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The Union of India (Uoi) Represented by the Department of Revenue and Banking (Revenue Wing), Vs. F.V. Albin, Managing Partner and Malayil Industrial and Commercial Enterprises - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtKerala High Court
Decided On
Case NumberWrit Appeal No. 152 of 1979
Judge
Reported in1980CENCUS142D
AppellantThe Union of India (Uoi) Represented by the Department of Revenue and Banking (Revenue Wing), ;The C
RespondentF.V. Albin, Managing Partner and Malayil Industrial and Commercial Enterprises
DispositionAppeal dismissed
Excerpt:
.....for export sustained for not exercising the power strictly in accordance with the circular. - - 20,000/-was imposed under section 114. an appeal against the order to the central board of excise and customs, proved unsuccessful but the penalty was reduced from rs. 3.3 if any consignment on this examination shows defects like softening of the material, off-odour, deterioration etc. in this region where the export of certain goods covered by a certificate of export-worthiness is sought to be penalised and the goods themselves are sought to be confiscated, we should be satisfied that the strict requirements for exercise of the power have been satisfied or complied with. we are not satisfied that there was a detailed examination of the consignment as required by clause 3.3 of ext. as we..........read thus:113. confiscation of goods attempted to be improperly exported, etc.:the following export goods shall be liable to confiscation:xx xx xx(d) any goods attempted to be exported or brought within the limits of any customs area for the purpose of being exported, contrary to any prohibition imposed by or under this act or any other law for the time being in force;xx xx xx(i) any duitable or prohibited goods which do not correspond in any material particular with the entry made under this act or in the case of baggage with the declaration made under section 77 in respect thereof;xx xx xxa consignment of frozen shrimps for export arrived at the cochin wharf. the same was examined by the officials of the inspection agency. the authorities suspected that the shrimps were not of.....
Judgment:

V.P. Gopalan Nambiyar, C.J.

1. We have listened to the strenuous arguments of counsel for the appellants on behalf of the Customs Authorities and the Union of India who have filed this appeal. The question raised is the power to order confiscation under Section 113(d) of the Customs Act. That provision and Section 113(i) read thus:

113. Confiscation of goods attempted to be improperly exported, etc.:

The following export goods shall be liable to confiscation:

XX XX XX(d) any goods attempted to be exported or brought within the limits of any customs area for the purpose of being exported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force;

XX XX XX(i) any duitable or prohibited goods which do not correspond in any material particular with the entry made under this Act or in the case of baggage with the declaration made under Section 77 in respect thereof;

xx xx xx

A consignment of frozen shrimps for export arrived at the Cochin Wharf. The same was examined by the officials of the Inspection Agency. The authorities suspected that the shrimps were not of the exportable quality and had deteriorated and decayed. Ext. P1 notice was issued by the Collector of Customs to show cause why proceedings should not be taken for contravention of the relevant notification under the Export (Quality Control and Inspection) Act, 1963, and why the goods should not be confiscated under Section 113(d) and 118(b) of the Customs Act, 1962, and why penalty under Section 114 of the Act should not be imposed on the exporter. Ex. P2 reply of the exporter was rejected by Ext. P3 order of the Collector. The goods were ordered to be confiscated subject to the option of redeeming the goods by payment of Rs. 12,000/- in lieu of confiscation. A penalty of Rs. 20,000/-was imposed under Section 114. An appeal against the order to the Central Board of Excise and Customs, proved unsuccessful but the penalty was reduced from Rs. 20,000/- to Rs. 10,000/-.

2. The learned Judge quashed the impugned orders holding that the goods when they arrived at the wharf were accompanied by a valid certificate issued by the Export Promotion Agency which was the proper authority to issue the certificate under the Act. The learned Judge observed in the judgment that there was no case that the certificate was issued on any misrepresentation or fraud nor was there any case that a wrong declaration had been made by the exporter or that the exporter had knowingly brought damaged goods to the wharf.

3. The question that arisen is whether in respect of the exportable goods brought to the Customs wharf accompanied by a certificate of export-worthiness, the authorities have power to cancel or to amend the certificate, once it is found on inspection at the wharf or any time subsequent to its issue, that the goods were not export-worthy and that the certificate issued had proceeded on misrepresentation or fraud or mis-conception of facts. In answer to our question whether there was such power or not, our attention was called to Ext. R1 instruction which, it was said, gave the requisite power. It is styled a 'circular'. Clause 2 of the Circular read as follows:

It has now been decided to amend para 3-2 and to add two new paras 3.3 and 9.3 as under:

3.2 In addition to the inspection at the premises mentioned in para 3 1 above, the Agency shall exercise such supervision of inspected consignment (s) at any place of storage, transit or at wharves before its actual shipment as it may consider necessary for satisfying the purpose of compulsory pre-shipment inspection scheme. The samples to be drawn at randum for such examination shall not exceed 5% of the lot depending upon the size of the lot.

3.3 If any consignment on this examination shows defects like softening of the material, off-odour, deterioration etc. it shall be detained and the same shall be brought to the notice of the Customs authorities in writing. In order to further evaluate the extent of such defects the consignment shall be examined in detail in the concerned exporters premises after the seggrega-tion of good and bad material by the exporter. For such detailed examination, double the number of samples as per the table give in 5-1-1-1-2 shall be drawn from each lot.

9.3 For the purpose of inspection of consignment (s) found defective at the wharf and the issue of fresh certificate, if required for a part of the consignment subsequently, no separate inspection fee shall be levied.

Our difficulty in the case is that there is no requisite proof that the requirements of paras 3.2 and 3.3. of the executive instructions have been complied with. In this region where the export of certain goods covered by a certificate of export-worthiness is sought to be penalised and the goods themselves are sought to be confiscated, we should be satisfied that the strict requirements for exercise of the power have been satisfied or complied with. We are not satisfied that there was a detailed examination of the consignment as required by Clause 3.3 of Ext.R1; nor was there anything to show that such detailed examination was after seggregation of the good and bad materials by the exporter as required by the clause. The Central Government Pleader contended before us that seggregation was -impossible and was out of question in the present case, as the whole lot was found un-exportable. The premise was contested by counsel for the respondent; and in these proceedings, we would not be justified in assuming the facts in favour of the Central Government Pleader. As we are not satisfied that the exercise of the power under Ext.R1 has been strictly in accordance with its provision, on this short ground we sustain the order of the learned Judge allowing the writ petition and quashing the impugned orders,

4. The learned Government Pleader contended that the requisite power is to be found in Clause (i) of Section 113 of the Act which we have extracted earlier. There is neither averment nor proof that the requirements of this clause are satisfied and we would not be justified in assuming these facts in favour of the appellants and against the respondent.

We sustain the judgment of the learned Judge and dismiss the appeal with no order as to costs.

10th December, 1979

Sd/- V.P. Gopalan Nambiyar,

Chief Justice.

Sd/- G. Balagangadharan Nair,

Judge.

Leave to appeal to the Supreme Court is asked for. No substantial question of law of of general importance arises. We decline the request.


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