G.K. Mitter, J.
1. This is an appeal from an order-discharging a Rule Nisi for the issue of a writ in the nature of certiorari against several Additional Collectors of Customs and the Union of India. The Rule was directed against an order passed on August 9, 1956 imposing a personal penalty of Rs. 33,050/-under Section 187(8) and (3) of the Sea Customs Act on Sharma & Sons.
(2) The petitioner, the appellant before us, carried on business under the name and style of 'Sharma & Sons' at No. 1/1, Jagmohan Lane, Calcutta in oil cakes and foodgrains. At the material time he held a licence allowing him to export Sesame Cake of a certain value. With the help of this licence a consigment of 1070 bags declared to contain 76 tons 8 Cwt. 2 Qts. 8 lbs. of oil cake worth Rs. 19871/7/-was put on board the Indian Navigator under cover of a shipping bill dated September 30, 1955 issued in favour of Sharma & Sons. Investigation made by the Customs Authorities revealed that the bill of lading for the goods and the insurance policy were taken in the name of Shree Bhagwati Oil Mills Ltd. The invoice and the certificate of quantity and weight and other documents (showing the goods shipped to be 80 tons. 5 Cwt.) also stood in the name of the same company. Most of these documents were signed by one S.I. Agarwal, Director of Messrs. Keyal Bros. Ltd., the Managing Agents of Messrs. Shree Bhagwati Oil Mills Ltd. These and other documents were seized on search of premises of Shree Bhagwati Oil Mills Ltd., in Howrah and of Kedarnath Mohanlal and their associate firms including the offices of Keyal Bros. Ltd. and Shree Bhagwati Oil Mills Ltd., at 9, Jogmohan Mallick Lane, Calcutta. According to the Customs Authorities the C.I.F. value of the goods was 2478-152. On March 19, 1956 the Assistant Collector of Customs, and Superintendent, Preventive Service, Custom House, Calcutta issued a show cause notice on Sharma & Sons noting the above facts and stating that the real shippers of the consignment were Messrs. Shree Bhagwati Oil Mills Ltd. According to the Customs Authorities the searches revealed that:
(1) 2 tons, 17 cwt. 1 Qt. 8 lbs, of the total quantity shipped was not declared in the shipping bill nor was duty paid thereon. The quantity was not covered by any Export Trade Control Licence. There was thus a violation of Section 137 of the Sea Customs Act and Section 3 of the Import and Export (Control) Act. By reason of the above offences under Section 167(3) and Section 167(3) of the Sea Customs Act had been committed in respect of the excess quantity shipped.
(2) The F.O.B. value of the consignment actually shipped, was not correctly declared in the shipping bill.
The requirements of Section 12(1) of the Foreign Exchange Regulation Act were not therefore fulfilled. Thus there was an offence under Section 167(3) of the Sea Customs Act read with Sections 12(1) and 23(a) of the Foreign Exchange Regulation Act in respect or the entire consignment.
3. Inasmuch as the licence stood in the name of Sharma & Sons, the shipment by Messrs. Shree Bhagwati Oil Mills Ltd., was unauthorised being without a valid Export Trade Control Licence in the name of the actual shippers themselves. This disclosed an offence under Section 167(3) of the Sea Customs Act read Section 3(3) of the Import and Export (Control) Act, in respect of the entire consignment.
4. Messrs Sharma & Sons who lent their name to be utilised by the actual shippers Shree Bhagwati Oil Mills Ltd., Keyal Bros, Ltd., the Managing Agents of the actual shippers and S.I. Agarwal who signed most of the shipping documents were all persons concerned in the offence covered by Section 167(8) of the Sea Customs Act. They were also liable for penal action under Section 167(3) of the Sea Customs Act.
(3) Sharma & Sons were called upon to explain in writing within a week and show cause why penal action should not betaken against them under Section 167(3) and (8) of the Sea Customs Act as mentioned. They were also asked to state whether they wished to be heard in person. They were notified that on the failure to submit a written explanation or appearance before the writer when the case was fixed for hearing it might be decided on evidence without any further notice. On April 6, 1956 the said Customs Officer informed Sharma & Sons in writing that there was failure to reply to the show cause notice but an extension was given upto April 13, 1956. On April 12, 1956 an employee of the petitioner wrote to the Collector of Customs that the petitioner, the proprietor of Sharma & Sons, was out of Calcutta and the matter had been referred to him. In the circumstances an extension was asked for This was replied to by letter dated April 23, 1956 to the effect that if no reply to the show cause notice was received by April 29, 1956 the matter would be decided on evidence already in hand.
