1972 (5) TMI 75 - HC - Customs

Summary

Issues Involved:
1. Validity of the show cause notice dated 1st December 1965.
2. Alleged contravention of Section 12(1) of the Foreign Exchange Regulation Act, 1947.
3. Alleged misdeclaration in the shipping bill under Section 113(i) of the Customs Act, 1962.
4. Jurisdiction of the Customs Authorities.
5. Availability and necessity of alternative remedy under Article 226 of the Constitution.

Detailed Analysis:

1. Validity of the Show Cause Notice:
The appeal arises from an order and judgment dated 8th September 1969, in which the petitioner challenged the show cause notice issued by the Additional Collector of Customs, Calcutta. The notice required the petitioner to show cause why penal action should not be taken under Section 114 of the Customs Act, 1962, based on two allegations: contravention of Section 12(1) of the Foreign Exchange Regulation Act, 1947, and incorrect particulars in the shipping bill.

2. Alleged Contravention of Section 12(1) of the Foreign Exchange Regulation Act, 1947:
The show cause notice alleged that the petitioner had contravened Section 12(1) of the Foreign Exchange Regulation Act, 1947, by not declaring that the full export value would be paid in the "prescribed manner." The court noted that before its amendment in 1969, Section 12(1) did not require the declaration to be in any prescribed form. Therefore, non-submission of the declaration in the form prescribed by Rule 3 of the Foreign Exchange Regulation Rules, 1952, would not amount to a contravention of Section 12(1). The Supreme Court in Union of India v. Raj Bahadur Shreeram Durga Prasad (P) Ltd. held that the Customs authorities' jurisdiction was limited to ensuring that no goods were exported without furnishing the prescribed declaration under Section 12(1). Once the declaration was furnished, the matter was left to the Reserve Bank and the Director of Enforcement.

3. Alleged Misdeclaration in the Shipping Bill under Section 113(i) of the Customs Act, 1962:
The second allegation was that the particulars in the shipping bill were incorrect, making the goods liable to confiscation under Section 113(i) of the Customs Act, 1962. However, the court found that the goods were neither dutiable nor prohibited. The court also noted that the particulars in question, such as the country of final destination and the name of the exporter, were not material particulars relating to the goods within the meaning of Section 113(i). Furthermore, the goods had already been exported and were not "export goods" as defined under Section 2(12) of the Customs Act, 1962.

4. Jurisdiction of the Customs Authorities:
The court held that the Customs authorities did not have jurisdiction to initiate proceedings under Section 113(d) or Section 113(i) or Section 114 of the Customs Act, 1962, based on the facts alleged in the show cause notice. The Supreme Court's judgments in Union of India v. Raj Bahadur Shreeram Durga Prasad (P) Ltd. and Becker Gray & Company (1930) Ltd. v. Union of India supported this view.

5. Availability and Necessity of Alternative Remedy under Article 226 of the Constitution:
The respondents contended that the petitioner had an alternative remedy and should not have moved under Article 226 of the Constitution. However, the court held that where the show cause notice was without jurisdiction on undisputed facts, it was not necessary for the party to exhaust the entire proceeding before seeking relief under Article 226. The court also rejected the argument that the appellate court should not quash the proceedings because they had been allowed to proceed.

Conclusion:
For the reasons mentioned, the court concluded that the show cause notice dated 1st December 1965 was without jurisdiction and quashed it along with all proceedings taken thereunder. The appeal was allowed, and the rule nisi issued under Article 226 of the Constitution was made absolute. There was no order as to costs.