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TMI Blog1957 (2) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... d Fixtures come within this category, and that the Officer empowered in 1948 to issue special license in respect thereof was the Chief Controller of Imports, New Delhi. The Defence of India Rules were continued by the Emergency Provisions (Continuance) Ordinance, No, XX of 1946. The Imports and Exports (Control) Act 1947 (XVIII/47) came into operation on the 24-3-1947. Sections 3, 4 and 5 of this Act are of great importance and must be set out: Powers to prohibit or restrict imports and exports- (1) The Central Government may. by order published in the Official Gazette, make provision for prohibiting, restricting or otherwise controlling, in all cases or in specified classed of cases, and subject to such exceptions, if any, as may be made by or under the Order-- (a) The import, export, carriage coastwise or In shipment of ship stores of goods of any specified description: (b) The bringing into any port or place in (India) of goods of any specified description intended to be taken out of (India) without being removed from the ship or conveyance in which they are being carried. (2) All goods to which any order under (1) applies shall be deemed to be goods of which the impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stamp. On or about 26-7-1948 an order was made by the Government of India, being notification No. 1(13)-ITC/47(i). There is a dispute as to whether this order was made under Section 3(1) of the Imports and Exports (Control) Act, but for reasons which I shall state hereinafter, I am satisfied that it is such an order. It is stated in the notification that the exchange position in respect of sterling and soft currency countries had become easier and restrictions on imports of certain goods from these countries had been removed. It was further stated that the foreign exchange position in respect of dollar and hard currency areas continued to require a close watch. It then proceeded to prescribe a new form of application. The relevant provisions of the notification are set out below: 7. Form of application -- A new form of application has been drawn up in appendix III. Application for import license in July/December, 1948 should be made in this form and all the information: required should be accurately furnished. Any application which is not made in the proper form or which does not furnish all the relevant information, required by this form is liable to be summarily rejected. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forward sale or sale on commission Purposes of which goods required:-- (no). (b) For stock and sale to retailers, manufacturers or consumers -- (no). (c) For retail sales, for agency or ... -(no). (d) For own use as industrial raw material or accessories for manufacture of -- (for own use). (e) For any other purpose (specify details) --(no). The application itself shows that the authorities considered this as a consumer's application, and this fact appears from an endorsement made on the top of the form dated 5th October 1948. The application was for 20,000 Flourescent Tubes and 2,000 Fixtures of the value of one hundred thousand dollars. On the 8th October 1948, the Chief Controller of Imports, New Delhi, issued a special Licence to the petitioner company, a copy whereof is annexed to the petition and marked 'A'. The 'Licence' shows that it is in respect of Flourescent Tubes and Fixtures of the approximate value of CIF ₹ 3,33,333 (equivalent of 100.000 dollars). It is stated that the 'Licence' was granted under Government of India Ministry of Commerce notification number 23-ITC/43 dated 1st July 1943, and was without prejudice to the obligation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Chief Presidency Magistrate, by order dated 12th January 1951, issued process on the said complaint against the petitioner No. 2 and another person of the name of Manick Chand Lohia. THE case was numbered C-120/51. THE said two cases (C-120/51 and C-121/51) were tried by Sri G. Kumar, Presidency Magistrate, Calcutta, who by his judgment dated 28th June discharged the accused under Section 253 of the Code of Criminal Procedure. In the opinion of the learned Magistrate there was no sufficient evidence to make out a prima facie case for convicting the accused of the offences with which they were charged and he therefore discharged them under Section 253 of the Code of Criminal Procedure. Against the said order of discharge, the State as well as the Assistant Collector of Customs, made applications in revision before the High Court in its Criminal Revisional Jurisdiction, being Criminal Revision Cases Nos. 935 and 936 of 1951. It appears that by an order dated 28th March 1952, the orders of discharge were set aside and there was a remand. On the 9th June 1952, the petitioner filed an application before the