TaxTMI 
TaxTMI 
1976 (3) TMI 59
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.... to certain place specified in the notification including Italy unless certain conditions were fulfilled. The exporter was, therefore, required to comply with the requirement of the said provision of law and file a declaration in the prescribed form. The relevant prescribed form in the Foreign Exchange Regulation Rules, 1952 - hereinafter referred to as the Rules - framed under Section 27 of the Act of 1947 was Form G.R. 1. The Invoice and G.R. 1 Form were drawn up by the appellant on rupee terms in accordance with the contract dated 1-3-1971 which it claimed to have had with M/s. Ferolektro, Sarajavo, Yugoslavia. The Customs Authority found that the goods were attempted to be exported to Italy while payment according to the form, was to be received in rupees. So the appellant was asked to explain the discrepancy in the declaration. A request was made on behalf of the appellant to amend the Invoice and CRI showing payment in Sterling. It was not allowed to do so. On April 20, 1971 the premises of the appellant firm and the house of its owner were simultaneously searched and certain documents including some letters exchanged between the appellant and some foreign firms of Italy were....
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....of the High Court took the view that there was no violation of Section 12(1) of the Foreign Exchange Regulation Act and quashed the order of the Additional Collector. 4.The Customs Authority took the matter in appeal before the High Court. A Bench of the High Court has allowed the appeal and upheld the order of the Additional Collector. Hence, this appeal was filed after obtaining special leave of this Court. 5.Section 23A of the Foreign Exchange Regulation Act provides, inter alia, that the restrictions imposed by or under sub-section (1) of Section 12 shall be deemed to have been imposed under Section 11 of the Customs Act and all the provisions of that Act shall have the effect accordingly. Section 11 of the Customs Act empowers the Central Government to prohibit either absolutely or subject to such conditions as may be specified in a notification the import or export of goods of any specified description. Section 113 says : "The following export goods shall be liable to confiscation - ……. ……. ……. ……. ……. ……. ……. ……. ……. ……. ……. ……. (d) any goods attempted to be exported or brought within the limits of any customs area for the....
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....re is one true construction of Section 12(1). But I should, not be taken to be assenting to this proposition in so far as it is applicable to an enactment like the Exchange Act, for no subject has a right to sabotage the national eco-nomy." Section 12 (1) was. thereafter, amended by Act 40 of 1969. It then read as follows : "The Central Government may, by notification in the Official Gazette, prohibit the taking or sending out by land, sea or air (hereafter in this section referred to as export) of all goods or any goods or class of goods specified in the notification from India directly or indirectly to any place as specified unless the exporter furnishes to the prescribed authority a declaration in the prescribed form supported by such evidence as may be prescribed or so specified and true in all material particulars which, among others, shall include the amount representing - (i) the full export value of the goods; or (ii) if the full export value of goods is not ascertainable at time of export, the value which exporter, having regard to the prevailing market conditions, expects to rece....
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.... well be, he submitted, that it violated certain provisions of the Customs Act or the Foreign Exchange Regulation Act. But surely the material particulars furnished by the appellant in its declaration not being untrue in any respect, there was no infraction of Section 12(1) of the Foreign Exchange Regulation Act. The argument as presented had substance and force but did not merit acceptance on close scrutiny. 8.The declaration of the buyer's name even if wrong in the shipping bill and invoice did not attract the provisions of Section 12(1) of the Foreign Exchange Regulation Act. In the form prescribed under Rule 3 of the Rules (G.R. 1 being one such form) the buyer's name was not to be inserted. It was not given in the declaration furnished by the appellant in that form. But the finding of the Additional Collector is that the destination of the goods was Trieste in Italy and in the declaration furnished in form G.R. 1 the appellant had stated that the payment was to be received in India in Indian rupees and this statement was untrue as being against the prescribed manner. 9.It is to be noticed that under Section 12(1) as it stood prior to the amendment by Act 40 of 1969 the decla....
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....e Italy occurs in Group A -"Convertible Account Countries." In that case the approved methods of payment are : Currency of any country in this sub-group. Sterling from an 'External Account', as defined under the U.K. Exchange Control Regulations. Rupees from the account of a bank in any country in the Convertible Account group." Yogoslavia in the Second Schedule finds place in Group B "Bilateral Account countries" where the approved method of payment is "Rupees from the account of a bank in the country of import." 11.In the present case the absence of affirmation had its own significance. It was difficult, almost impossible, for the appellant to affirm that the full export value of the goods was to be paid in one of the three modes prescribed in the Second Schedule to the Rules for the export of the goods to Italy. We are, therefore, of the opinion that although the statement in the declaration that the value of the goods mentioned in column 4 at Rupees 63,301.50 was to be received in India in Indian rupees for the export of goods to Italy was not untrue, the affirmation, if made, would have been either false or contrary to the requirement of the law. If in the affirmation the....