant Collector of Central Excise and Land Customs, Jorhat and on the basis of the aforesaid bond, permission was granted in the name of the petitioner to transport goods from Assam to the other parts of the Indian Union through Pakistan territory. The conditions were similar to those mentioned in the guarantee bond referred to in the other petition. The petitioner despatched 3053 maunds of jute from Tezpur to Calcutta via Dibrugarh through Pakistan waters in the same vessel - -"M.V. Raju" to M/s. Milapchand Hiralal. This vessel is the same which was carrying goods despatched by the petitioner in the other petition and caught fire with the result that the petitioner's goods were totally destroyed and no certificate could be produced. A notice of demand was issued on 12 -4 -1956 on the petitioner demanding payment of Rs. 9420/ - on account of customs duty and Rupees 78/ - on account of cess. Representation was made to the Assistant Collector and the petitioner received a reply to the effect that an appeal lies to the Collector of Central Excise and Land Customs and the appeal being beyond time, no appeal could be filed. A letter dated 5 -11 -1956 was received by the petitioner from the Assistant Collector informing him that as the goods were despatched under the terms of the general guarantee bond executed by the petitioner, he was liable to pay the Government dues and the department had nothing to do with M/s Rajasthan Jute Company of Tezpur. Similar relief has been claimed in this petition also.

(3.)THE contention of the petitioner's counsel is that there is no liability of the petitioners to pay the amounts referred to in the notices of demand as customs duty under the terms of the bond.
The bond only required that a certificate had to be given after the goods have reached Calcutta within two months of the despatch and in case any of the goods was diverted to Pakistan, the petitioners were liable to pay the customs duty. But the contract did not provide for any payment of duty on the goods which are lost by fire or any other such accident in the Pakistan waters. In the present case, there was no diversion of any of the goods to Pakistan and thus there was no liability to pay the customs duty on the goods lost by fire. It was further urged that there was no power given to the respondents to pass any order under any of the statutes demanding the customs duty from the petitioners and the notices of demand are illegal and without jurisdiction and should be quashed.

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