B.C. Basak, J.
1. In this application under Article 226 of the Constitution of India the petitioner is praying for a Writ in the nature of mandamus directing the respondents to allow shipment of teas as per the shipping bill serial No. 2723 dated 11th April, 1975 and the connected invoice by the steamer which will be ready on 16th June 1975 at the Calcutta Port and/or by such other steamer that may be available for shipping teas to the said Port and also for a Writ in the nature of certiorari for quashing the order dated 5th June 1975 passed by the respondent No. 1 and also the show-cause notice issued on 30th April 1975.
2. The case of the petitioner as made out in the petition is as follows:-- The petitioner is a limited company registered in Calcutta carrying on business in teas in India and abroad. The petitioner also acts as commission agents of foreign principals and is also an exporter of teas. The teas grown in various parts of West Bengal and Assam are sold in auctions in Calcutta by the Tea Auctionerslike J. Thomas & Co. Private Ltd. and Caritt Moran & Co. Private Ltd. conducted under the auspices of the Calcutta Tea Traders Association. A show-cause notice was issued, which is Anne-xure J to the petition. The show-cause notice states as follows:--
'No. S5-(Gr. IV-10/75E
From: Asstt Collector of Customs, for ExportCustom House, Calcutta.
To: M/s. A. Tosh & Sons Pvt. Ltd.P-32 & 33 Indian Exchange Place, Calcutta.
Sub: Misdeclaration of value contravention of the provisions of Customs Act, 62 & FERA, 1973 -- Notice to Show Cause.
M/s. A. Tosh & Sons submitted a shipping bill which serially numbered 2723 on 11-4-75 for shipment of 20 chests containing 876.6 Kg. of tea to M/s. Paul Schrader & Co., West Germany under a telegram dated 4-4-75 in lieu of contract. The telegram shows the contract prices quoted by the foregin buyer for sample Nos. 26 and 42 @ Rs. 50 per kg. and for sample No. 45 @ Rs. 60 per kg. But the exporter confirmed the price at a much lower rate. (Rs. 44.00 per kg. for goods represented by sample Nos. 26 and 42 and Rs. 44.50 for goods represented by sample No. 45 as shown in the copy of the telegram). And at the same time exporter invoiced the consignment at a different price which was lower than the quotation price of the foreign buyer.
Thus in view of the aforesaid facts it appears prima facie that the exporter M/s. A. Tosh & Sons Pvt. Ltd. have under invoiced the tea consignment. The amount of the under-valuation noticed in the consignment appears as follows:--
Sample No.Chest (K.g.)Price offered by the foreign buyer.Price confirmed by the exporter.Price invoice by the exporter.Extent of under-valuation.
26-- 8 (331.8 Kg.)Rs. 50/-Rs. 44.00Rs. 46.27Rs. 1237.6142-- 6 (266.4 Kg.)Rs. 50/-Rs. 44.00Rs. 46.27Rs. 993.6745-- 6 (277.8 Kg.)
Rs. 50/-Rs. 44.50Rs. 46.83Rs. 3658.63
20 Chests (876 Kg.)
The export of any goods by misdeclaration of value in the prescribed G.R.L. is prohibited under Section 11 of the CustomsAct read with the Section 18(1)(a) of the FERA of 1973 and Govt. of India's notification No. 12(17)-F1/47 of 4-8-4T. Therefore M/s. A. Tosh & Sons Pvt's attempt at export of the goods under-invoicing their value to the extent as mentioned above constitutes an offence punishable under Section 113(d) and (j) of Customs Act '62. They also appear to be person concerned for penal action under Section 114 of Customs Act '62 read with Section 67 of FERA '73.
M/s. A. Tosh & Sons Pvt. Ltd. is therefore, called upon to explain the matter in writing and also to show cause to the undersigned within seven days hereof why the goods should not be confiscated under Sections 113(d) and 113(i) of Customs Act 1962 and why penal action should not be taken against them under Section' 114 of the Customs Act 1962. Their written explanation should be addressed to the undersigned within the period mentioned above along with the documentary evidence in support of their reply,
Asstt. Collector of Customs
The petitioner replied to the said show-cause notice. By an order dated 12th May 1975 the Asstt. Collector of Customs Export I allowed the petitioner to export the goods at the price offered by the foreign buyer i.e. the so-called bid price and not the price quoted by them in the shipping bill. They were warned to be careful in future. Being aggrieved by the said order the petitioner preferred an appeal and by the appellate order dated 28th May 1975 the Assistant Collector of Customs set aside the original adjudication order and remanded back the case. Thereafter the matter was heard again and a fresh order of adjudication was passed. After setting out the background of this case the Assistant Collector of Customs for Export I passed the following orders:--
'The adjudication of the case was accordingly reopened de novo. In the de novo proceedings, the exporter's advocate Shri N. C. Sen prayed in his letter dated 28-5-75 for adjudication of the case without issue of a further show cause memo. Since I also found that the show cause Memo No. S5(Gr. IV)-10/75E dated 30-4-75 issued by previous Asstt. Collector of Customs for Export-I in this case the framing of charges, was correctly done, I agreed to the submission made in the advocate's prayer for not issuinga show cause memo again. However, a personal hearing was granted to the Advocate Shri N, C. Sen and Shri N.R. Ghosh the Export Manager of M/s. A. Tosh & Sons Ltd, in this connection on 29-6-75.