4. The petitioner alleges that he had personally approached the Additional Collector of Customs after May 17, 1956 for an opportunity to show cause and, that he was thereupon informed that the case had been adjudged ex parte and the order passed would be communicated to him in due course. On March 21, 1957 the petitioner received a memo showing that a fine of Rs. 33,050/- had been imposed on Sharma & Sons as personal penalty under Section 167(8) and (3) of the Sea Customs Act. This adjudication order which forms annexure 'C' to the petition is practically a reproduction of the assertions in the show cause notice except the portion where the findings are recorded. The finding was to the effect that the documentary evidence had established the charges against Sharma & Sons who were guilty of offences under Section 167(8) and (3) of the Sea Customs Act read with Sections 12(1) and 23(A) of the Foreign Exchange Regulation Act and Section 3 of the Import and Export (Control) Act. The order which bears the date 9th August 1956 was despatched on 15th February 1957 calling upon the petitioner to pay the personal penalty within one week. On 28th March 1957 the petitioner wrote to the Collector of Customs complaining that penalty had been imposed without giving him an opportunity to show cause. In the circumstances he wanted the matter to be re-opened. By letter dated 12th April 1957 the Assistant Collector of Customs informed the petitioner that in spite of repeated notices he bad failed to appear in person or show cause in writing before the making of the order complained of and as such the same could not be re-opened.
5. The appellant moved this Court under Article 226 of the Constitution by a petition affirmed on 9th May 1957. He complained that the order of 9th August 1956 was in violation of the principles of natural justice besides being arbitrary and without jurisdiction. His grievance was that he had been given no reasonable or proper opportunity to show cause before imposition of the illegal penalty and that the respondents bad not disclosed the evidence on record against him so that he could meet the same. He further charged the respondents with having acted arbitrarily and capriciously in deciding the matter without any evidence. He raised a constitutional point that Section 167(8) of the Sea Customs Act was in contravention of Article 14 of the Constitution on the ground namely:
(a) The section was discriminatory in effect and operation in inasmuch as it vested the Customs Authorities with unregulated and uncontrolled power in imposing penalty in the manner contained therein.
(b) The section did not enunciate any principle on the basis of which the Customs Authorities were to select the scale of penalty to be imposed on persons accused of the same offence.
(c) The section did not hit equally persons accused of the same offence.
6. According to the petition the offending goods were only 2 tons, 7 Cwt. 1 Qt. 8 lbs. (the difference between the quantity alleged to be actually shipped and that shown on the shipping bill). The value of the same was approximately Rs. 800 and the penalty should not in any event have exceeded three times this amount. The petitioner further pleaded that the Customs Authorities had no Jurisdiction to impose a penalty beyond a sum of Rs. 1000.
7. In the affidavit in opposition charges of violation of the principles of natural justice were denied. It was asserted that the petitioner had failed to give any reply to the show cause notice without justification. The story of the petitioner having seen the Assistant Collector of Customs after May 17, 1956 was denied. The other averments made in the petition were traversed and the unconstitutionality of Section 167(8) of the Sea Customs Act was disputed. It was further stated that the shipping of the entire consignment valued at Rs. 19871-7.0 was in violation of the provisions of the Sea Customs Act and penalty could therefore be imposed upto three times of the value of the said goods on each and every person concerned in such offence.
8. Before us the point as to the violation of the principles of natural justice was not seriously pressed as indeed it could not be. The appellant has not disclosed any facts to show that he was unable to attend to the notice or prevented by any just and sufficient cause from giving a reply thereto or appearing in person in pursuance thereof. Further there is nothing to corroborate his assertion of having approached the Customs Authorities after May 17, 1956 as alleged by him. The show cause notice was duly received in his office and in the normal course of things he must be taken to have been apprised of the same by the person receiving it. If the appellant was minded to answer the charges levelled in the show cause notice he could easily have done so.
