TMI Blog1994 (1) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner had exported necessary quantity of Cassia Oil manufactured by the supporting manufacturer M/s. Net con, Bangalore. The second licence for the import of 80 Metric Tonnes of Cassia was utilised by importing in two lots, the first for 27 Metric Tonnes and the second for 54 Metric Tonnes of Cassia. Before the first import of 27 Metric Tonnes could be cleared, there was a raid on the premises of the petitioner-firm by the officers of the Directorate of Revenue Intelligence. The premises of the supporting manufacturer was also inspected by the officers. Thereafter the imported Cassia was cleared and similarly the second import of 54 Metric Tonnes was cleared in July-August, 1993. It is also contended that 50% of the export obligation in respect of the second licence has also been complied with. While so, the office premises of the petitioner was again raided on 21-10-1993 and all the original documents relating to the import and export of Cassia have been seized and removed by the second respondent. The petitioner is aggrieved by a summons issued by the second respondent on 22-10-1993 seeking the attendance of the petitioner to give evidence and produce documents. The summons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion vests only with the Licensing Authority and not the Customs Authorities. The petitioner relies on the recent judgments of this Court to which I will make a reference a little later. 5. In the counter-affidavit filed on behalf of the second respondent, it is stated that under the D.E.E.C. Scheme no part of the goods imported could be sold or otherwise diverted to the local market. The exemption from payment of duty was in accordance with the Customs Notification 159/90. The information received by the respondents goes to show that in contravention of the Customs Notification, the petitioner had also sold the consignment of Cassia imported free of duty. Further, instead of exporting Cassia Oil they had exported only groundnut oil. According to the respondents the said act of the petitioners would attract the provisions of the Imports and Exports and Control Policy as well as Customs Notification 159/90. It is also contended that only after investigation it can be found whether there is a violation of the licence conditions or the provisions of I.E.C. Act or the Customs Act. The second respondent as an investigating agency after investigating the matter, they would submit repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He also refers to ALC Circular 8/90 dated 10-8-1990, which contains the following clauses :- "The above actions shall be without prejudice to any other action that may be taken against the licence holder under the IMPEX Act and the Customs Act for non-fulfilment of export obligation, mis-utilisation of imported materials, violation of the provisions of this scheme, including enforcement of the legal undertaking and also disentitling the licence holder for further licences/release orders under the Import Export Policy." Mr. Thiagarajan also relies on the form of indemnity-cum-guarantee bond executed by an applicant for a licence under the DEEC Scheme, to suggest that the application is only towards the Chief Controller of Imports and Exports. On the other hand Mr. C.A. Sundaram, brings to my notice Clause 6(e) and 6(f) of the bond which clearly indicate that the importer makes himself liable for various legal action including the confiscation of the imported material at any time before or after the completion of the export obligation period. Clause 6(f) of the bond is very important and in my opinion, cuts at the root of the case of the petitioners. It is as follows :- "Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the Customs Act. In particular I am of the opinion that the definition of the word 'smuggling' under Section 2(39) of the Customs Act is important. ""smuggling" in relation to any goods, means any act or omission which will render such goods liable to confiscation under Section 111 or Section 113;" Consequently we will have to refer to Sections 111 and 113 of the Customs Act. In particular Section 111(o) of the Customs Act is relevant and it is quoted below:- "any goods exempted, subject to any condition, from duty or any prohibition in respect of the import thereof under this Act or any other law for the time being in force, in respect of which the condition is not observed unless the non-observance of the condition was sanctioned by the proper office;" Suffice it to note that Section 113 of the Customs Act provides for confiscation of goods attempted to be improperly exported and indicates the circumstances under which the goods are said to be improperly exported. 10. East India Commrl. Co. v. Collector of Customs [1983 (13) E.L.T. 1342 (SC) = A.I.R. 1962 S.C. 1893] is relied on, for the proposition that Section 167(8) of Sea Customs Act, could be invoked only i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ist of the offence under Section 12(1) of the Foreign Exchange Regulation Act read with Sections 19 and 167(8) of the Sea Customs Act, is an export or attempted export, which is in violation of the obligation of the intending exporter to make a declaration, to furnish documents called for, to satisfy the authorities, and to obtain permission to export. Where he has done all this, clearly he has not violated Section 12(1). If he has misled the authorities by false representations, or failed thereby to repatriate foreign exchange, by virtue of his obligation under Section 12(2) those are different offences, for which separate and specific penalties can be imposed." Accordingly, it was held that the Customs Authority had no jurisdiction to proceed with the show cause notice. In my opinion, even this case does not deal with the implications of the scheme in question taken along with Customs Notification 159/90. 12. On the other hand, there are two interesting and illuminating judgments of the Supreme Court reported in Madan Lal Anand v. Union of India [1990 (45) E.L.T. 204 (S.C.) = AIR 1990 S.C. 176] and M/s. Jacsons Thevara v. Collector of Customs and Central Excise [1992 (61) E.L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not observed unless the non-observance of the condition was sanctioned by the proper officer;" and that the same gives a clue to the authority who can take action for violation of the condition of a licence. I do not accept this plea. Those words only indicate that if the competent authority approves of a modification of the conditions of the licence, then the same cannot be made a ground for confiscation. On the other hand I am impressed by the arguments of Mr. C.A. Sundaram that the investigation may disclose a misdescription at the time of export, warranting action under Section 113(i) of the Customs Act. Such an action has nothing to do with the conditions of licence. It is only the investigation by the independent agency like the second respondent which will disclose whether there is violation of the conditions of licence or whether there was escaped duty on account of the violation of the Notification 159/90. In other words, it is only the completion of the investigation which will disclose the necessity for and the nature of action to be taken and it is at this stage only the question of jurisdiction will arise. Further, I am relieved of the necessity to go into more detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpressed both by the learned single Judge and by us are meant only for the purpose of disposing of the interim applications and it is needless to state that they shall not be counted for the purpose of deciding the writ petitions at the final hearing on merits." Therefore, it is clear that the Division Bench had only expressed a prima facie and had not decided the matter conclusively. On the other hand the judgment of the Karnataka High Court is a final adjudication and laying down a precise ratio which I am inclined to follow. 14. The only argument of Mr. Thiagarajan for the petitioner is that against the judgment of the Karnataka High Court Special Leave Petitions have been filed and the proceedings of the Directorate of Revenue Intelligence had been stayed. In fact, it is only on the basis of the interim order of the apex court that I had admitted these two writ petitions and granted an interim order. But I am of the opinion that when the writ petitions are being disposed of finally I cannot adopt an interim order of the apex court as constituting the ratio of the judgment of the apex court. On the other hand, the considered judgment of the Karnataka High Court forms the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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