Sabyasachi Mukharji, J. - (1.) The petitioner at all material times carried on business in jute goods. In the course of the said business the petitioner entered into several contracts with one Reliance Commercial Corporation, Bombay, for file sale of hessian cess bags. The said contracts with Reliance were on F.O.B. basis. The said Reliance Commercial Corporation, Bombay, it has been alleged, in its turn used to enter into contracts with the foreign buyers. According to the petitioner's case the petitioner had nothing to do with the contracts of Reliance Commercial Corporation, Bombay, with the foreign buyers. I am not here concerned actually whether the petitioner had anything to do with the foreign buyers and I do not decide that question. From the tenor of the show cause notice it appears that it is the case of the respondents that the petitioner had something to do with the sale to the foreign buyers but as mentioned hereinbefore, I do not decide this question in this application. It has been further alleged by the petitioner that the petitioner used to get the contracts with the said Reliance Commercial Corporation, Bombay, registered with the Export Contract Registration Committee. On the 4th May, 1967, the petitioner presented four shipping bills along with the declaration under Section 12 (1) of the Foreign Exchange Regulation Act, 1947, for the purpose of effecting shipment of goods to Yugoslavia for and on account of the said Reliance Commercial Corporation. Bombay. On the 26th July. 1967, the petitioner presented three shipping bills for effecting shipment of goods for and on account of the said Reliance Commercial Corporation, Bombay, to Yugoslavia along with the declarations under Section 12 (1) of the Foreign Exchange Regulation Act, 1947. The values declared in the said shipping bills and declarations under Section 12 (1) of the Foreign Exchange Regulation Act, 1947, were on the basis of the values mentioned in the contracts of the petitioner with the Reliance Commercial Corporation, Bombay. That is an admitted position. It has further been alleged by the petitioner that the values mentioned were the market price on the material dates. It is not necessary for me to decide if they were so. On the 31st August, 1967, a show cause notice dated the 26th August, 1967, issued by the respondent No. 1, namely, the Assistant Collector of Customs for Exports, Calcutta, was received requiring the petitioner and the said Reliance Commercial Corporation Bombay, to show cause why the goods covered by the said shipping bills should not be confiscated under Section 113 (d) of the Customs Act, 1962, and why penal action should not be taken against the petitioner under Section 114 (1) of the Customs Act, 1962. It was alleged in the said show cause notice that the goods that were sought to be exported without declaring the full export value on the shipping bills and G.R.I. forms were in contravention of the provisions of Sections 11, 14(1) and 50(2) erf the Customs Act, 1962, read with Section 12 (1) of the Foreign Exchange Regulation Act, 1947 and the notification thereunder and Sections 23A and 23B of the Foreign Exchange Regulation Act, 1947. It appears that in respect of the shipping bills as mentioned hereinbefore presented on the 4th May, 1967, the duty payable on the goods to be exported was paid on the 13th November, 1967. in January. 1968, the said export duty paid by the petitioner had been refunded. Prior thereto on the 18th November, 1967, another show cause notice was issued by the respondent No. 1, namely, the Assistant Collector of Customs, requiring the petitioner and the said Reliance Commercial Corporation, Bombay, to show cause why the goods should not be confiscated under Section111 (d) of the Customs Act, 1962 and why penal action should not be taken under Section 112 of the Act for violation of Section 12 (1) of the Foreign Exchange Regulation Act. 1947, read with Section 11 of the Customs Act. The petitioner replied to the said notices and thereafter on the 5th September, 1968. moved this Court under Article 226 of the Constitution and obtained a Rule Nisi being Matter No. 616 of 1968 challenging the aforesaid show cause notice. Matter No. 616 of 1968 was heard and disposed of by S. P. Mitra, J. and by judgment delivered on the 17th June, 1970. S. P. Mitra, J. made the Rule absolute but liberty was given to the respondents to proceed under the Customs Act, 1962, if they were so entitled under the law without prejudice to any of the petitioners' rights and contentions in the matter. Thereafter it appears that on the 10th July, 1970, another show cause notice was issued. It is this show cause notice which is the subject-matter of the challenge in this application under Article 226 of the Constitution,
(2.) By the said notice dated 10th July. 1970, it has been alleged that the F.O.B, Values declared on the shipping bills were on the basis of the sale contracts entered between the two firms, viz., the petitioner and the Reliance Commercial Corporation, Bombay. It has been further alleged that the F.O.B. price declared jn the shipping bills were not the actual sale prices at which the goods were sold to the foreign buyers. It has been stated that the F.O.B. values should have been on the basis of the sale contracts entered between the Reliance Commercial Corporation and M/s. Jugotaksil Impex, Yugoslavia, the foreign buyer. It has been further stated that the goods sought to be exported under shipping bills appeared to have been misdeclared in respect of material particulars and value and thereby an attempt had been made to export the goods without declaring the correct F.O.B. value of the goods in the shipping bills in contravention of Section 50 (2) of the Customs Act, 1962. It has been stated that the alleged misdeclaration of value in the shipping bills resulted in a loss of foreign exchange to the extent of about Rs. 78,295/-, particulars whereof were mentioned in the said notice. Thereafter the notice further stated that the goods, therefore, appeared to be liable to confiscation under Section 113 (i) of the, Customs Act, 1962 and that M/s. Reliance Commercial Corporation also were liable to penal action under Section 114 (i) of the Customs Act, 1962, The petitioner was asked to show cause against the proposed action. After certain correspondence the petitioner moved this High Court under Article 226 of the Constitution on the 29th of July, 1970 and obtained a Rule Nisi, as mentioned hereinbefore.
(3.) Appearing in support of this petition Mr. Bajoria, learned Advocate for the petitioner, contended, firstly, that under Section 113 (i) of the Customs Act, 1962 an order for confiscation could only be passed if the goods were dutiable goods or prohibited goods and did not correspond in any material particulars with the entry made or in case of baggage with the declaration under Section 77 of the Act. It was argued by Mr. Baioria that in the facts and circumstances of the case these goods in question were not dutiable goods inasmuch as no duty remained to be paid in respect of such goods and as such would not attract the provision of Section 113 (i) of the Customs Act, 1962. It was secondly, urged that even assuming that the allegations in the said notice to be true the alleged misdeclaration of the values of the contract with the foreign, buyer were not in respect of material particulars and as such the provision of Section 113 (i) of the Customs Act, 1962 could not be attracted. Thirdly, it was contended that there was no obligation on the part of the petitioner to declare the value on the basis of the price paid by the ultimate foreign buyer. Lastly it was submitted that Section 114 (ii), under which the petitioner was prosecuted, could not be attracted in this case in the facts and circumstances of this case,;