9. The points taken before us were:
(1) There was no evidence to show that the real shippers of the consignment were Shree Bhagwati Oil Mills Ltd. As the Export Licence stood in the name of the appellant and the shipping bill was also in his name charges 3 and 4 in the show cause notice-could not have been made against him.
(2) 'Such goods' in Section 167(8) can only mean the offending goods which in this case weighed-only 2 tons 7 cwt. 1 qt. 8 lb. The levy of any penalty in excess of Bs, 2400, that is to say, three times the-value of the offending goods was illegal.
(3) Section 167(8) laid down two alternative-scales for the levy of penalty, one on the value of the-goods upto three times the amount and the other a personal penalty not exceeding Rs. 1,000 without any guidance as to which particular scale was to be adopted in a given set of facts.
(4) The order was perverse as it disclosed no reasons and contained no findings. As there was provision for appeal in Section 188 of the Sea Customs Act it was obligatory on the Customs Authorities to-disclose the reasons which prompted the making of the order. In the absence of such reasons the provision for appeal was rendered nugatory.
10. Before dealing with the arguments advanced it is necessary to take note of the relevant provisions-of the Sea Customs Act, the Import and Export (Control) Act, the Foreign Exchange Regulation Act and the Export Control Order. Under Section 19 of the Sea Customs Act (contained in Chap, IV) the export of any specified goods out of India may be prohibited by the Central Government by notification in the Official Gazette. Under Section 29 it is duty of the owner of goods intended to be exported to give the real value, quantity and the description thereof in the shipping bill to the best of his knowledge and belief. Section 29B(2) provides that the Officers of Customs may make an order allowing goods meant for export to be shipped for exportation after duty assessed provisionally thereon under Sub-section (1) has been paid. Under Section 137 no goods, except passengers baggage can be shipped or water borne to be shipped for exportation until the owner has paid the duties payable on such goods. Section 167 enumerates the offences under the Act and the penalties prescribed therefor. Under item 3 of the section it is an offence to ship or aid in the shipment of goods contrary to the provisions of the Act. The penalty prescribed therefor is one not exceeding Rs. 1,000. Under item 8 of the section it is an offence to export from India any goods the exportation of which is prohibited under Chap, IV of the Act (containing Section 19). When such an offence is committed the goods are liable to confiscation and any person concerned in any such offence is liable to a penalty not exceeding three times the value of the goods or not exceeding Rs. 1,000, Section 182 prescribes the Customs Officers who can impose penalties or order confiscation of goods in respect or officers under Section 167. The jurisdiction of the different grades of Officers is thereunder clearly specified. All orders under the Act are subject to appeal as laid down in Section 188. Power is given to the authorities hearing an appeal to make further enquiry and pass such order as may be necessary either confirming, altering or annulling the decision or order appealed against. Even this is not final and the Central Government is authorised by Section 191 to revise any decision or order by any Officer of Customs or Chief Customs Authority from which no appeal lies and reverse or modify such decision or order.
11. Under Section 12 of the Foreign Exchange Regulation Act (Act VII of 1947) the Central Government may, by notification in Official Gazette, prohibit the export of any goods or class of goods specified in the notification unless a declaration supported by such evidence as may be prescribed or specified is furnished by the exporter to tile prescribed authority that the amount representing the full export value of the goods has been or will within the prescribed period be paid in the prescribed manner. By the operation of Section 23A of the Act the restrictions imposed by Sub-section (1) of Section 12 shall be deemed to have been imposed under Section 19 of the Sea Customs Act and all the provisions of that Act shall have effect accordingly.
12. Under Section 3(1) of the Import and Export (Control) Act, 1947 the Central Government was empowered to make provision for prohibiting, restricting or otherwise controlling the export of goods of any Specified description by order published in the official gazette. Under Sub-section (2) of the section all goods to which any order under Sub-section (1) applied were to be deemed to be goods of which the export had been prohibited under Section 19 of the Sea Customs Act and all the provisions of the Act were to have effect accordingly. Under Section 5 of the Act any contravention of any order made under the Act is, without prejudice to any confiscation or penalty provided by the Sea Customs Act, to be punishable with imprisonment or with fine or with both.
