TMI Blog2002 (1) TMI 1315X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner was also a partner in M/s Merchant Exports (India), which was a 100% export oriented unit. Besides that, the petitioner is also a partner of M/s Sanjeev Woollen Mill, which is also engaged in the manufacturing of worsted woollen yarn. It was alleged that the petitioner was an income tax as well as wealth tax assessee since long. It was alleged that in the year 1997, the Government of India introduced an export incentive scheme under the name of Duty Entitlement Passbook Scheme . Under this scheme, the benefits extended to the exporter making an export mainly consisted of duty credit licence granted to him for import of duty free goods. It was alleged that under this scheme, the exporter was under obligation to declare the present market value (hereinafter referred to as PMV) of the goods exported by him, since the benefit under the scheme could not exceed 50% of the PMV. It was alleged that comprehensive guide-lines were issued for determining the PMV in case of manufacturers, exporters as well as merchant exporters. It was further alleged that as per the various circulars issued by the Government, in-built mechanism had been provided with regard to the verification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quently respondent 3 issued another summons dated 4.10.1999 to the petitioner confining to the exports of ball point pens by M/s Merchant Exports on 4.8.1999 and calling upon him to appear before him on 13.10.1999 at Calicut. It was alleged that on the request of the petitioner, he was allowed to appear before the Assistant Director DRI at Bombay. It was alleged that the petitioner again made representation dated 5.10.1999 to respondent No. 3, highlighting that the verification of PMV was vested with the SIB of the Custom Department. It was further alleged various other summons were issued to the petitioner and even though the DRI was not competent to look into the matter, yet the petitioner cooperated with them and the statement of the petitioner was also recorded by the officials of DRI at Bombay on 13.10.1999. It was alleged that even though the petitioner had cooperated with the officials of DRI on each and every summon issued by them, yet the officials of DRI had filed a criminal complaint against the petitioner under Section 174 Indian Penal Code on the allegations that he had not complied with the summons issued by the under Section 108 of the Customs Act on 25.11.1999. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 21.7.2000 has been annexed as Annexure P-33. It has been alleged that the said detention order was illegal and void, on various grounds mentioned in para 33 of the petition. It was alleged that the bill of lading was drawn up for a CIF value of US $ 1,95,000/- (Rs. 84,04,500/-) and that full CIF value in foreign exchange was repatriated by the exporter through their bank and as such there was no loss of any foreign exchange involved in the transaction. It was alleged that DEPB scheme was absolutely independent from the other schemes formulated by the Government and it has in-built mechanism in the form of various circulars. Comprehensive guidelines have been issued for determination/verification of the PMV under the said scheme and it provides for opportunity to the exporter to justify the correctness of the PMV declared by him. The PMV could even be reduced or rejected by adopting the process given therein. It was alleged that no show cause notice, as contemplated under the DEPB scheme, had even been issued to the petitioner and the DRI officials could not investigate into this matter. It was alleged that the provision of Sections 113 and 114 of the Customs Act were not attract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of India v. Alka Subhash Gadia, 1991(1) RCR(Crl.) 677 (SC): 1992 Supp.(1) Supreme Court Cases 496, the Court should not interfere with the detention order at pre-execution stage except the exceptions given therein. The second preliminary objection raised by the learned counsel for the respondents is with regard to the questions regarding the territorial jurisdiction of this court to entertain this writ petition filed by the petitioner. In Alka Subhash Gadia's case (supra) it was held by their Lordships of the Supreme Court that it is not correct to say that the courts have no power to entertain grievances against any detention order prior to its execution. The courts have necessary power and they have used it in proper cases as has been pointed out above, although such cases have been few and the grounds on which the courts have interfered with them at the pre-execution stage are necessarily very limited in scope and number viz. where the courts are prima facie satisfied that:- (i) the impugned order is not passed under the Act under which it is purported to have been passed. (ii) that it is sought to be executed against a wrong person. (iii) that it is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner being the proprietor of M/s Chirag Exports and Imports and partner of M/s Marchants Exports (India) Ltd. It was further submitted that in the grounds of detention it was specifically mentioned that the premises of the petitioner at Ludhiana were searched by the officials of DRI, Amritsar and that it was also alleged in the grounds of detention that the invoice had been issued by M/s Chirag Exports and Imports Ludhiana and that the petitioner had seen the samples at the time of purchase at Ludhiana and that he was maintaining complete accounts of purchase and payment at Ludhiana and that the goods were purchased at Ludhiana and that the scrutiny of various vouchers indicated that the consignment had been purchased from various persons at Ludhiana and Khanna. It was submitted that from all these allegations, it was clear that a substantial part of the cause of action had arisen within the territorial jurisdiction of this court and as such this court has jurisdiction to interfere and decide the present petition. Reliance was placed on the case reported as Mrs. Arvind Shergill v. Union of India, 1999(4) RCR(Criminal) 781. 