1. This writ petition is directed against the order in revision passed by Government of India on July 5, 1972 confirming the order of the Central Board of Excise and Customs. The Board upheld the order of the Collector of Customs with regard to the liability of the goods for confiscation but the Board modified the order of the Collector in regard to personal penalty. The Board ordered that the petitioners was liable to pay Rs. 1,000 as penalty. The impugned order is challenged mainly on two grounds :-
1. That there was no mis-statement in regard to the value as petitioner has no knowledge of the value of the goods as determined by the Collector.
2. That the value of the goods was determined by the Collector in contravention of Section 30 of the Sea Customs Act, 1878.
The submission is that the department was wrong in fixing the wholesale price on the basis of sale contracts and the consequent invoices of the foreign manufactures.
2. The petitioner imported art-silk fabrics under import trade control license No. 981149/60/CCI dated 6-1-62. The term of the license was that art-silk fabrics should be re-exported after imposing embroidery and hand-stitching on it. The petitioner was served with the show cause notice under Section 167(37) and Section 167(8) of the Sea Customs Act, 1878 on 24th August, 1965. In the bill of entry the petitioner declared the value of the goods C.I.F. at Rs. 3,067.44. The real value, according to the petitioner, was Rs. 3,090.45. The goods were shipped from Japan. In the course of enquiry under Section 171A of the Act one Shri Kanhaya Lal Nihal Chand Chhatwani proprietor of M/s. India Agencies, Bombay and agent of M/s. Kaysons Corporation of Japan produced the sale notes and invoices pertaining to the sale goods. On this information the Assessing Authority of Customs, special investigation branch came to the conclusion that the real value of the goods was Rs. 18,911. It was alleged in the show cause notice that the petitioner miss-declared the value of the goods and but for the detention there would have been a loss of revenue to the extent of Rs. 15,962.36 P. The show cause notice called upon the petitioner to explain as to why he should not be proceeded against under Section 167(7)(8).
3. In reply to the show cause notice, the petitioner submitted that there was an oral contract between the petitioner and M/s. Eastern Traders of Kuala Lumpur, Malaysia with whom they had business dealings for a long period of time. The petitioner further stated that along with the shipping documents there was a covering invoice from M/s. Eastern Traders, Kuala Lumpur in which the value of the goods was stated to be Pounds 227-10-0 C&F; (Rs. 3,033.32). It was contended that they had no knowledge of the sale contracts and invoices. It was then stated :
'We are completely unaware of the nature of the relationship existing between the four aforesaid firms namely M/s. M. Teramoto & Co. Ltd., Osaka, M/s. Kaysons Corporation of Japan, M/s. Khem Chand & Sons, Singapore and M/s. Eastern Traders, Kuala Lampur, nor have we any knowledge of their business and/or financial dealings with one another.'
4. It may be stated that M/s. Teramoto & Co. were the manufacturers of the art-silk and M/s. Kaysons of Japan were the suppliers. It may be noted from the relative bill of lading the goods were shipped by M/s. Kaysons Corporation of Japan direct to Calcutta and the name of the consignee was shown as M/s. Hot Chand Jawahar Mal. The notified party was shown as M/s. Khem Chand & Sons, Singapore. The bill of lading was enforced by the shippers in favor of M/s. Mercantile Bank, Singapore who endorsed it in favor of M/s. Khem Chand & Sons, Singapore who in turn endorsed it in favor of M/s. Hot Chand Jawahar Mal, the petitioners. The shipping documents did not show that M/s. Eastern Traders, Kuala Lumpur had nay connection with the goods.
5. Section 30 and Section 167(37)(c) read as follows :
'30. If any person refuses to Such person, master or officerreceive or fails to sign, or to shall be liable to a penaltynote the prescribed particulars not exceeding five hundredupon, any boatnote, as required rupees.by Section 76, or if any masteror officer of a vessel receivingthe same fails to deliver itwhen required so to do by anyofficer of Customs authorisedto make such requisition,37. If it be found, when any Such packages, together withgoods are entered at, or the whole of the goodsbrought to be passed through contained therein, shall bea custom house, either for liable to confiscation, andimportation or exportation, every person concerned in anythat. such offence shall be liableto be penalty not exceeding* * * * one thousand rupees.'(c) the contents of suchpackages have been mis-statedin regard to sort, quality,quantity or value.
The counsel for the petitioner contends that for attracting penalty under Section 167(37)(c) it is necessary that the 'mis-statement' should be made with knowledge. He submits that the petitioner had no knowledge of the transactions between other parties stated above. It is not possible to accept the petitioner's contention. First of all it is very difficult to believe that an international contract can be an oral contract. So also on his own showing the petitioner is having business with Eastern Traders, Kuala Lumpur for over a long period of time. If it is so it is unlikely that he would not know that Eastern Traders were not the manufacturers of the goods and also the fact that the goods were not manufactured in Malaysia. Along with the bill of entry the petitioner had produced an invoice purportedly from M/s. Eastern Traders of Kuala Lumpur. It is stated therein :
'goods to be shipped from Japan per s/s Eastern Muse. It is certified that the above goods are of the Japanese origin.'
This is a clear admission on the part of the petitioner that they had the knowledge that the goods were being supplied by a party in Japan. This fact is stated in the invoice of the Eastern Traders. thereforee, the knowledge of the Japanese party can be directly imputed to Eastern Traders. It can fairly be inferred that the petitioner had the knowledge of the transaction between various parties in question and had also the knowledge of the price of the goods shown in the sale notes and invoices from Messrs M. Teramoto & Co. and Messrs Kaysons Corporation of Japan. I have no hesitation in holding that the statement as regards the value made by the petitioner was a mis-statement.
6. The evidence of Kanhaiya Lal Chhitwani and the said documents produced by him were not challenged before any Authority by the petitioner. He was not called for the cross-examination by the petitioner. I, thereforee, hold that the real value of the goods was Rs. 18,911 as proved by the sale notes No. 1926 and 1927 and the related invoices.
7. The counsel for the petitioner however, contends that the said value is not the real value within the meaning of Section 30. He submits that wholesale price should have been worked out by the department on the market enquiry at Calcutta at the appropriate time in order to find out the price at which the goods of the same kind and quality were sold or were capable of being selling. His argument is that there is no such factual determination by the department. The reliance on sale notes and invoices were extraneous to such determination. From the order of the Collector, the Board, and the Central Government I do not find that the challenge was raised in this form except in reply to the show cause notice. The only contention raised was that the valuation was not 'real' because the invoice issued by M/s. M. Teramoto & Co. showed higher price than invoice No. 139/62 issued by M/s. Kaysons Corporation. The argument is that the department was wrong in relying on the invoice showing higher price. However, it is pointed out in the order of the Collector that two invoices on which the department was relied were signed by the manufacturers and shippers while the other invoice was an unsigned invoice. To my mind this argument has no relevance to the enquiry under Section 167(37). The extent of mis-statement of value is not relevant here. It is an admitted fact that even the invoice which shows lesser price, the price shown is much higher than the one declared by the petitioner. If the argument of the petitioner is that the invoice showing the lower price should have been accepted, the said price can in any case be taken as the real price within the meaning of Section 30. The department need not go into a market enquiry where the importer himself accepts a certain price on the invoice. I, thereforee, find that Section 30 has been complied within the present case.
8. For the reasons stated above, I do not find that any ground is made out for interfering with the order of the Central Government dated July 27, 1972. The writ petition is dismissed with costs. The rule is discharged.