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Issues Involved:
1. Applicability of Sections 113 and 114 of the Customs Act, 1962, for contravention of Section 12(1) of the Foreign Exchange Regulation Act, 1947, in relation to exported goods. 2. Definition and liability of "export goods" under Section 2(19) of the Customs Act, 1962, and their confiscation under Section 113 for penalty imposition under Section 114. Issue-wise Detailed Analysis: 1. Applicability of Sections 113 and 114 of the Customs Act, 1962: The main question was whether the notice dated 28th January 1972, issued by the Deputy Collector of Customs, Exports, calling upon the appellants to show cause why penal action should not be taken against them under Section 114 of the Customs Act, 1962, for violation of the provisions of Section 12(1) of the Foreign Exchange Regulation Act, 1947, is valid. The court noted that the violation of Section 12(1) of the Foreign Exchange Regulation Act would be deemed a violation of Section 11 of the Customs Act by virtue of Section 23A of the Foreign Exchange Regulation Act. This would attract the provisions of Sections 113 and 114 of the Customs Act. The court held that Section 113 of the Customs Act deals with the liability to confiscation of export goods when they are attempted to be exported contrary to any prohibition. This liability arises as soon as the attempt to export the goods is made, regardless of whether the goods have actually been exported. Section 114 provides for penalties for acts or omissions that render goods liable to confiscation under Section 113. The court concluded that the accrued liability to confiscation under Section 113 is not extinguished by the actual export of the goods. Therefore, the provisions of Sections 113 and 114 of the Customs Act are attracted even if the goods have been exported, provided there was a contravention of Section 12(1) of the Foreign Exchange Regulation Act. 2. Definition and Liability of "Export Goods": The court examined whether goods that have been exported can be considered "export goods" under Section 2(19) of the Customs Act, and thus be liable to confiscation under Section 113 for penalty imposition under Section 114. Section 2(19) defines "export goods" as goods which are to be taken out of India to a place outside India. The court held that goods that are attempted to be exported contrary to any prohibition imposed by or under the Customs Act or any other law for the time being in force incur liability to confiscation under Section 113(d). This liability arises at the time of the attempt to export the goods, which precedes the actual exportation. The court clarified that the liability to confiscation is incurred when the goods are attempted to be exported and remains even if the goods are subsequently exported. The goods are considered "export goods" at the time they incur the liability to confiscation, as they are still within the definition of goods to be taken out of India. Conclusion: The court concluded that by virtue of Section 23A of the Foreign Exchange Regulation Act, the provisions of Sections 113 and 114 of the Customs Act are attracted in cases of contravention of Section 12(1) of the Foreign Exchange Regulation Act, even if the goods have been exported. The liability to confiscation under Section 113 arises at the time of the attempt to export the goods, and this liability is not extinguished by the actual export of the goods. The court dismissed the appeal and upheld the validity of the show cause notice issued under Section 114 of the Customs Act.
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