9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
1976 (3) TMI 59 - SC - CustomsWhether there was no violation of Section 12(1) of the Foreign Exchange Regulation Act ? Held that - Although the statement in the declaration that the value of the goods mentioned in column 4 at ₹ 63,301.50 was to be received in India in Indian rupees for the export of goods to Italy was not untrue, the affirmation, if made, would have been either false or contrary to the requirement of the law. If in the affirmation the appellant had stated that for the value of the goods exported to Italy it was to receive the payment in Indian rupees through the Chartered Bank Ltd., Cochin as per the declaration, then the affirmation would have violated Section 12(1) as it would not have been on affirmation stating that the export value would be paid in the prescribed manner. Absence of affirmation in the declaration furnished by the appellant is tantamount to failure on the part of the appellant to comply with the requirement of the law engrafted in Section 12(1) of the Foreign Exchange Regulation Act. That being so, the decision of the Division Bench of the High Court that the appellant had attempted to export goods in violation of the restrictions imposed under Section 12(1) of the Foreign Exchange Regulation Act is fit to be upheld, but on a different basis. on the facts and in the circumstances of this case we feel persuaded to reduce the amount of penalty imposed upon the appellant from ₹ 25,000/- to ₹ 15,000/-. The direction as to the payment of ₹ 5,000/- in lieu of confiscation of the goods is upheld. Since the law engrafted in the amended Section 12(1) of the Foreign Exchange Regulation Act was not very clear either to the Custom Authorities or to the High Court resulting in the recording of the findings against the petitioner on a wrong basis, although not affecting the substance of the view that the appellant had violated Section 12(1) of the Foreign Exchange Regulation Act, we have thought it fit to reduce the quantum of penalty by ₹ 10,000/-.
Issues Involved:
1. Interpretation of Section 12(1) of the Foreign Exchange Regulation Act, 1947. 2. Compliance with Section 50 of the Customs Act, 1962. 3. Violation of Rule 7 of the Foreign Exchange Regulation Rules, 1952. 4. Validity of the Additional Collector's order of confiscation and penalty. 5. Application of Section 23A of the Foreign Exchange Regulation Act. 6. Quantum of penalty imposed. Issue-wise Detailed Analysis: 1. Interpretation of Section 12(1) of the Foreign Exchange Regulation Act, 1947: The central issue revolved around the interpretation of Section 12(1) as amended by Act 40 of 1969. The appellant was required to furnish a declaration in the prescribed form (Form G.R. 1) that was true in all material particulars, including the export value of the goods. The Court emphasized that the declaration must be supported by evidence and affirm that the full export value of the goods would be paid in the prescribed manner. The Court noted that the affirmation was not required to be in a prescribed form but must be included in the declaration. 2. Compliance with Section 50 of the Customs Act, 1962: The Customs Authority found discrepancies in the shipping bill and G.R. 1 Form, indicating that the goods were intended for export to Italy while the payment was to be received in rupees. This discrepancy was against Section 50 of the Customs Act. The declaration of the buyer's name as "M/s. Ferolektro, Sarajavo, Yugoslavia" while the actual destination was Italy, raised questions about the accuracy of the declaration. 3. Violation of Rule 7 of the Foreign Exchange Regulation Rules, 1952: Rule 7 mandated that the full value of goods exported to certain countries, including Italy, must be paid through an authorized dealer and in the manner specified in the Second Schedule. The appellant's declaration that payment would be received in Indian rupees was contrary to this rule, as Italy was listed under "Convertible Account Countries" requiring payment in convertible currency or specific methods. 4. Validity of the Additional Collector's order of confiscation and penalty: The Additional Collector held that the appellant misdeclared material particulars regarding the manner of payment, violating Section 12(1) of the Foreign Exchange Regulation Act and Section 11 of the Customs Act. Consequently, the goods were liable for confiscation under Section 113(d) and 113(i) of the Customs Act, and a penalty was imposed under Section 114. The High Court initially quashed this order, but the Division Bench later upheld it, leading to the present appeal. 5. Application of Section 23A of the Foreign Exchange Regulation Act: Section 23A deemed the restrictions imposed under Section 12(1) of the Foreign Exchange Regulation Act to be prohibitions under Section 11 of the Customs Act. This meant that any attempt to export goods contrary to these restrictions would result in confiscation under Section 113(d) of the Customs Act, and penalties under Section 114. 6. Quantum of penalty imposed: The Court acknowledged that the law under the amended Section 12(1) was not clear to the Customs Authorities or the High Court, contributing to the confusion. While the Court upheld the finding of violation, it reduced the penalty from Rs. 25,000/- to Rs. 15,000/- due to the ambiguity in the law. The direction to pay Rs. 5,000/- in lieu of confiscation was upheld. Conclusion: The appeal was dismissed, but the penalty was reduced. The Court highlighted the importance of clear legal provisions in economic offences and emphasized the need for accurate declarations in compliance with the Foreign Exchange Regulation Act and Customs Act. The judgment clarified the interpretation of Section 12(1) and its implications for exporters.
|
