2004 (9) TMI 113 - SC - Customs

Whether order of detention correct? Held that - By chemical analysis of materials, it was found that the samples were made up of alloy steel. It has not been disputed before us that the alleged goods which are subject matter of the export were seized in presence of the detenu and were sent for chemical analysis before CRCL. Upon obtaining a report dated 23-10-2003, it appears, that the samples were made up of alloy steel although the test report could not throw any light as to whether the goods were alloy steel forging (machined), as declared by the exporter. The subject matter of the consignment, therefore, was not scrap metal. Had the detaining authority waited for the results of the said chemical analysis before issuing the impugned order of detention, the first ground stated therein could not have been made a basis therefor. Thus the order of detention, therefore, in our considered opinion, was passed in haste without there being adequate materials. Thus the impugned orders of detention cannot be sustained which are set aside accordingly. These appeals are allowed

Summary

Issues:
1. Validity of the order of detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.
2. Allegations of misdeclaration and over-invoicing in the export consignment.
3. Retraction of self-inculpatory statements by the detenu.
4. Approval of detention orders by the Central Advisory Board.
5. Grounds for challenging the order of detention before the Punjab and Haryana High Court.
6. Contentions raised by the Appellant's counsel.
7. Support for the order of detention by the Respondents' counsel.
8. Analysis of the show cause notice and chemical analysis report.
9. Impact of relevant documents on the order of detention.
10. Revocation of detention order against one of the accused.
11. Surrender of 'exporter importer code' and its legal implications.

Detailed Analysis:

1. The judgment deals with the validity of the order of detention issued under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974. The detention was based on allegations of misdeclaration and over-invoicing in the export consignment, leading to legal challenges regarding the sufficiency of grounds for detention.

2. The detenu's self-inculpatory statements formed a crucial part of the detention order but were retracted later. The court examined the impact of these statements on the legality of the detention and their admissibility as evidence.

3. The approval of detention orders by the Central Advisory Board raised questions about the consistency and reasoning behind the approval process, especially when one of the accused had their detention order revoked.

4. The legal battle extended to the Punjab and Haryana High Court, where the detention orders were challenged, leading to an appeal before the Supreme Court for a comprehensive review of the case.

5. The Appellant's counsel raised several contentions, including non-application of mind by the detaining authority, lack of relevant documents in the decision-making process, and the impact of the surrender of the 'exporter importer code' on future illegal activities.

6. On the other hand, the Respondents' counsel supported the order of detention, presenting arguments in favor of upholding the detention based on the available evidence and legal provisions.

7. The court meticulously analyzed the show cause notice and the chemical analysis report to determine the accuracy of the allegations regarding misdeclaration and over-invoicing in the export consignment, highlighting discrepancies in the grounds for detention.

8. The presence of relevant documents, such as those related to duty drawback cash incentive schemes, was deemed essential for a lawful detention order, emphasizing the importance of complete and accurate information in such cases.

9. The judgment emphasized the need for coherence and relevance in the grounds for detention, stating that the presence of irrelevant or insufficient material could render the entire detention order invalid in the eyes of the law.

10. Ultimately, the court concluded that the impugned orders of detention lacked the necessary legal basis and were set aside, allowing the appeals with specific observations and no costs imposed, thereby resolving the legal dispute in favor of the Appellant.