1993 (6) TMI 93 - HC - Customs

Summary

Issues Involved:
1. Legality of the Customs Authorities' actions.
2. Alleged violation of Section 18(1)(a) of the Foreign Exchange Regulation Act (FERA).
3. Application of Section 67 of FERA and Section 11 of the Customs Act.
4. Applicability of Section 113(d) of the Customs Act.
5. Eligibility for International Price Reimbursement Scheme (IPRS).

Summary:

1. Legality of the Customs Authorities' Actions:
The respondent-writ petitioner, Lexus Export Private Ltd., challenged the actions of the Customs Authorities, which included seizing goods, raiding various premises, and freezing bank accounts. The Customs Authorities' actions were deemed high-handed and arbitrary, and an injunction was sought to restrain these actions. The Court initially granted an injunction, allowing the release of goods for export in accordance with the law, and restrained the Customs Authorities from obstructing the export business or freezing bank accounts.

2. Alleged Violation of Section 18(1)(a) of FERA:
The Customs Authorities argued that by incorrectly declaring non-stainless steel rods as stainless steel rods, the respondent-writ petitioner violated Section 18(1)(a) of FERA, leading to a deemed violation of Section 11 of the Customs Act. However, the Court found no violation of Section 18(1)(a) of FERA, as the declaration mentioned more than the full export value of the goods, which is not prohibited under FERA. The Court emphasized that FERA is concerned with the regulation of foreign exchange and not the goods themselves.

3. Application of Section 67 of FERA and Section 11 of the Customs Act:
Section 67 of FERA deems restrictions imposed by Section 18(1)(a) of FERA as restrictions under Section 11 of the Customs Act. Since there was no violation of Section 18(1)(a) of FERA, there was no violation of Section 11 of the Customs Act. The Court noted that Section 11 of the Customs Act does not provide for a total prohibition on export once the full export value is mentioned.

4. Applicability of Section 113(d) of the Customs Act:
Section 113(d) of the Customs Act pertains to the confiscation of goods attempted to be improperly exported. The Court found no prohibition under the Customs Act or FERA that would justify the confiscation of the goods in question. The goods were neither dutiable nor prohibited, and incorrect particulars in the declaration did not attract the provisions of the Customs Act.

5. Eligibility for International Price Reimbursement Scheme (IPRS):
The Customs Authorities alleged that the incorrect declaration was made to benefit from the IPRS. The Court found no basis for this allegation, as obtaining reimbursement under IPRS requires fulfilling several conditions, including test certificates and other documentation. The respondent-writ petitioner had previously fulfilled these conditions for other claims. The Court concluded that the respondent-writ petitioner could not have obtained IPRS reimbursement based on the incorrect declaration.

Conclusion:
The appeal by the Customs Authorities was dismissed, and the respondent-writ petitioner was allowed to export the goods. The Court vacated all interim orders and stated that the respondent-writ petitioner would be entitled to IPRS benefits upon fulfilling all conditions.