- (1.) THIS is an appeal against the judgment and order of Sabyasachi Mukharji, J, dated June 9, 1972 whereby the rule nisi was made absolute. The facts, in short, according to the petition are as follows: The petitioner firm has been carrying on the business of exporter of jute goods from India to foreign countries including united States. Contracts were entered into by the petitioner on December 19, 1961 for shipment in January 1962 of jute goods to Messrs Frank samuel and Co. of New York, through their agents M/s. C. J. Dammann Inc. , new York, U. S. A. In January 1962 the price of jute goods contracted for appreciated considerably and to avoid severe loss, the petitioner through the said agent arranged for switching the shipment over to April/june, 1962. The petitioner thereafter made arrangement for shipment of a consignment of 435 bales of hessian cloth by S. S. "city of singapore" and submitted shipping bills along with G. R. I, forms with the Customs authorities on June 1, 1962. The gain resulting from the sale of January goods in January itself was allowed to the buyers and the profit to them was discounted from the sale price for subsequent shipment and shown accordingly in the shipping bills and G. R. I. forms which was thus not the full export value of goods. On June 5, 1962 as required Shantimoy Mukherjee Customs sarkar of the petitioner and one m. V. Ashar appeared before Krishnamurty, the Customs Appraiser and supplied to him all information regarding the consignment. The Appraiser apparently satisfied dictated to them a letter to be written by the petitioner firm to the Customs authorities on the basis whereof the consignment would be permitted to be exported. Relying on such representation, the letter as dictated signed by Ashar was delivered to the Appraiser. By that letter of june 5, 1962 the adjustment of price as aforesaid was admitted on behalf of the petitioner and it was further stated that there was no malafide in the action and further the firm did not want any show cause memo and would agree to abide by the decision of Custom. The petitioner denied that Ashar had any authority on its behalf to waive the issue of show cause memo or to agree to abide by the decision of the Customs authorities. Thereafter they appeared before S. K. Srivastava the Additional collector of Customs, Calcutta in short interview when few questions were put to them. In the meantime s. s. "city of Singapore" left without taking the consignment.
(2.) ON June 6, 1962 the Additional collector of Customs passed an order in respect of the said goods, the relevant extracts whereof are as follows : "the explanations reveal that a sort of "phatka" business is being carried on by the so-called consignees abroad, and that in this business the so-called shippers in India are playing the role of the brokers, and in that role they have undertaken to remit to them invisibly the profits earned out of the 'phatka' business. The shippers appear to be conscious that they cannot remit the aforesaid profits legally, and hence they have chosen to harness into service the medium of export business in this connection. The F. O. B. values declared by the shippers in the G. R. Forms are, on their own admission, incorrect and the object of making these incorrect declarations is unethical and otherwise highly objectionable on more than one ground of economics. . . . . . " "in view of the foregoing i hold that an attempt has been made by messrs. Toolsidas Jewraj to ship the goods covered by the Shipping Bills and the G. R. Forms mentioned in the appendix, without making a declaration that the amount representing the full export value of the goods has been or will, within the prescribed period, be paid in the prescribed manner. In terms of the notification No. 2 (17)-F. I 47 dated 4th August, 1947, as amended, issued under Section 12 (1) of the Foreign exchange Regulation Act, 1947, as amended the export of the present goods, without making the declaration, referred to in the previous sentence is prohibited. Accordingly, the shippers in the present case have committed offences attracting the provisions of section 167 (8) of the Sea Customs Act as read with Section 23a and 23b of the Foreign Exchange Regulation Act, 1947 as amended. The goods in the present case are, therefore, liable to confiscation and the shippers are liable to personal penalty, under the aforesaid sections and also under Section 167 (37) of the Sea Customs Act. In view of the foregoing Order, I confiscate the goods in question under section 167 (8) of the Sea Customs Act, read with Section 23a of Foreign Exchange regulation Act. In lien of confiscation, i impose fine of Rs. 3,00,000/- (Rupees three lakhs only ). The fine should be paid within a week hereof. A personal penalty of Rs. 50,000/- (Rupees fifty thousand only) is also imposed on the shippers under Section 167 (8) the Sea Customs Act. The personal penalty should be paid within three days of the receipt of this order. "
(3.) THE petitioner preferred an appeal against the said order under Section 188 of the Sea Customs Act, 1878 to the Central Board of Revenue which by its order of December 10, 1963 affirmed the findings and order of the additional Collector. It was observed therein. "from the foregoing it is evident that the correct reason for the reduction in price was not that the appellants requested for postponement of the delivery period, but the facts that hypothetical profit, which was in the nature of a speculative gain, was set off from the export value of the goods. It appears that in anticipation that the profits made in the speculative transaction, namely, if the goods were sold in january elsewhere, would not be allowed by the Reserve Bank, the appellant made deduction of the same from the export value of the goods. Since such a deduction did not have the permission of the Reserve Bank, it was illegal. In any case, it is clear that the value declared in the shipping bill and G. R. I. form was not the full export value of the goods, and as such, there was clearly a contravention of Section 12 (1 ). of the Foreign Exchange Regulations act, for which the appellant was liable to punishment under Section 167 (8), sea Customs Act by the application of section 23 (A), Foreign Exchange Regulation act and Section 19 of the Sea customs Act. ";