13. In exercise of power conferred by Sections 3 and 4A of the Import and Export (Control) Act, 1947, the Central Government made an order intituled the Export (Control) Order, 1954. Under Clause (3) of this Order export of goods of the description specified in Schedule I was prohibited except under and in accordance with a licence granted by the Central Government or by any officer specified in Schedule II. Under Clause (5)(1) of the Order a licence granted thereunder may contain such conditions, not inconsistent with the Act or the Order, as the licensing authority may deem fit. Sub-clause (2) of Clause (5) provides:
It shall be deemed to be a condition of every licence1:
(a) that the licensee shall not, except with the permission in writing of the licensing authority or any person authorised by it in this behalf, transfer the licence;
(b) that the goods for the export of which the licence is granted shall be the property of the licensee at the time of the export.
Schedule I of the Export (Control) Order shows that the sesame seed is one of the goods specified thereunder.
14. Bearing in mind the above provisions of law-let us examine the contentions of the appellant. With regard to the first point that there was no evidence to show that the real shippers of the consignment were Bhagawati Oil Mills Ltd., the position seems to be as follows : The person granted the export licence was the appellant and he filed the shipping bill with respect to the consignment of 1070 bags of sesame cake. The documents which were seized as a result of search of the various premises were the bill of lading, the insurance policy, the invoice and the certificate of quantity and weight. These divulged that the weight was not 76 tons 8 cwt, as stated in the shipping bill but 80 tons 5 cwt. Further the correct c.i.f value was 2,478-15 Section which is much in excess of Rs. 19,871/7/- as shown in the shipping bill.
15. It was strenuously contended before us that the making out of the bill of lading in the name of Bhagwati Oil Mills Ltd., was not conclusive to show that the ownership of the goods belonged to them. Mr. Roy, learned Counsel for the appellant, drew our attention to Article 3 of Scrutton on Charter-parties 15th edition, p. 10 to show that
a bill of lading is a receipt for goods shipped on board a ship, signed by the person who contracts to carry them, or his agent, and stating the terms on which the goods were delivered to and received by the ship. It is not the contract, for that has been made before the bill of lading was signed and delivered, but it is excellent evidence of the terms o contract.
The above statement deals with only one aspect, of the matter. According to Halsbury's Laws of England, 3rd Edition, Vol. 35, Article 470:
A bill of lading is a document signed by the shipowner, or by the master, or other agent of the shipowner, which states that certain specified goods-have been shipped upon a particular ship, and which purports to set out the terms on which such goods have been delivered to and received by the ship. After signature it is handed to the shipper, who may either retain it or transfer it to a third person. This person may be named in the bill of lading as the person to whom delivery of the goods is to be made-on arrival at their destination, in which case he is known as the consignee if he is not named in the bill of lading, he is usually known as the holder or indorse of the bill of lading.. The effect of a, bill of lading depends upon the circumstances of the particular case, of which the most important are the position of the shipper and of the holder.
According to the same author, Article 474:
The bill of lading is a symbol of the right of property in the goods specified therein. Its possession is equivalent to the possession of the goods themselves, and its transfer, being a symbolical delivery of the goods, has by mercantile usage the same-effect as an actual delivery in the same circumstances. On a transfer, therefore, of a bill of lading, by way of sale, mortgage, or pledge the property in the goods passes either absolutely or otherwise, according to the intention of the parties, to the transferee, provided that the transferor was competent to dispose of the goods; and the right of the original owner of the goods to stop them in transit is either wholly defeated (in the case of an absolute transfer by way of sale) or becomes subject to the mortgage or pledge.. As regards the shipowner the bill of lading is a document of title,. entitling its holder on production to delivery of the goods.
The form of a bill of lading and its contents are dealt with in Article 478.
A bill of lading is usually expressed in a printed document, containing blank spaces for the insertion of the necessary details. It states that certain goods, which are specified in the margin, have been shipped in good order and condition by the shipper in and upon a certain ship then lying in the port of loading and bound for a particular port and are to be delivered in like good order and condition at their destination to, or to the order of a specified person or his assigns or to bearer, upon payment of freight.
Article 481 which deals with the right to receive a bill of lading shows that
the person who at the time of shipment is the owner of the goods is entitled to receive a bill of lading, and to have it made out in accordance with his legitimate instructions. If he is refused a trill of lading, or it the terms of the bill of lading offered differ from those which he is entitled to require, or if his instructions are not complied with, he may demand the redelivery of his goods, and a refusal to redeliver them when so demanded, amounts to a conversion of them by the shipowner.
