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TMI Blog1987 (6) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... two consignments of low carbon mild steel defective CRCA sheets (as declared) shipped from Antwerp ex-s.s. Vanila rot no. 217/85, line no. 61 and 62 covering quantities 246.14 M/T and 196.98 M/T clearances of the said consignments against the following import trade control licences. Line No. 61 Name of the licence holder Nature of licence Licence No. Face value of the licenses & value debited 1. Monali Sea Food Pvt. Ltd., Calcutta REPlicence endorsed with para. 138 13(ii) of A.M. 1985 Policy P/L 3073640 dt. 13-7-1984 FI.3 Rs. 133500 Rs. 66750 2. -do- -do- P/L 3073639 dt. 13-7-1984 FI.3 Rs. 20800 Rs. 10400 3. Pronier Enterprises 32/46 Chandi Ghosh Road, Calcutta-40 REPlicence endorsed with para. 13 of A,M, 1985 A.M. I Policy P/L 3075910 dt. 16-1-1985 A-16(ii) Rs. 165000 Rs. 33000 4. -do- -do- P/L 3075907 dt. 16-1-1985 A-16(ii)B Rs. 165000 Rs. 33000 5. Jalan Commercial Agency, 514, Rabi-ndra Sarani, Calcutta-5 REP licence endorsed with para. 138 of A.M. 1985 Policy P/L3075907 dt. 16-1-1985 A-16(tl)B Rs. 163000 Rs. 32600 6. -do- -do- P/L 3075809 dt.11-2-1985 A-16(1I)B Rs. 200000 Rs. 40000 7. -do- -do- P/L3075786 Dt.16- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e normally used for manufacture of Iron safes, trunks, buckets and such other articles and not for food processing. Hence this appears to be a case of misuse of facilities granted under para 138 of the Import Policy. Hence it appears that licence Nos. P/L 3073640, dated 13-7-1985 and P/L 3073639, dated 13-7-1984 for clearance of goods valued at Rs. 77,150 are not valid for the import of the goods in question. 4. Similarly, in respect of line No. 61 licence No. P/L 3075910, dated 6-1-1985 issued to M/s. Pronier Enterprises, Calcutta and No. P/L 375786, dated 16-1-1985 issued to M/s. Jalan Commercial Agency, Calcutta are REP licences issued against exports of products falling under A 16(i) which are non-ferrous semis and manufactures, namely, lead semis, extrusions and solder wires, CRCA sheets are not required. Again licence Nos. P/L 3075907, dated 16-1-1985 issued to M/s. Pronier Enterprises, Calcutta, P/L 3075788, dated 16-1-1985 and P/L 3075809, dated 11-2-1985 issued to M/s. Jalan Commercial Agency related to the export products A 16(ii)(b) of Appendix 17 (non-ferrous semis and manufactures, namely semis/extrusions of copper alloy). For the manufacture of the said products CRCA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examination of the goods. (c) The value declared for the goods is F.F. 1400 per MT. F.O.B. Antwerp which works out to Rs. 1850 per MT approx. and CIF Rs. 2433. (d) Imports of CRCA defective sheets have been noticed at Calcutta at prices higher than Rs. 2433 per MT. Hence on the face of it the goods appear to be undervalued. The extent of undervaluation can be ascertained only on examination of the goods. 10. In the circumstances M/s. S.A. International, P-3, New CIT Road, Calcutta-73 is called upon to furnish the following details: (a) Their relationship with M/s. NTS-A. P. Landowski Samis, Paris either directly or indirectly. (b) The name and address the intending agents in India. (c) The details of local commission paid, if any. (d) The name of the actual suppliers of the goods. (e) The details of insurance policy taken by the shippers. (f) Country of origin certificate. (g) Mills test certificate (h) Copies of the detailed correspondence with the suppliers. Copies of the contracts or agreements with the licence holders. 11. M/s. S.A. International is also called upon to show cause why the licences should not be considered as unauthorised rendering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im on or before 15th May, 1985. It was also specifically indicated in the said show cause notice that if the petitioner wished to be heard in person before the case was adjudicated, they may state so in the written representation. If no reply is received, the case may be adjudicated ex parte. 6. That during the course of hearing, Mr. B.N. Sen, the Senior Advocate assisted by Shri A. K. Ganguly, the learned Advocate, appearing for the petitioner placed the original show cause notice Nos. and date of the show cause notice was left blank. Subsequently, they were filled up and indicated on the top of the show cause notice as 8-5-1985, whereas the copy of the show cause notice, which was sent to M/s. J.C. Bose & Sons was dated 9-5-1985. There was a clear variance between the date appearing in the show cause notice addressed to the petitioner and the show cause notice sent to M/s. J.C Bose & Sons inasmuch as show cause notice was taken on 9-5-1985 whereas the show cause notice sent to the petitioner was dated 8-5-1985. 7. From a reference to the show cause notice, copy whereof was produced before the Hon'ble Court, it would appear that the Collector of Customs sent the same after 15th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also to the Import and Export Act, 1947 and Import (Control) Order, 1955 (as amended)." 11. Mr. Sen claimed and asserted that while issuing the show cause notice, the respondents consciously and deliberately did not take into consideration while calculating the F.O.B. value of the following 3 licences, viz., (1) P/L 3038683/C, ) P/L 3075910/C and (3) P/L 3075788/C. In that event, no reasonable person should form opinion even prima facie that the declared F.O.B. value of the goods was not covered by the licences. It was also as sorted by him that on the bill of entry it was specifically mentioned that the imported goods would be handed over to the actual users only. All the letters of authority specified the nature of goods, description of the goods required to be imported on behalf of the licence holders by the letters of authority-holder. The copies of the original letters of authority were submitted to the customs authorities as contained in Annexure "A" to the supplementary affidavit. The petitioner also effectively controverted that the allegations made in para 2 of the show cause notice were false and without any basis. The petitioner also raised specific grievances to the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnexure "D" Pioneer Enterprises and Jalan Commercial Agency do not manufacture only the items of goods mentioned in the show cause notice, the said exporters also manufacture other items as would be apparent from the respective certificates issued by the Director of Industries, it was totally incorrect that there had been any misuse of paragraph 138 of the relevant Import Policy on the other hand, there has been deliberate misreading of paragraph 138 of the Import Policy on the part of the authority who issued the impugned show cause notice. The names of exporters have been wrongly mentioned in paragraph 4 and 5 of the show cause notice The correct names should be "Pioneer Enterprises" and not "Premier Enterprises" and the correct name should be "Metal & Allow Industries" and not "Metal & Alloys Industries Ltd.". This revealed complete non-application of mind on the part of the issuing authority. The petitioner further asserted that there has been no ground for even assuming for any reasonable person that there has been any unauthorised importation or that there is any ground for confiscation of the imported goods. As such, Section 111 (d) of the said Act, 1962 and Section 3(2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. 