1987 (5) TMI 214 - AT - Customs

Summary

Issues Involved:
1. Jurisdiction of the Collector of Customs.
2. Legality of the Show Cause Notices.
3. Fictitious and Antedated Contract.
4. Under-valuation of Goods.
5. Imposition of Penalty on Appellants.
6. Opportunity for Cross-examination.
7. Seizure and Detention of Goods.

Detailed Analysis:

1. Jurisdiction of the Collector of Customs:
The appellants contended that the Collector of Customs had no authority to recall or revise the previous order permitting export, making the interception, seizure, and confiscation of goods illegal. They cited several cases, including Jain Shudh Vanaspati Ltd. v. Union of India, to support their argument. However, the tribunal found that since the goods were not loaded and shipped as per the original shipping bills and were presented again for clearance, the previous clearance became non-est. The authorities had the right to act according to Sections 50 and 51 of the Customs Act, making the seizure and confiscation lawful.

2. Legality of the Show Cause Notices:
The appellants argued that the Show Cause Notices were illegal and without jurisdiction. The tribunal held that the notices were legal and within jurisdiction, as they were issued under Section 113(d) of the Customs Act read with Section 67 of the FERA, 1973. The tribunal cited Section 18(1)(a) of the FERA, 1973, which mandates the declaration of the full export value of goods. The tribunal also referenced the Full Bench decision of the Calcutta High Court in Eurasian Equipments & Chemicals v. Collector of Customs, which supported the applicability of Sections 113 and 114 of the Customs Act in cases of contravention of Section 18(1) of FERA.

3. Fictitious and Antedated Contract:
The tribunal examined the evidence and concluded that Contract No. TCF-1086 was fictitious and antedated. The contract lacked supporting correspondence, and there were erasures in the dates. The tribunal noted that the contract was received at the office of the appellants only on 3rd December 1979, despite being dated 6th July 1979. The tribunal found that the contract was created to declare a lower export value, thus violating Section 18(1) of FERA, 1973.

4. Under-valuation of Goods:
The appellants declared the value of cashew kernels at U.S. $1.90/lb, while the actual selling price was U.S. $2.50/lb. The tribunal found that the appellants failed to declare the full export value as required under Section 18(1) of FERA, 1973. The tribunal relied on telex messages and other evidence showing that the goods were sold at a higher price, confirming the under-valuation.

5. Imposition of Penalty on Appellants:
The tribunal upheld the penalties imposed on the appellants under Section 114 of the Customs Act. The tribunal found that M/s. Raj Mohan Cashews Ltd. and M/s. Janso Exports Pvt. Ltd. were liable as exporters and abettors. The tribunal also found that Shri K. Janardhanan Pillai played a crucial role in the attempted illegal export and was rightly penalized.

6. Opportunity for Cross-examination:
The appellants argued that they were not given an opportunity to cross-examine Shri N. Sasidharan, Assistant Collector of Customs. The tribunal found that the appellants did not state any reasons for the necessity of cross-examination, and six other witnesses were cross-examined. The tribunal cited the Supreme Court decision in Kanungo & Co. v. Collector of Customs, Calcutta, which held that principles of natural justice do not require cross-examination in such matters. The tribunal concluded that there was no violation of natural justice.

7. Seizure and Detention of Goods:
The tribunal found that the goods were intercepted and detained under a reasonable belief that they were liable to confiscation under the Customs Act. The appellants had filed a writ petition in the Kerala High Court, which led to the release of goods on execution of a bond. The tribunal held that the seizure and detention were lawful and in accordance with Section 110 of the Customs Act.

Conclusion:
The tribunal dismissed all three appeals, confirming the legality of the seizure, detention, and penalties imposed on the appellants for under-valuation and attempting to export goods under a fictitious and antedated contract.