16. According to the show cause notice itself the bill of lading showed that Bhagawati Oil Mills Ltd. to be the shippers. As quoted above possession by a person of the bill of lading made out in his mama prima facie shows that he is the owner of the goods. This was further corroborated by the insurance policy and the other documents all being made out in the name of Bhagawati Oil Mills Ltd. Mr. Roy argued that the taking out of the insurance policy in the name of said company merely showed that they had an insurable interest in the goods. By itself the making out of an insurance policy in the name of a particular person might not lead to a finding that he was the owner of the goods, but it is at least prima facie evidence that he had some ownership or interest therein. On the documents seized as a result of the search, the Custom authorities cannot be blamed for coming to conclusion prima facie that the real shippers of the consignment were Bhagawati Oil Mills Ltd., who had exported the goods on the strength of the export license of the appellant in violation of the Export Control Order. It was for the appellant to produce evidence before the authorities to dislodge the prima facie conclusion and to establish that he was the real shipper.
17. On the documents relied on by the customs authorities all the charges mentioned in the show cause notice could properly be levelled against the appellant. There was only one consignment of 1070 bags which weighed over 80 tons. As duty had been paid only on a quantity of 76 tons 8 cwt. there was an under-payment of duty. The show cause notice : further showed that the excess quantity was not covered by the Export Control Licence. Section 167(d) of the Sea Customs Act was thus attracted : there was a violation of Clauses (3) and (5) of the Export (Control) Order and a violation of Section 19 of the Sea Customs Act by the operation of Section (3)(2) of the Import and Export (Control) Act, 1947, Consequently, the offence of shipping goods contrary to the provisions of the Sea Customs Act as laid down in items 3 and 8 of Section 167 of the Act was committed in respect of the excess quantity.
18. As the documents seized showed that c.i.f. value of the goods was lb, 244845s. the same value should also have been shown on the shipping bill, but according to the latter document the value was only Rs. 1,9871-7-0. There was thus a violation of Section 12(1) of the Foreign Exchange Regulation Act which by the operation of Section 23A of the Act attracted the provisions of Section 19 of the Sea Customs Act. Under item 8 of Section 167 the entire goods were liable to confiscation but as the goods had passed out of India any person concerned in the offence was liable to a penalty not exceeding three times the value thereof or not exceeding Rs. 1,000.
19. Further, the licence being in the name of Sharma & Sons, Bhagawati Oil Mills Ltd., could not have been the shippers in respect of the consignment. In the absence of any evidence to the contrary a finding on the charge that Sharma & Sons had lent their name to be utilised by the shippers Bhagawati Oil Mills Ltd. was not unjustified. A person who lends his name and his licence for the purpose of export of goods out of India contrary to the provisions of the Sea Customs Act read with the Import & Export (Control) Act, 1947 and Export (Control) Order, 1954 is punishable as a person concerned in the offence specified in Item 8 of Section 187 of the Act.
20. In my opinion the charges mentioned in the show cause notice were not unfounded and in the absence of explanation and evidence exculpating the appellant the adjudication order was not illegal. The first point raised on behalf of the appellant therefore fails.
21. The second point raised is also without any merit. There was only one consignment of 1070 bags. It was only for the convenience of carriage that the goods were put in different bags. Each bag did not form a separate consignment. If there was an underpayment of duty it was in respect of the entire consignment. If the goods had been shipped in bulk it could not have been argued that the offending goods were only an unspecified portion weighing a little over 2 tons. If the goods had not left the country an order of confiscation night have been made in respect of the whole. The offence which was committed was thus not in respect of the excess quantity shipped but the entire consignment.
