B.N.Banerjee, J. - (1.) Under a license to import nylon buttons from soft currency area upto value of Rs. 8,000 the petitioner firm imported one consignment of buttons allegedly from Hong Kong of the value of Rs. 3612.54NP. (Rs. 3600/-according to affidavit-in-opposition), hereinafter referred to as the first importation. The goods were allowed to be cleared on payment of duty. When the next consignment of buttons, valued at Rs. 4360/- in the bill of entry, arrived, the clearance of the goods was held up because the customs authorities considered the declared value to be too low. The petitioner firm sought to justify the declared value on the theory that the goods being of Hong Kong manufacture, the value was cheap. In support of this theory, the petitioner produced before the customs authorities certain documents, which, however, failed to impress the customs authorities.
(2.) On March 18, 1960, the petitioner was charged with misdeclaration of the value of the consignment in the following language:-- "Examination reveals that the goods have been packed in small cartons on which no country of origin is indicated. Examination of the samples from the consignment further reveals that the subject goods are identical with goods of Japanese origin. The goods of, like kind and quality are correctly valued at Rs. 17/- per Gr. gross c. i. f. The correct value of the consignment on this basis comes to Rs. 18,530/-. It is, therefore, observed that by having declared the value of the goods to be Rs. 4360/- you have deliberately under-valued the goods to the extent of Rs. 14,170/-. You are, therefore, directed to show cause why the goods should not be confiscated under Section 167(37) Sea Customs Act and action taken against you as persons concerned in the deliberate misdeclaration of the value of the goods". The petitioner firm showed cause, in writing denying the charge of mis-declaration. Along with the statement showing cause, the petitioner attached certain documents by which the petitioner aspired to establish the Hong Kong origin of the imported goods.
(3.) Thereafter, on April 19, 1960 there was another notice served upon the petitioner firm to show cause why the first importation of buttons should not be treated as unauthorised and action should not be taken against it under Section 167(8) of the Sea Customs Act, because of the following reason: "The licence was issued under the 'Export Promotion Scheme' for the period April-September '59 subject, inter alia, to the conditions laid down in para 6 of Appendix XXIII of the Policy Book for the corresponding period in terms of which you are required to export a specific variety of finished products up to a prescribed value (in this instance 400% of the c. i. f. value of the goods) within six months of the importation. As the period of six months is already over since the importation of the above noted consignment, you were asked under this office letter of even no. dated 19-3-60, to produce evidence of export of the finished products of proportionate value within a week so as to determine validity of the importation under reference as well as your competence to fulfil the conditions of the licence for further importations. You have, however, failed to comply with the requirements. It appears that your non-compliance with the condition of the licence has rendered the importation unauthorised in terms of Section 3 of the Imports and Exports (Control) Act "47 and the I. T. C. order dated 7-12-55 read with Section 19 of the Sea Customs Act, since the licence produced by you is valid to cover the importation only on condition specified above. You are, therefore, directed in show cause within a fortnight hereof why the importation should not be treated as unauthorised as stated above and action taken against you as persons concerned under Section 167(8) of the Sea Customs Act. You are also required to show cause why in the circumstances the licence under reference should not be treated as invalid for further importation, yon being incompetent to fulfil the conditions laid down therein." The petitioner firm showed cause in writing by which it disputed the jurisdiction of the customs authorities to take proceedings as proposed and asserted that the conditions of the licence had all been fulfilled.;