TMI Blog1998 (2) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... nternational, Moscow. Rattan Bagaria negotiated with Alok Gupta, Director of M/s. Sujata Data Products Ltd. on 8-3-1995. After the final negotiations, the purchase order dated 24-3-1995 was received and back to back agreement dated 24-3-1995 was entered into on the basis of which 4,000 pieces of Floppy Disc. drives of 100% tested and certified, were to be supplied by M/s. Sujata Data Products at the price of Rs. 2,300/- per piece C and E Moscow. The benefit of duty draw back was to accrue to M/s. Sujata Data Products. Apart from the difference of the export price of US dollars 83 per piece and purchase price of Rs. 2,300/- per piece, M/s. Ratan Exports and Industries Ltd. was not entitled to any payment. 3.Respondent No. 3 issued a show cause notice and it was alleged that on 31-3-1995, M/s. Ratan Exports Industries Ltd., New Delhi, filed a shipping Bill No. 15665, dated 31-3-1995 under claim for duty draw back through their CHA namely M/s. Standard Container Services, Madras (Chennai), i.e. their clearing agent. The goods as per declaration were 1,000 pieces of 5-1/4 Floppy Disc Drives valued at Rs. 1,02,42,113 (FOB). The goods were declared to have been manufactured by M/s. Suj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ja Reddy all of M/s. SDP in their statements all dated 15-4-1995 maintained that they have assembled all the 4000 Nos. of Floppy Disc Drives with all its parts, tested, packed and despatched. Shri A. Suryanarayana Murthy and Shri Raja Reddy allegedly agreed that the samples drawn from the subject consignment in the presence of the Custom House Agent are from their factory and that they cannot be tested and are only "Junk". (v) That the claim of M/s. SDP that they have completed production/manufacture, assembly, quality control, tests/checks of 4000 Nos. of complete Floppy Disc Drives within a period of 12 days (18-3-1995 to 30-3-1995) appears to incorrect and untenable. (vi) The report of Assistant Collector, Hyderabad vide letter dated 28-4-1995 allegedly showed that the Hyderabad unit of M/s. SDP had no material either in stores or in the production floor (shop floor) and further there was no evidence that they had purchased the parts required locally. (vii) It is allegedly clear that production commenced only on 18-3-1995, that only 12 days time was available, only casual workers attended to the job and the Floppy Disc Drives were incomplete. (viii) It was alleged that S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t goods. (xii) M/s. SDP in collusion with M/s. Ratan Exports Industries Ltd. had claimed a duty drawback of 22% on the FOB value for the subject shipment, this works out Rs. 22,53,264/-. Had the consignment been allowed for the export in the normal course M/s. SDP would have recovered a duty drawback amount of Rs. 22,53,264/-. (xiii) It was alleged that Shri Ratan Bagaria, Managing Director, M/s. Ratan Exports Industries Ltd., New Delhi and Shri Alok P. Gupta, M/s. SDP Ltd. were the main brains, behind the attempted export of incomplete Floppy Disc Drives covered by the subject Shipping Bill No. 15665, dated 31-3-1995." 4.Reply to the show cause notice was filed and it was stated that the husband of the petitioner Ratan Bagaria had acted in an upright and bona fide manner. He categorically stated that he was not the manufacturer. An order was placed with M/s. Sujata Data Products for the supply of Floppy Disc Drives and he had at no stage conveyed to M/s. Sujata Data Products to supply only the covers and not the floppy discs. It was further made clear that there was no evidence to show that Ratan Bagaria had conspired with M/s. Sujata Data Products to manufacture and exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has arisen in the territorial jurisdiction of this High Court. The cause of action, if any, arose either at Chennai or at New Delhi, i.e., where the goods were confiscated and prosecution u/s 135 of the Custom Act was launched against Ratan Bagaria or from where the orders were issued. In support of the preliminary objection, reliance was placed upon The Additional Secretary to the Government of India and others v. Smt. Alka Subhash Gadia and Another, 1991 (53) E.L.T. 481 (S.C.) - JT 1991 (1) SC 549, and it was stated that the detention order was not liable to be challenged at pre-exection stage except on certain exceptional and limited grounds as stated in Para-19 of the said judgment. Moreover, the High Court has a limited jurisdiction to examine the matter whether the formalities enjoined by Article 22(5) of the Constitution of India have been complied with or not. 6.On merits, the stand of the Government is that M/s. Ratan Exports and Industries Ltd. filed a Shipping Bill for the export of 4,000 pieces of Floppy Disc Drives to Russia with a declared FOB value of Rs. 1,02,42,113/-. The goods were supplied by M/s. Sujata Data Products Ltd., Hyderabad. As per the agreement bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s detaining certain persons. - (1) The Central Government 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 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 goods, or (iv) dealing in smuggled goods otherwise than by engaging in transporting or concealing or keeping smuggled goods, or (v) harbouring persons engaged in smuggling goods or in abetting the smuggling of goods, It is necessary so to do, make an order directing that such person be detained : Provided that no order of detention shall be made on any of the grounds specified in this sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary to any prohibition imposed by or under this Act or any other law for the time being in force shall be liable to confiscation." Prohibited goods are again defined in Section 2(33) of the Custom Act and according to it, it means any goods the import or export of which is subject to "any prohibition under this act or any other law for the time being in force but it does not include any such goods in respect of which the condition subject to which the goods are permitted to be imported or exported have been complied with." The export of empty shells of floppy discs is not prohibited goods. In these circumstances, it can be safely said that at the most, the husband of the petitioner Ratan Bagaria or his supplier had tried to dupe the custom authorities by submitting a wrong declaration or by submitting the misdescription of the goods to be exported but it is difficult to hold, prima facie, that the attempt was made for the smuggling of the goods, within the meaning of Section 3(i) or (ii) of the COFEPOSA Act. 12.Now, it is to be seen whether the impugned order, Annexure P-5, can be sustained in the eyes of law or not. 13.After incorporating the previous history of the case, it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be sustained in the eyes of law. On the contrary, the learned standing counsel for U.O.I. Mr. D.D. Sharma, has referred to Kumarunnisa v. Union of India and another, 1991 (2) Recent CR 401, Rajendra Kumar Natvarlal Shah v. State of Gujarat and others, 1988 Cri. LJ 1775, Smt. Hemlata Kantilal Shah v. State of Maharashtra and another, AIR 1982 SC 8, Abdul Sattar Ibrahim Manik v. Union of India and others 1992 SCC (Cri.) 1 and Additional Secretary to Government of India and others v. Smt. Alka Subhash Gadia and another, 1992 SCC (Cri.) 301, and submitted that the petitioner has no locus standi to challenge the detention order at pre-execution stage; that the detention order can be passed on a solitary incident; that the possibility of prosecution is no bar to the detention; that the delay in passing the detention order does not necessarily load to an inference that subjective satisfaction has not been complied with by the detaining authority before passing the impugned order. 16.Before I proceed further into the matter, I may say that the case law which has been relied upon by Mr. Sharma is off the point. 17.Now, I concentrate on the issue whether the alleged act attrib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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