22. The next point urged was that the third column of item 8 of Section 167 of the sea Customs Act provided for two distinct and separate classes of penalties without specifying which class was to be adopted in a particular case with the result that two persons charged with the same offence might be treated differently, that is to say, one could be penalised upto three times the value of the goods termed by a counsel as value penalty, while another person could be inflicted with a monetary penalty-termed as personal penalty. It was argued that the possibility of unequal treatment of two persons in the same position infringed Article 14 of the Constitution. Mr. Roy sought to fortify his argument by citing several decisions of the Supreme Court where the constitutionality of the Taxation of Income (Investigation Commission) Act as amended from time to time came up consideration by the Supreme Court. The first case is that of Surajmull Mohta and Co. v. A.V. Viswanatha Sastri : 26ITR1(SC) . Although various points were urged about the unconstitutionally of different provisions of the Taxation of Income (Investigation Commission) Act, 1947, the Supreme Court came to the conclusion that Sub-section (4) of Section 5 of the Act and the procedure prescribed by it in so far as it affected the person proceeded against under that sub-section was a piece of discriminatory legislation offending against the provisions of Article 14 of the Constitution. The Court took the view that Sub-section (4) of Section 5 dealt with the same class of persons the fell within the ambit of Section 34 of the Indian Income Tax Act and were dealt with in Sub-section (1) of that Section and whose income could be caught by proceeding under that section. The Court observed:
Assessees who have failed to disclose fully and truly all material facts necessary for the assessment under Section 34 can be equated with persons who are discovered in the course of the investigation conducted under Section 5(1) to have evaded payment of income-tax on their incomes. The result is that some of these persons can be dealt with under the provisions of Act XXX of 1947, at the choice of the commission, though they could also be proceeded with under the provisions of Section 34 of the Indian Income-tax Act.. It is well settled that in its application to legal proceedings. Article 14 assures to everyone the same rules of evidence and modes of procedure, in other words, the same rule must exist for all in similar circumstances. It is also well settled that this principle does not mean that every law must have universal application for all persons who are not by nature, attainment or circumstances, in the same position. The state can by classification determine who should be regarded as a class for purposes of legislation and in relation to a law enacted on a particular subject but the classification permissible must be based on some real and substantial distinction bearing a just and reasonable relation to the objects sought to be attained and cannot be made arbitrarily and without any substantial basis.. There is nothing uncommon either in properties or in characteristics between persons who are discovered as evaders of income-tax during an investigation conducted under Section 5(1) and those who are discovered by the Income-tax Officer to have evaded payment of income-tax. Both these kinds of persons have common properties and have common characteristics and therefore require equal treatment.
23. In Shree Meenakshi Mills Ltd. v. A.V. Viswanathan Sastri (S) : 26ITR713(SC) , the above two Acts as amended came up for consideration once more before the Supreme Court. The Taxation of Income (Investigation Commission) Act was amended in 1948 by providing for the extension of the life of the Commission in the first instance to March 31, 1950 with a possibility of further extension to March of 1951. By subsequent legislation the life of the commission was extended upto December 1955. The Indian Income-tax Act was amended first by an Ordinance of 1954 and then by an Act passed on September 25, 1954. One of the points raised before the Supreme Court was whether, after the coming into force of the Indian Income-tax Amendment Act, 1954, which operates on the same field as Section 5(1) of Act XXX of 1947, the provisions of Section 5(1) of Act 30 of 1947, assuming they were based on a rational classification, have not become void and unenforceable, as being discriminatory in character. The Court observed that
both categories of persons, namely, those who Came within the scope of Section 5(1) as well as those who came within the ambit of Section 34, now form one class.. That being so, the only basis for giving them differential treatment, namely, they formed a distinct class by themselves, has completely disappeared, with the result that continuance of discriminatory treatment to them comes within the mischeif of Article 14 of the Constitution and has thus to be relieved against.
The Court concluded that there was no satisfactory basis for discrimination and consequently two different laws of Procedure could not be allowed to operate on the same field.
24. The same line of reasoning was adopted in the case of Muthiah v. Income-tax Commissioner Madras (S) : 29ITR390(SC) by the majority Judges.
25. Counsel also drew our attention to the case of S.M. Nawab Ariff v. The Corporation of Calcutta 64 Cal W N 1 AIR 1960 Cal 159 (SB) In this case the validity of S 237 of the Calcutta Municipal Act of 1951 which gave the Corporation a power to proceed to realise the arrears of consolidated rates from a person by the issue of a distress warrant without instituting a suit under Section 251, was questioned. Das Gupta C.J. came to the conclusion that the procedure of distraint as provided under Section 237 of the Calcutta Municipal Act was very much more onerous and prejudicial to a defaulting rate-prayer than the procedure by suit under Section 251. He accordingly held that the law as laid down in Section 237 was discriminatory and violative of Article 14 of the Constitution. Lahiri J. (as he then was) concurred with the Chief Justice but Bose J. (the present Chief Justice) took a different view.
