BIMAL CHANDRA BASAK, J. - (1.) THIS appeal is directed against a judgment and order passed by Sabyasachi Mukharji, J. (as His Lordship then was) in disposing of an application filed under Article 226 of the Constitution of India dated 2nd March, 1973. In the said writ application the petitioner challenged several show cause notices, all dated 26th March, 1970, issued by the Assistant Collector of Customs. The relevant facts of this case have been set out in the Judgment itself. However, we shall set out some of the salient facts. The Petitioner carries on business in various jute goods. In the course of its business the Petitioner sometimes exported large quantity of goods to various foreign buyers. According to the Petitioner the Petitioner entered into several contracts between 15th November, 1965 and 4th April, 1966. On 5th June, 1966, there was devaluation of the Indian Rupee. In order to lessen the hardship of the traders who had contracts with foreign buyers Notification was issued by the Central Government under Section 25(1) of the Customs Act, 1962, (hereinafter referred to as the said Act) on 11th June, 1966. Under the said notification it was provided that the goods specified in the Schedule to the said notification would be exempt from the duty of Customs leviable thereon under the 2nd Schedule of the Indian Tariff Act, 1934. It was recorded by the learned Judge that subject to certain conditions mentioned in the said notification it is undisputed that the goods in question involved in that writ petition are the goods which were specified in the Schedule under the said notification. The conditions mentioned in the said notification are inter alia as follows : '(A) That the goods are sought to be exported under valid 'contracts' with their sales price expressed in foreign currency, entered into on or before the 5th June, 1966. (B) That the contracts referred to in Clause (A)(i) were registered or submitted for registration with the export contracts registration committee on or before the 5th of June, 1966 or (ii) are certified by the Committee that had those contracts been so submitted they would have been accepted for registration in the normal course. (C) That the exporter had entered into a forward contract with a Bank authorised to deal in foreign exchange in India, for the sale of foreign exchange proceeds of goods exported under the contracts referred to in Clauses (A) and (B) on or before the 5th June, 1966. (D) That the authorised dealers in foreign exchange certified that the exporter has entered into a forward contract with him or before the 5th June, 1966 for the sale of foreign exchange representing the proceed of goods to be exported and that rate at which the forward contracts was entered into was on the basis of the rate of exchange then current. (E) That the goods are exported on or before the 30th September, 1966.'
(2.) WE shall also be set out one show cause notice below which was challenged in this proceeding. 'No. 030A/004 Customs House, CalcuttaRegd. A.D.Dated : 26 -3 -1970From :The Asstt. Collector ofCustoms for Exports,Customs House,Calcutta.ToM/s. Juggilal Kamlapat Udyog Ltd.,18, Rabindra Sarani,Calcutta.Dear Sirs,Sub : 70 Bills Per S.S. Jaladhanya Rot No. 905/66, Shipping Bills Nos. D E.D.3. 8808 and 8820, 8819, 8804, 88013,8215, dated 20 -7 -1966 under cover of Bonds exported free of export duty. Examination of the documentary evidence furnished by you in terms of the Bonds and a number of your letters of explanations and contentions reveal that on 31st March, 1966 through the exchange brokers M/s. Poddar Saraogi and Co. of 22, Brabourne Road, Calcutta, you entered into a forward exchange contract Sr 12629 with the Central Bank of India covering U.S. 6000, 100/ - against sight bills at the rate of Rs. 477, 75 -100/ - payable at New York delivery period 31st August, to 30th September, 1966. Your declaration in the form of Annexure 'A' bearing Customs House Registration No. Jute 030A, dated 4 -7 -1966 shows the amount of foreign exchange sold as U.S. 3,751.28 on 31 -3 -1966 which appeared to be the balance outstanding on 6 -6 -1966 from the said forward exchange contract.' Apart from the question of the alleged export of excess quantity, the dispute between the Petitioner and the department is a short one. The question is whether the conditions required to be fulfilled under the said notification have been fulfilled or not and, accordingly, whether the Petitioner was entitled to the exemption of the duty or not. The admitted position further is that both the Clauses (A) and (B) have been complied with. The only contention sought to be raised by the department is that the contract with the Bank authorised to deal in foreign exchange in India was made not subsequent to the contract for the sale of the goods referred to in Clauses (A) and (B). The Petitioner contended firstly that there was a bond in the present case and that in view of the bonds the authorities concerned were not competent to issue the impugned show cause notices and that the Department can institute a suit in the appropriate court for enforcement of their rights under the Bond. This contention was, however, rejected by the Learned Single Judge. It was held that such a clause in the bond does not in any way derogate or take away the jurisdiction of the respondents which they have and the Customs Authority can proceed in respect of any amount payable under the Customs Act. It was held that the bond only gave an additional right against the Petitioner to the respondent authorities for the institution of a suit for enforcement of rights under the bond, whereas the impugned action was taken under the Act, It was further held that in a case where the Customs authorities were contending that the conditions for exemptions had not been fulfilled and as such the Petitioner was not entitled to claim exemption, the Customs authorities need not enforce their rights in respect of the bonds and as such the existence of the bonds did not disentitle them to proceed with the proceedings under the Customs Act.
(3.) SO far as the merits of the case is concerned as already stated it was contended on behalf of the petitioner in the writ petition that the contracts under which the goods had been shipped were entered into before 5th of June, 1966. It is further the case of the Petitioner that these were forward contracts with the Bank authorities to deal with, foreign exchange proceeds of the goods exported under the contracts and such contracts had been entered into by the authorised dealer before the 5th of June, 1966. As already stated the admitted position is that both the contracts had been entered into before 5th of June, 1966. The contract with the authorised dealer was not entered into after the contract for the sale of goods but prior to that. Though a case to the contrary was sought to be raised on behalf of the petitioner to that aspect, the learned judge did not accept the same but proceeded on the basis that assuming the facts alleged in the said show cause notices be true, whether there was non -compliance of the notification and whether the respondent had any jurisdiction to proceed. It was contended on behalf of the appellant herein that there was an implied condition, namely, that the contracts for the sale of foreign exchange should be entered into subsequent to contracts of sale of the goods but prior to 5th June, 1966. The learned judge referred to the clauses in the notification dated 13th of June, 1966 and pointed out that it did not refer to any obligation of entering into contracts subsequsnt to the contract for sale of goods. Reliance was placed on behalf of the department on the show cause notices which provide that the principles enunciated in Section XXVIII of the Exchange Control Manual would govern such contracts for the sale of foreign exchange and in particular reliance was placed on paragraph 4 of the Manual which is as follows : - 'Contracts forward purchase of foreign exchange may be entered into by authorised dealers with their constituents who are exporters provided satisfactory documentary evidence is produced to the authorised dealer to show that the foreign exchange offered is the expected proceeds of a shipment already made or to be made against a firm order received by the exporter.';