1979 (2) TMI 115 - HC - Customs

Summary

Issues:
1. Violation of the Notification under the Export (Quality Control and Inspection) Act, 1963.
2. Confiscation of goods under Sections 113 and 118(b) of the Customs Act, 1962.
3. Imposition of penalties under Section 114 of the Customs Act.

Analysis:

Issue 1: Violation of the Notification under the Export (Quality Control and Inspection) Act, 1963
The petitioner, a Managing Partner of an exporting firm, challenged the confiscation and penalties imposed on them for alleged contravention of the Notification (No. Se: 771 dated 6.3.1965) under the Quality Control Act. The goods in question were initially certified by the Export Promotion Agency as export-worthy. However, upon further examination at the Customs Wharf, the goods were deemed not export-worthy, leading to the issuance of a notice. The court examined the provisions of the Quality Control Act, emphasizing the necessity of a valid certificate for export. The court concluded that until the goods were declared unexport-worthy, they had not violated the prohibition in the Notification, rendering the confiscation unjustified.

Issue 2: Confiscation of goods under Sections 113 and 118(b) of the Customs Act, 1962
The Collector of Customs ordered confiscation under Sections 113(d) and 118(b) of the Customs Act, alleging violation of the Quality Control Act's Notification. However, the court noted that no attempt was made to export the goods after they were declared unexport-worthy. The certificates initially obtained were considered sufficient evidence of quality until the subsequent examination. As no export attempt was made post the declaration of unexport-worthiness, the court found the confiscation under Section 113(d) baseless and inapplicable. Section 118(b) was also deemed inapplicable due to the absence of attempted export post-declaration.

Issue 3: Imposition of penalties under Section 114 of the Customs Act
The Collector imposed a penalty under Section 114 of the Customs Act, which was later reduced by the Central Board of Excise and Customs. The court highlighted the absence of any case or allegation invoking Section 50 of the Customs Act regarding knowingly false quality statements. As the provisions under Section 50 and Section 113(1) were not invoked, the court found the penalties unjustified. The court allowed the petitioner's challenge against the impugned orders, emphasizing the lack of evidence supporting the alleged violations and penalties.

In conclusion, the court ruled in favor of the petitioner, setting aside the impugned orders and allowing each party to bear their respective costs.