26. It is to be observed that the above cases established the proposition that two persons who fall within the same category cannot be proceeded against under different procedure unless there is any thing to justify the discriminatory treatment. So far as Section 167(8) of the Sea Customs Act is concerned there is no question of diversity of procedure. The difference lies in the amount of the penalty which may be inflicted. It will be noticed at once that merely because two persons have been charged with the same offence they need not necessarily be awarded the same penalty. Where the exportation contrary to law is the offence and the persons proceeded against are (1) the owner of the goods himself and (2) an employee of his, different punishments can legitimately be meted out to them, the owner of the goods normally being more culpable than his employee who merely helps him and ordinarily justice would demand that the owner be more seriously dealt with than the employee. At first sight it might appear that the punishments provided in the third column of Item 8 of Section 167 are of two different types but a closer scrutiny will show that it is not so. It is now established by a decision of the Supreme Court to which I shall refer presently that Rs. 1,000/- is not the maximum penalty which can be imposed for an offence under item 8 of Section 167. The limit is three times the value of the goods which may well exceed Rs. 1,000/-. The object of the Sea Customs Act is not only to recover duty the payment of which is sought to be evaded but to impose confiscation of goods and penalties so that similar offences might not be repeated. In respect of goods of considerable value the legislature thought three times the amount was the limit of the penalty to be imposed. But when the value of the goods was trifling or when though small it was not easily computable the legislature may well have thought that Rs. 1,000/- should be the limit of penalty leviable. The penalty is in all cases a pecuniary penalty apart from the confiscation of the goods. The two alternatives provided in the third column of item 8 of Section 167 merely indicate the limit of the penalty when the value is not inconsiderable or when the value is insignificant or when it is small and not easily computable. Section 167(8) of the Sea Customs Act has been scrutinised by the Supreme Court in several cases. In F.N. Roy v. Collector of Custom (S) : 1983ECR1667D(SC) , the Court observed that the discretion to be exercised in ordering a penalty under Section 167(8) was not uncontrolled or unreasonable as it was vested in high Customs Officers with provisions for appeal from their order.
The imposition of the fine is really a quasi judicial act and the test of the quantum of it is in the gravity of the offence. The object of the Act is to prevent unauthorised importation of goods and the discretion has to be exercised with that object in view.
Incidentally, a remark was made that the maximum Density which could be imposed under the section was Rs. 1.000/. Relying mainly on this it was argued by the appellants in the case of Ranchhoddas Atmaram v. Union of India : 1961CriLJ31 that the imposition of penalties in excess of Rs. 1,000/- was invalid. Section 167(8) of the Act was examined at length by the Supreme Court in coming to the conclusion that a penalty exceeding Rs. 1,000/- could be Imposed. Dealing with item 8 the Court said:
Any of the alternative penalties provided may be imposed though the amount of it exceeds the amount of the maximum in the other alternative. A consideration of the object of the Act also supports that view. The Act is vital for the country's economic statibility. It is intended to prevent smuggling in goods and such goods may be of large value. A small One of Rs 1000/ would often be quite inadequate serve these objects. It would be in consonance with such objects if power is given to the authorities concerned to impose a higher penalty when the occasion requires it.. There seems to us to be good reason why two alternative penalties were provided. Where the value of the goods is very large, it may be that a penalty of Rs. 1,000 would be too inadequate a punishment Again it may be that three times value of the goods may be much smaller than Rs. 1,000. It may conceivably be necessary in such a case by reason for example, of the person concerned having on earlier occasions committed the same offence or ha vine shown a determined state of mind to commit the offence, to infilict a penalty higher than three times that value. Then it may also happen that the value of the thing concerned may, in conceivable circumstances, not be properly ascertainable. In such a case the alternative penalty up to Rs. 1,000 has to be adopted if any penalty at all is to be awarded.
