1986 (5) TMI 164 - HC - Central Excise

Summary

Issues Involved:
1. Validity of the Notification issued by the Chief Controller of Imports & Exports.
2. Competence of the Chief Controller of Imports & Exports to act on behalf of the Central Government.
3. Specification of goods under Section 3 of the Imports & Exports (Control) Act, 1947.
4. Procedural validity of the show-cause notice and subsequent actions by the Customs Authorities.

Issue-wise Detailed Analysis:

1. Validity of the Notification issued by the Chief Controller of Imports & Exports:
The case revolves around the Notification No. IPC (Genl. 44)/65 issued by the Ministry of Commerce, which prohibited the import and export of all goods to and from Rhodesia. The respondent, engaged in the export of jute goods, was served a show-cause notice for attempting to export goods to Rhodesia, allegedly in violation of the said notification. The respondent challenged the validity of the notification, arguing that it was issued by the Chief Controller of Imports & Exports, who was not competent to impose such a prohibition.

2. Competence of the Chief Controller of Imports & Exports to act on behalf of the Central Government:
The respondent contended that the Chief Controller of Imports & Exports was not authorized to act on behalf of the Central Government under Section 3 of the Imports & Exports (Control) Act, 1947. The appellants argued that the notification was valid as it was issued in the name of the Central Government, which, under Section 3(8) of the General Clauses Act, 1979, means the President. The court noted the ambiguity regarding whether the Chief Controller was merely authenticating an order passed by the Central Government or acting independently. The court did not express an opinion on this point, as it was not necessary for the final decision.

3. Specification of goods under Section 3 of the Imports & Exports (Control) Act, 1947:
The core issue was whether the notification's prohibition of "all goods" was valid under Section 3 of the Act, which requires the Central Government to specify the description of goods whose import or export is prohibited. The court held that the prohibition on all goods without specifying their description was not permissible under Section 3. The section empowers the Central Government to prohibit the import and export of goods of specified descriptions, and the lack of such specification rendered the prohibition invalid. The court referred to the principles laid down in Karl Ettlinger & Co. v. Chagandas & Co., where it was held that the goods must be specifically described to impose a valid prohibition.

4. Procedural validity of the show-cause notice and subsequent actions by the Customs Authorities:
The respondent argued that the show-cause notice was arbitrary, illegal, and without jurisdiction. The Customs Authorities contended that the application was premature as only a show-cause notice had been issued, and the legality of the transaction was yet to be adjudicated. The court found that the Customs Act, 1962, provided remedies by way of appeal or revision against orders passed under the Act, and the respondent had not exhausted these alternative remedies. However, the court ultimately quashed the show-cause notice on the grounds of the invalidity of the underlying notification.

Conclusion:
The court affirmed the judgment of the trial court, which had quashed the show-cause notice and restrained the appellants from proceeding under it. The appeal was dismissed, and the court held that the prohibition on the export of all goods to Rhodesia without specifying the goods was invalid under Section 3 of the Imports & Exports (Control) Act, 1947. The court did not grant a certificate for appeal to the Supreme Court, as the case was decided on well-settled principles of statutory construction.