During personal hearing, the Advocate argued before me that the prices quoted by M/s. Paul Schrader & Co. Bremen in their telegram dated 4-4-75 for teas represented by samples Nos. 26, 42 and 45 sent by the exporters, were the 'bid' prices from buyer's side. They further argued that 'bid' is a price offered in a competition to secure a contract. Therefore, bidding a price in a competitive market, is an action to get a contract and therefore, the same action cannot be contract itself. According to them when an offer of price is reciprocated by acceptance from selling side then the contract comes into existence and force. They further reiterated that they had received an offer by telegram dated 4-4-75, to buy teas represented by samples Nos. 26 and 42 at a total export price not exceeding Rs. 50.00 per kg. and teas represented by samples Nos. 45, 16 at total export price not exceeding Rs. 60.00 per kg. The exporter could however purchase teas represented by samples Nos. 26 and 42 @ Rs. 41.50 per kg. and teas represented by sample No. 45 @ Rs. 42 in the Calcutta auction but. could not purchase teas represented by sample No. 16 as the lot covered by that sample was sold in auction at Rs. 75.00 per kg. After adding freight and commission charges @ 11/2 and other handling charge @ 2 pence per kg. foreign buyers were informed by the exporters through cable dated 8-4-75, the export price for lot represented by sample Nos. 26 and 42 @ 44.00 P. C & F per kg. and the same for lot represented by sample No. 45 @ 44.50 P. C. & F. per kg. At this stage, when the foreign buyer's offer was duly reciprocated by quotation of specific sale price, the instant sale contract had become complete and irrevocable.
Telegram dated 4-4-75 produced in the Custom House along with shipping bill in lieu of a contract, for the sale does not indicate that prices quoted in the same are bid prices for each lot of teas mentioned therein. Therefore, the arguments put forward by exporter's Advocate that 'bid' price is not contractual price is not relevant in this case.
Contract is a document asked by the Custom House assessing Officers to beproduced in connection with scrutiny of an export consignment as an evidence showing buyers' willingness to buy goods at an agreed price. It is examined for satisfaction of the assessing officer for the purpose that price declared in the shipping bill is correct as per buyers' agreement which is deemed to be the maximum bargain price of the goods mentioned therein. Foreign buyers offer price of any goods, if it reasonably covers the domestic value of the goods plus exporter's profit and cost of charges for shipment, and if that price is fairly competitive in relation to offers made for the said goods by other buyers in that buying country or the quoted price is in conformity with the prevailing market condition in the said country such price is considered to be the full export value of the goods as envisaged under Section 18(1)(a) of the FERA 1973, In this context, a Custom House assessing officer is not much meticulously concerned as to whether a contract produced in the Custom House is correct according to the tacit implications of the law of contract or not. He is only to be aware of the buyers' expression of mind regarding his accepted price and other relevant terms which affects customs formalities and rules which a Customs Officer has to administer in the course of his specific duty.
Telegram contract dated 4-4-75 produced in this connection showed prices quoted by foreign buyer for different grades of tea that they wanted to buy. This telegram contract does not show that prices quoted in the same is bid price. Since the telegram contract prices covered well the tea cost price plus exporter's margin of profit and other charges and since the said prices can be considered to be the worth prices for export of the particular teas to the buying country that price should be considered to be the full export value of the goods. Because no buyer can afford to offer a price for any goods, purchasing at which he has to sustain a loss in domestic or otherwise sale. Therefore, the prices shown in the foreign buyer's telegram dated 4-4-75 even if those are correspondingly higher in comparison with domestic sale value in Calcutta auction, permitting quite high profit for exporters, there is no reason to think that such buyer's quoted price in the telegram is not best bargain price which the particular teas worthed in that overseas country. I, therefore, consider that any attempt to export any goods to an overseas country at a price lower than the price that the particular goods worthed in that foreign country, is a case of attempt at under-invoicing and a definite contravention of the provision of Section 18(1)(a) of the FERA, 1973. By virtue of provision of Sec. 67 FERA, 1973 the prohibition imposed under Section 18(1)(a) of the FERA, 1973 shall be deemed to have been imposed under Section 11 of the Customs Act 1962. I hold that the exporters M/s. A. Tosh & Sons Pvt. Ltd. have contravened the provision of Section 11 of Customs Act 1962 read with Section 18(1)(a) and Section 57 of the FERA, 1973 by attempting to export the teas in the subject consignment by declaring their export value lower than the full export value on the GRI and as such teas are liable to confiscation under Section 113(d) and (i) of the Customs Act 1962. I further hold that the exporters are also liable to penal action under Section 114 ibid.