27. It is true that no argument was advanced in Ranchhoddas's case, AIR 1961 SC 935 that there was a violation of Article 14 by reason of the inclusion of two alternative penalties in item 8 without any express indication to show which particular penalty was to be inflicted in a given case. In my view, however the classification is implicit in the section itself hearing in mind the object of the Act. The legislature clearly intended that three times the value of the goods when not negligible was the maximum which would be inflicted by way of penalty. As to the exact amount of the penalty the Customs Officers were to use their own discretion in view of all the circumstances attending the violation of the Act. The legislature further recognised that levy of penalty to the extent of three times the value might not act as a determinant when the value was insignificant. To meet such a case Rs. 1,000 was fixed as the limit of the penalty.
28. The last point urged on behalf of the appellant was that the order of August 9, 1956 should be quashed because no reasons had been given in support of the finding. It was argued that inasmuch as the Sea Customs Act provided for appeals under Section 188 from orders like those made in the instant case such provision would be rendered nugatory if no reasons in. support of the decision was given by the officer levying a penalty. In support of his argument counsel cited the judgment of the Supreme Court in Harinagar Sugar Mills Ltd. v. Shyam Sunder : 2SCR339 . The matter arose out of a refusal of the directors of a company to register certain transfers in exercise of powers confided to them by the Articles of Association. The transferees preferred separate appeals to the Central Government under Section 111 of the Act. By separate orders the Deputy Secretary of the Government of India, Ministry of Finance set aside the resolution passed by the Board of Directors without assigning any reasons. Against these orders the company went up in appeal under Article 136 of the Constitution to the Supreme Court.
It was in connection with this that the Court observed:
If the Central Government acts as a tribunal exercising judicial powers and the exercise of that power is subject to the jurisdiction of this Court under Article 136 of the Constitution, we fail to see how the power of this Court can be effectively exercised if reasons are not given by the Central Government in support of its order.
In the result the Court held that there had been no proper trial of the appeals, no reason having been given in support of the orders by the Deputy Secretary who heard them.
29. In my view the same remark cannot be made with regard to the order of August 9, 1958. The order is no doubt a quasi judicial order and as such it might be open to challenge it there was nothing to show how the mind of the customs authorities worked in this case. The case is a bit complicated by reason of the impingement of different Acts like the Import & Export (Control) Act, Foreign Exchange Regulation Act, the Export Control Order and the Sea, Customs Act on the facts of the case, but if the relevant portion of these Acts and the Order are kept in view the show cause notice is not incomprehensible. The main question is whether the appellant was the shipper of the goods That position is not established merely by the shipping bill being made out in his name. The bill of lading whose character have already described shows that the shippers were Bhagawati Oil Mills Ltd. The insurance policy stood in their name as also the certificate of quantity and weight. All these documents were signed by S.I. Agarwalla, Director of M/s Keyal Brothers Ltd., agents of Bhagawati Oil Mills Ltd. The show cause notice shows that it was on the basis of these documents that the Assistant Collector of Customs took the view that the real shippers of the consignment were Bhagawati Oil Mills Ltd. Again it was not contended before us that there was no discrepancy, between the weight as shown in the shipping bill and the actual quantity shipped. Thus, there was an evasion of duty. No explanation was given to account for the difference in F.O.R value of 2,478 and the invoice amount of Rs. 19,871/- Further as the licence stood in the name of the appellant, Rhagawati Oil Mills Ltd. could not act as the shippers and on the strength thereof obtain the bill of lading. No doubt the finding could have been more elaborate than it is but the appellant, who never eared to send a reply to the show cause notice or appear in pursuance thereof, cannot be heard to complaint about any difficulty in, appreciating the charge On the facts of this case I am not prepared to hold that the order was perverse or that it was lacking in reason and should be quashed by reason of any such infirmity.
30. The complaint that the provision for appeal from the order became nugatory in the absence of any reasoning can hardly be made by a person who never sought to prefer an appeal. There was nothing to prevent the appellant from presenting an appeal under Section 188 of the Sea Customs Act and contending before the Appellate Authority that he had been prejudiced by the absence of reasoning in the impugned order. For there the appellate authority could have redirected a rehearing. The point in my opinion has no substance on the facts of this case.
31. In the result, the appeal must be dismissed With costs.
32. Certified for two Counsel.
33. I agree.