1971 (12) TMI 46 - HC - Customs

Issues Involved:
1. Violation of Section 12(1) of the Foreign Exchange Regulation Act, 1947.
2. Application of Section 23-A of the Foreign Exchange Regulation Act, 1947.
3. Confiscation and penalty under Sections 113 and 114 of the Customs Act, 1962.
4. Validity of the declaration under Section 12(1) of the Foreign Exchange Regulation Act, 1947.
5. Misdeclaration of the buyer's name under Section 50(2) of the Customs Act, 1962.

Issue-wise Analysis:

1. Violation of Section 12(1) of the Foreign Exchange Regulation Act, 1947:
The petitioner, a dealer in coir yarn, exported goods to a foreign buyer and filed the necessary shipping bills and declarations under the relevant sections of the Customs Act, 1962 and the Foreign Exchange Regulation Act, 1947. The Assistant Collector of Customs alleged that the petitioner attempted to violate Section 12(1) of the Foreign Exchange Regulation Act, 1947, by misdeclaring the buyer's name to facilitate payment in Indian rupees instead of sterling or other currencies. The court examined whether this act constituted a violation of Section 12(1).

2. Application of Section 23-A of the Foreign Exchange Regulation Act, 1947:
Section 23-A of the Foreign Exchange Regulation Act, 1947, incorporates certain provisions of the Foreign Exchange Regulation Act into Section 11 of the Customs Act, 1962. This section allows the Central Government to prohibit the import or export of goods and imposes penalties for contraventions. The court analyzed the impact of Section 23-A on the case, determining that any violation of Section 12(1) would be treated as a violation under Section 11 of the Customs Act, 1962, leading to confiscation and penalties under Sections 113 and 114.

3. Confiscation and penalty under Sections 113 and 114 of the Customs Act, 1962:
The Collector of Customs found that the consignment was intended for an Italian buyer, despite being declared as sold to a Yugoslavian buyer, to facilitate rupee payment. As a result, the goods were deemed liable for confiscation under Section 113, and a penalty was imposed under Section 114. The petitioner paid the fine and penalty to release the goods. The court evaluated whether the confiscation and penalties were justified based on the alleged contravention of Section 12(1).

4. Validity of the declaration under Section 12(1) of the Foreign Exchange Regulation Act, 1947:
The court examined whether the petitioner's declaration under Section 12(1) was valid. The amended Section 12(1) requires a declaration that is true in all material particulars, including the full export value of the goods. The court noted that the petitioner had filed the required declaration and there was no evidence of underinvoicing or misrepresentation of the goods' value. The court concluded that the declaration was valid and did not constitute a violation of Section 12(1).

5. Misdeclaration of the buyer's name under Section 50(2) of the Customs Act, 1962:
The show cause notice alleged misdeclaration of the buyer's name, which was initially considered a contravention of Section 12(1) of the Foreign Exchange Regulation Act, 1947. However, the court found that the misdeclaration of the buyer's name did not constitute a violation of Section 12(1) and was not pursued further. The court determined that the misdeclaration was irrelevant to the petition.

Conclusion:
The court concluded that there was no contravention of Section 12(1) of the Foreign Exchange Regulation Act, 1947, as the petitioner's declaration was valid and true in all material particulars. Consequently, the confiscation and penalties imposed under Sections 113 and 114 of the Customs Act, 1962, were unjustified. The court quashed the order of the first respondent and disposed of the original petition accordingly.

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