TMI Blog2007 (1) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... cution stage itself. Proceedings have also been initiated under Section 7 of the COFEPOSA Act before the Additional Chief Metropolitan Magistrate. In the said proceedings, petitioner had initially been granted interim protection for the purpose of presenting himself before the Trial Court. The Commissioner of Central Excise (Adjudication) vide order dated 31-5-2006, has imposed a penalty to the tune of Rs. 50 lacs and proceedings under Section 80/81 of Cr.PC were initiated for the petitioner being declared a Proclaimed Offender. 2. Petitioner's case is that primarily, the detention order is passed for a wrong purpose inasmuch as the acts alleged against the detenu do not constitute a valid ground of detention under the COFEPOSA Act. The belated passing of the detention order, it is alleged, further demonstrates that the purpose is not preventive detention but punitive. Petitioner also assails the delay in passing of the detention order inasmuch as the premises of the petitioner were raided on 15-10-2003 and the order of detention was passed on 7-10-2004. The transactions in question are of the year 1998 and thereafter. 3. Petitioner had moved an application bearing Crl.M.No. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d become recoverable from the exporter only if the declared price of the goods in not received in India. In the instant case, the same is not in question. Accordingly, he urged, it would be wholly irrelevant for purpose of a claim of drawback whether the goods had been exported to Moscow directly or had been sent through Finland. Reliance was also placed by the counsel on Jute Investment Company v. S.K. Srivastava reported at 77 Calcutta Weekly Notes page 501 to urge that destination was not a material particular and hence, the alleged wrong declaration, if any, would be of no consequence. Petitioner had initially also attempted to urge that goods which have already left India, would not be export goods within the ambit of Section 113 of Customs Act, 1962. However, in view of the subsequent Full Bench decision of the Calcutta High Court in M/s. Euresian Equipments and Chemicals Ltd. and Ors. v. The Collector of Customs and Ors. reported at 1980 (6) E.L.T. 38 (Cal.) = AIR 1980 Calcutta 188, this plea was not pressed. 5. Elaborating his submissions, Mr. Jethmalani submitted that goods were sent to Helsinki, Finland since Moscow was land-locked and had no port. The goods were trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods had reached Moscow and upon the alleged failure to discharge the same, cannot invoke the stringent preventive detention law. 6. Comprehensive affidavits have been filed by the petitioner as well as respondents duly supported with various documents. These inter alia relate to shipment of goods, transportation, their ultimate destination, declarations in the shipping bills and the bill of lading etc. Petitioner does not dispute that the various consignments have been shipped to Finland (Helsinki) but that it was on account of Moscow being a land-locked city and Helsinki in Finland being a convenient port. Further, the plea that the goods reached Moscow finally, is sought to be disputed by the respondents. It is neither necessary nor possible to go into these disputed questions of fact in this writ petition. 7. Let us briefly notice the case of the respondents as is sought to be made out on the basis of the submissions and written additional submissions as filed. Referring to the preamble of the COFEPOSA Act being one to provide for preventive detention in certain cases for the purposes of conservation and augmentation of foreign exchange and prevention of smuggling ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anipulated by petitioner's brother. The money so sent was laundered and received back through LCs masquerading as export proceedings of the goods claimed to have been exported to Russia to claim duty drawback DEPB while had the exports been made to any third country, the same would have earned the benefit of drawback, no doubt, but additionally, India would have also got foreign exchange. It is respondent's claim that by mis-declaring the country of destination as Russia, the buyers in Russia, who were managed/manipulated by the brother of the petitioner, also got the LCs at discounted prices in auctions by the Russian Government for importing goods from India under Repayment of State Credit Scheme. Respondents contend that there is sufficient evidence on record to demonstrate that the goods did not reach Russian Federation. It is contended that the drawback DEPB became unavailable firstly because of non-arrival of goods in Russia, a crucial and critical condition for eligibility for export benefit under the scheme and secondly, the proceeds received clearly became unrelatable to the exported goods and were not in the currency in which they should have been received. Respondents cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act. Under Section 113(i) of the Customs Act, any dutiable or prohibited good or goods entered for exportation under claim for drawback which do not correspond in any material particular with the entry made under the Act or the provisions of this Act or in case of baggage with the declaration made under Section 77, shall be liable for confiscation. 'Entry' in relation to goods is defined under sub-clause (16) of Section 2 of Customs Act as entry made in the bill of entry, shipping bill or bill of export and includes in the case of goods imported or to be exported by post the entry referred to in Section 82 or entry made under regulations made under Section 84. The exporter is required by virtue of Section 50(2) of Customs Act, while presenting a shipping bill or a bill of export to subscribe to a declaration as to the truth of its content. It is the respondents' case that the petitioner made the wrong declaration in the shipping bills and the bill of lading, which amounted to mis-declaration in respect of 'material particular' and has accordingly rendered the goods liable for confiscation under Section 113(i) of the Customs Act. Respondents contend that the petitioner subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para 4 of the said scheme the goods could be exported only to Russia. Para 6 of the scheme is reproduced for facility of reference: "Funds from repayment of state credits are to be utilized for export of goods to Russian Federation only. No third country exports are permitted to be financed out of funds from such repayments of state credits." 12. The benefit under the scheme is available only if the goods are exported to Russia and not to any third country. Mr. Malhotra contended that if there was any violation of the provisions of the said scheme, the Indian exporter becomes ineligible not only for availment of any benefits under the said scheme but the export benefits availed of on such exports also become inadmissible/revocable. Therefore, mis-declaration of the port of discharge (destination) and non-arrival of goods in Russian Federation was a major, indeed critical, violation amounting to smuggling rendering goods liable to confiscation under Section 113(f) of the Customs Act. 13. Having heard learned Counsel for the parties and having noted the respective contentions as above and having gone through the pleadings on record as also the record produced, we find merit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, would not be exercised in a case where the proposed detenu successfully evades the service of the order. If in every case the detenu is permitted to challenge and seek the stay of the operation of the order before its execution, the very purpose of the order and the law under which it is made, will be frustrated since the orders are in operation for a limited period. The Court, however, noted that the courts have necessary power in appropriate cases to interfere with the detention order at the pre-execution stage but the scope of interference is very limited. It was held that the courts would interfere at the pre-execution stage with detention orders only after they were satisfied of the existence of the five situations enumerated earlier. In the instant case, it is the petitioner's own contention that he has not allowed the detention order to be served on him. There have been adjudication proceedings where a fine has been imposed. Petitioner has also been declared a Proclaimed Offender and as noted earlier, it cannot be said that the respondents do not have a prima facie case or that the grounds set up by them are wholly irrelevant or extraneous. 16. Coming to the question of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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