1991 (8) TMI 95 - HC - Customs

Issues Involved:
1. Legality of the order dated February 25, 1991, passed by the Additional Chief Controller of Imports & Exports.
2. Contempt of the Supreme Court by the petitioners.
3. Prosecution for fraud and cheating the Customs Authorities.

Detailed Analysis:

1. Legality of the Order Dated February 25, 1991:
The petitioners challenged the legality of the order dated February 25, 1991, passed by the Additional Chief Controller of Imports & Exports. The petitioners had imported 72 Metric Tonnes of Butyle Acrylate using a Replenishment Licence meant for aluminium/aluminium rods, which was invalid for such import. The Customs Authorities refused clearance, leading the petitioners to seek relief from the Supreme Court, which allowed clearance with the condition that the goods would not be sold until further orders. However, the petitioners sold the goods.

The Additional Chief Controller issued a show cause notice under Clause 10 of the Imports (Control) Order, 1955, and Section 4-I of the Imports and Exports (Control) Act, 1947, citing violations of import regulations and the Supreme Court's order. Despite multiple opportunities, the petitioners failed to provide a satisfactory reply or attend personal hearings, claiming the necessary documents were seized by the CBI. The Additional Chief Controller found the petitioners guilty of violating Clause 8(1) and (d) of the Imports (Control) Order and Section 4-K of the Imports and Exports (Control) Act, imposing a fiscal penalty of Rs. 10 lakhs and debarring them from certain import activities.

The court found no merit in the petitioners' claim that they could not respond effectively due to the CBI's seizure of documents, noting that they made no effort to obtain copies or request the Chief Controller to secure the documents from the CBI. The court concluded that the petitioners had no answer to the charges and upheld the penalty as extremely lenient, dismissing the petition.

2. Contempt of the Supreme Court:
The petitioners were issued a notice to show cause why action under the Contempt of Courts Act should not be taken for flouting the Supreme Court's interim order by selling the imported goods. The Supreme Court had specifically ordered that the goods "will not be permitted to be sold until further order of this Court." The petitioners sold the goods to 60 parties, violating this order.

The court noted that the petitioners did not file any affidavit or present any facts to justify their actions. Although the court was satisfied that the petitioners committed contempt of the Supreme Court, it refrained from taking action under the Contempt of Courts Act, 1971, due to uncertainties about the High Court's jurisdiction to punish for contempt of the Supreme Court.

3. Prosecution for Fraud and Cheating the Customs Authorities:
The notice also required the petitioners to show cause why they should not be prosecuted for fraud and cheating the Customs Authorities. The court was prima facie satisfied that the petitioners played fraud upon the Court and cheated the Customs Authorities by securing clearance of the goods based on false declarations and then selling them in violation of the Supreme Court's order.

However, the court decided it was not desirable to direct the institution of prosecution, leaving it to the Customs Authorities to determine whether to launch any prosecution against the firm and its partners.

Conclusion:
The court summarily dismissed the petition, finding no grounds to entertain it under its writ jurisdiction. The notice to show cause why action under the Contempt of Courts Act should not be taken and why the firm and its partners should not be prosecuted was discharged. The petitioners were directed to pay Rs. 2000/- as costs of the present proceedings.

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