11. After hearing the counsel for the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntentions of both the sides, it was held that this court had the jurisdiction to entertain the said petition. It was held that mere residence of a person at a particular place perhaps may not furnish a cause of action but if the alleged detenu or his close relations have the apprehension that the order of detention is likely to be served upon him for the purpose of execution, certainly, the court in whose jurisdiction this order is to be executed will have the jurisdiction. In the reported case it was the case of Union of India itself that they had raided the house of the husband of the petitioner at Jalandhar and Chandigarh and under those circumstances it was held that this Court would have the jurisdiction to entertain this petition. Reliance was placed on the law laid down by this Court, in the case reported as D.N. Anand v. Union of India, 1993(2) All India Criminal L.R. 220: 1993(2) RCR(Crl.) 104 (P H). It was a case under the COFEPOSA. Two addresses were given in the order of detention passed by the Government of India, one at Delhi and the other of Ambala and it was held by this Court that this court had the jurisdiction to entertain the writ petition. Reliance was also pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the ink was filled in the narrow hole in the body of the pen and each pen had the marking of Chirag on the body. It was also found that the declaration in the shipping bill contained the details that there were 325 cartons of writing instruments of ball pen 13-inch long plastic. It was also noticed that it was a case of Merchant Exporter and that the goods were purchased from open market. It was also noticed that in the declaration given by the exporter, M/s Merchant Exports (India), Mumbai, it was stated that the present market value of the goods being exported was ₹ 10/- per piece in retail and ₹ 6/- in the bulk quantity and the benefit under Duty Entitlement Passbook Scheme shall not exceed 50% of the present market value. The cash purchase vouchers were in respect of 50,400 pens purchased @ ₹ 6 per piece. It was also noticed from the said document that the invoice was issued by M/s Chirag Imports and Exports, Ludhiana, consigned to self for export to Dubai and the value of the pens were shown as ₹ 6/- per piece, at a total value of ₹ 39.00 lakhs. In the grounds of detention, it was also mentioned that market survey was done about the cost o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be clear that the detention order had been passed keeping in view that the declaration given by the petitioner in respect of the present market value was not correct as he had got higher value of the pens sought to be exported, for the purpose of claiming the benefits under the Duty Entitlement Passbook Scheme. Section 3(1) of the COFEPOSA Act, 1974, reads as under: Power to make orders detaining certain persons - (1) The Central or the State Government or any officer of the Central Government not below the rank of a Joint Secretary to that Government, specially empowered for the purposes of this section by that Government, or any officer of the State Government, not below the rank of a Secretary to that Government, specially empowered for the purposes of this section by that Government, may, if satisfied, with respect to any person (including a foreigner), that, with a view to preventing him from acting in any manner prejudicial to the conservation or augmentation of foreign exchange or with a view to preventing him from:- i) smuggling goods, or ii) abetting the smuggling of goods, or iii) engaging in transporting or concealing or keeping smuggled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the said Act or any other law for the time being in force. In the present case, there is nothing on the record to show that the export of 13-inch long pen was prohibited. Section 2(33) of the Customs Act defines the prohibited goods as the goods which have been prohibited by any law in force. As referred to above, there is nothing on the record to show that the export of 13-inch long ball point pen was prohibited either under the Customs Act or under any law for the time being in force. Thus, any irregularity in the declaration while exporting the above said pens would not bring the present case within the mischief of Section 113(d) of the Customs Act, especially when the export of those pens is not prohibited under any law in force including the Customs Act. If those pens were not liable to be confiscated under Section 113(d) of the Customs Act, the present case would not be covered under the provisions of section 2(39) of the Customs Act as the act of the petitioner would not amount to smuggling inasmuch as (under) Section 2(39) of the Customs Act, smuggling has been defined to mean any act or omission, which would render the goods liable to confiscation under Section 111 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indulged in the smuggling of goods. 21. As referred to above, in the present case, the allegations against the petitioner are that he had given higher present market value of the pens, which were exported and in support thereof, he had manipulated certain documents and had furnished false declaration. If the petitioner had given higher present market value and it was ultimately found by the concerned authorities that the petitioner had given higher present market value, while exporting the pens, the petitioner might not be entitled to the benefit under the Duty Entitlement Passbook Scheme. That matter has to be gone into by the authorities under the said scheme. However, for claiming higher present market value of the pens, it could not be said that the petitioner had indulged in any activity which is prejudicial to the conservation or augmentation of foreign exchange nor could it be said that he had indulged in the smuggling of goods, to bring the case of the petitioner within the purview of Section 3(1) of COFEPOSA Act. 22. From a persual of the above, it would be clear that the order of detention has been passed on the grounds which are non-existent. Even if all the allega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the petitioner falls in any of those conditions, the facts of the case have to be considered. Thus, it was held that the preliminary objection, regarding the pre-execution stage, would be kept in view while discussing the merits of the case. 25. In the present case, as referred to above, the order of detention was passed against the petitioner, contrary to the provisions of COFEPOSA Act, inasmuch as even if the allegations, made in the grounds of detention, are taken as correct, the case of the petitioner would not fall under in the provisions of COFEPOSA Act. The being so the order of detention could not have been passed under COFEPOSA Act. Furthermore, under Section 3 of COFEPOSA Act, the order of detention could be passed only for the purposes of preventing a person from acting in any manner prejudicial to the conservation or augmentation of foreign exchange or with a view to preventing him from smuggling of goods, etc. In the present case, as referred to above, there is nothing on the ground to show that the petitioner had indulged in any of the above said activities. That being so, it can certainly be said that the order of detention has been passed for a wrong purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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