TMI Blog1981 (9) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... er. In other words, the goods imported under the licences could be sold by the petitioners with the permission of the Textile Commissioner. By an agreement dated 7-4-1965 the petitioners entered into an agreement with Messrs Dhanraj Mills under which they sold the goods to be imported by them under these four licences viz. staple fibre of non-viscose origin to Messrs Dhanraj Mills subject to the permission of the Textile Commissioner at a premium of 128% and on the terms and conditions mentioned in the agreement. On the same date by their letter dated 7-4-1965 addressed to the Textile Commissioner the petitioners asked for permission of the Textile Commissioner to sell the goods to be imported by them under these licences to Dhanraj Mills. Permission to sell the goods was granted by the Textile Commissioner to the petitioners by his letter dated 26-5-1965. In the meanwhile the petitioners addressed a letter dated 5-5-1965 to the Joint Chief Controller of Imports and Exports requesting him to issue a letter of authority in favour of Dhanraj Mills in respect of the import of goods covered by the said licences in view of the fact that they had sold the goods to Dhanraj Mills with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letters of credit were paid for by Messrs Madhusudan Gordhandas, who retired the documents from the bank and attempted to clear the goods from the Customs. The petitioners in the meanwhile heard rumours in the market that such an import was being made by Messrs Madhusudan Gordhandas. On 20th June 1965 they addressed a letter to Dhanraj Mills pointing out that they had only agreed to sell staple fibre of non-viscose origin and that Dhanraj Mills had no authority to import any other item. They asked Dhanraj Mills to confirm that no other item was being imported. There was no reply to this letter till 14th July 1965 when Dhanraj Mills sent an equivocal reply. The petitioners therefore addressed letters to various authorities in order to bring to their notice the fraud being played by Messrs Madhusudan Gordhandas. Thus they wrote a letter dated 16-7-1965 to the Bank of Tokyo Ltd.; a letter dated 16-7-1965 to the shippers, The Great Eastern Shipping Co. Ltd.; a letter dated 17-7-1965 to the Textile Commissioner setting out in detail the fraud which was committed; a copy of which was also sent to the Collector of Customs and another copy was sent to the Joint Chief Controller of Imports ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n agreement -of sale. The Collector also came to the conclusion that the Letter of Credit was opened and the goods were imported without the knowledge of the petitioners. In the course of this inquiry Messrs Madhusudan Gordhandas Co. admitted that they alone had taken all steps to get the licences amended as also to import the goods behind the back of the petitioners and without their knowledge or consent. The Collector, however, in spite of these findings of fact came to the conclusion that the petitioners were liable to pay a penalty of Rs. 750/- u/s. 112 of the Customs Act, 1962. He also confiscated the goods under the provisions of Section 111(d) of the Customs Act, 1962. 4. The petitioners being aggrieved by the order of the Collector of Customs went in appeal before the Central Board of Excise and Customs. The petitioners made their submissions in the Memorandum of Appeal but did not ask for a personal hearing. By its order dated 12-12-1968 the Central Board of Excise and Customs dismissed the appeal of the petitioners. It seems that a number of similar matters of other Mills were also before the Central Board of Excise and Customs, because from the order of the Central B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich were arrived at on the charges which had been levelled, against the petitioners. He held that the conclusions arrived at by all the three authorities could not possible have been arrived at on the basis of the evidence on record. He, therefore, made the Rule absolute, quashed the order of penalty and directed the 4th respondent to refund to the petitioners the amount of penalty levied under the orders which were quashed. 6. In our view, the judgment of the learned Single Judge cannot be assailed in any manner. Mr. Sethna, learned counsel for the appellants namely the Collector of Customs, the Central Board of Excise and Customs and the Secretary to the Government of India, Ministry of Finance, submitted that in essence the charges which had been levelled against the petitioners were twofold. According to him, the first charge levelled against the petitioners was that they had by their own act or omission enabled Messrs Madhusudan Gordhandas Co. to import the goods in question. The second charge, according to him, was that the goods which were imported were not covered by the licences. On both these counts, he submitted, the petitioners must be held liable to penalty u/s. 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioners and Dhanraj Mills was for the sale of licences and not for the sale of goods to be imported under the licences. Admittedly no such charge was framed in the present inquiry against the petitioners and Mr. Sethna has conceded that such a charge would be beyond the scope of inquiry under the Customs Act, 1962. It is not therefore necessary to examine whether the sale in favour of Dhanraj Mills by the petitioners amounted to a sale of licences or not. What we have to consider is whether the petitioners can, in any manner, be said to have done any act or omission in relation to the import of synthetic yarn which has rendered these goods liable to confiscation. The petitioners had sold to Dhanraj Mills not synthetic yarn but staple fibre of non-viscose origin. This sale was effected with the permission of the Textile Commissioner. Thereafter they had handed over the licences to Messrs Dhanraj Mills on receiving payment under the contract of sale. Thereafter the petitioners have not done or omitted to do anything either to get the licences amended or to import synthetic yarn. The Collector of Customs has given a finding that Messrs Madhusudan Gordhandas c Co. were acting on their o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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