20. Para 9, according to Mr Sen, did disclose that there was no material at the time of issuing the show cause notice. On a plain reading of the said paragraph 9 of the show cause notice, it. would appear that at least on 8th May, 1985, there was "understanding" of certain evidences, which were yet to be effective examined, ascertained and objectively looked into by the concerned adjudicatory authority, was the foundation of the show cause notice. The word "understanding" according to the petitioner, cannot be the foundation of the show cause notice. Mr Sen pinpointed that without ascertainment of the actual nature of the goods, and examination, the show cause notice was issued in unseemly haste and in over-zealous manner Mr. Sen submitted that the customs authorities were not in possession at the time of the issue of the show cause notice of any material which could be relied on as evidence nor was there any primary and basic fact. 21. Mr. Sen submitted that the customs authorities were not in possession at the time of issue of the show cause notice of any material which could be relied on as evidence as is there any primary and basic fact forming the basis of the show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties specified only three licences which were used at the time of opening L/C but did not go into the details that the L/C was enhanced. While enhancing the L/C the licences were produced before the customs-authorities and the same licences were given to the bank at the time of enhancing the L/C. The bank certificate was also produced. 27. It was further argued by Mr. Sen that the plea of the respondents that imported goods are not required for the "Export" product is wholly without any substance inasmuch as it is not the only condition of the licence. The licence was issued in terms of para 138(1) of Import Trade Control Policy, 1984-85, which reads thus :- "138(1). REP licences issued to manufacturer-exporters, against their exports of select products manufactured by them will be valid, within their overall value, for import of Items of raw materials, components, consumables, spares and packing materials, as are related to the products exported or manufactured in the same factory as the one from which the goods were exported or some other factory of the same manufacturer, subject to 'actual user' condition. This special facility will be subject to the conditions laid down hereu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) v. Bairstow reported in 1956 Appeal Cases page 4. Relying on the said decision, Mr. Justice P.B. Mukherjee (as he then was) analysed the position as follows:- "But the importance of classical observations of Lord Radcliffe lies in the distinction between primary facts and 'inferences' drawn from them and in laying down when the later are questions of law although expressed in three seemingly different expressions in jurisprudence on this point, namely, (i) no evidence to support the determination, (ii) evidence is inconsistent with the determination and (iii) the true and only reasonable conclusion contradicts the determination as to the learned Lord's preference for the third expression as being most appropriate." 32. Observation of Lord Radcliffe and the analysis made by the Hon'ble Mr. Justice P.B. Mukherjee were followed by this Court in a later decision in Golam Mahiuddin v. State of West Bengal AIR 1964 Cal. 506. "All Administrative Tribunals must act in good faith, must have regard to relevant considerations only, must disregard all irrelevant considerations, must not seek to promote purposes alien to the letter or the spirit of legislation that gives it power to it and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y facts. The show cause notice merely on the basis of understanding appearing in para 9 without having the support of primary or basic facts would be open for challenges on the ground that at the stage ascertainment and examination was inconclusive and incomplete. The incorrect data or incomplete investigation cannot and could not constitute the grounds within the meaning of Section 124 of the said Act. 36. The grievance raised is that the notice that has been issued, apart from being uncertain and indeterminate, is founded upon assumption and presumption to such an extent that the petitioner had no reasonable opportunity of defending himself. The notice under Section 124 of the said Act is a statutory notice and the conditions as provided for in the said section must be vigorously, scrupulously and strictly adhered to. If it is necessary to inform a person whose goods are sought to be confiscated or who is sought to be seriously affected or penalised on the grounds upon which it is set in motion, it therefore, follows such ground must be clear and specific so that the person sought to be fastened with notice afforded an effective opportunity of defending himself. Salutory princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notice in my view also violated the concept of justice and fair play inasmuch as the petitioner was precluded from replying to the show cause notice on 15th May, 1985. Respondents ought not to have sent or despatched the same. Reference may be made to the decision of Collector of Central Excise v. Somarmall Purohit 1979 ELT-J 631 (SC) and Charandas Malhotra v. The Collector of Customs AIR 1968 Cal 28. The show cause notice having been founded upon surmise the conjecture and no ground having been effectively disclosed, the interference of this Court under Article 226 of the Constitution is warranted. 39. The contention of Mr. Roychowdhury, although very attractive in appearance, the same lacks in substance inasmuch as the show cause notice could not have been issued at the time when the concerned authorities directed that the investigation should proceed quickly. The show cause notice should also be opened for judicial review for the reasons as elaborately discussed above. Judicial review of the show cause notice suffered from illegality, irrationality and procedural impropriety which in the facts of the case call for Interference by this Court under Article 226 of the Con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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