trying Magistrate for an order for release of the goods, stating that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 5 of the Import and Export (Control) Act. Criminal Revision Case No. 1124/53 was heard and decided by a Division Bench of this Court and by a judgment delivered by Sen., J., dated 3rd March 1955, the Rule was discharged. Great reliance has been placed on this judgment and it would be necessary to see how far it is of assistance in this case. I shall deal with it presently. On the 24th March 1955, the petitioner No. 2 on behalf of petitioner No. 1 filed an application before the learned Presidency Magistrate, Calcutta, inter alia for making over the sale proceeds to them. This application stood adjourned from time to time and on the 7th May 1955, an application was made by the Assistant Collector of Customs asking for further adjournment, stating that it had been decided to initiate adjudication proceedings under the Sea Customs Act against the petitioner and the sum of money in question. Upon this application, the matter was further adjourned and on the 9th May 1955, the petitioner No. 2 moved an application under Section 439 read with Sections 517, 520 and 561 of the Cede of Criminal Procedure, before the High Court in its Criminal Revisional Jurisdiction. There was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... still lying with the Presidency Magistrate. (5) Mr . Sen on behalf of the petitioners advanced the following argument. He pointed out that the respondents proposed to confiscate the goods under the provisions of the Sea Customs Act. But as stated above, the Sea Customs Act comes into operation because of Section 3 of the Imports and Exports (Control) Act, which in its turn attracts the orders made under the Defence of India Rules. We have, therefore, to start from the prohibition contained in Notification No. 23-I. T. C./43 dated July 1, 1943, and read this with Section 3 (1) of the Imports and Exports (Control) Act. Under the last mentioned provision, the condition precedent for imposing a prohibition is for the Central Government to make an order published in the official gazette. There is no doubt that Notification No. 23-I.T.C./43 must be deemed to be such an order. This notification or order lays down that the electrical goods we are concerned with in this case, cannot be imported except under a special licence. Therefore, if it is imported without a special licence that would be a contravention of the order. The goods have been imported under a special Licence, In fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Judge pointed out that Notification No. 2-I.T.C./48 does not directly impose any duty put it gives power to the licensing officer to impose certain conditions. But contravention of such condition imposed by the licensing officer cannot, prima facie be regarded as contravention of the notified order itself. The learned Judge further pointed out that there might have been some substance in this argument if Clause (xiii) of Notification No. 23-I.T.C./43 had contained a term like 'under the terms or conditions of the 'Licence''. He pointed out that the difficulty had apparently been realized in Pakistan and, therefore, the Act was first amended by an Ordinance and then by the Imports and Exports (Control) Act, 1950, of Pakistan. I am told that there has been a similar amendment now in India as well. The learned Judge concluded as follows:- It is not possible to hold that the licensee by merely committing breach of the condition imposed by a 'Licence' has committed the offence which consists in contravention of an order made or deemed to be made under this Act. In this view, therefore, ... it is clear that the prosecution of the opposite party under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds had been sold by order of court the confiscation would attach to the equivalent monetary value. Although the above reasons for confiscation were stated, there is a paragraph of a general nature which is as follows:- 6. They are also called upon to explain within the abovementioned Period why the money should not be confiscated under Section 167(8) of the Sea Customs Act read with Section 3(2) of the Imports and Exports (Control) Act, 1947, as amended, and also why penal action should not be taken against them under, the aforementioned section. Mr. Sen argues that the position is exactly similar to that which came for decision in Criminal Revision Case No. 1124 of 1953, and that for the reasons stated by Sen J. this notice also should be quashed. Mr. Sen next says that the Sea Customs Act is attracted by Section 3 (2) of the Imports and Exports (Control) Act but Section 3(2) says that all goods to which any order under Sub-section (1) applies shall be deemed to be goods of which the import or export has been prohibited by the Sea Customs Act. The order in question viz., Notification No. 23-I.T.C./43 was not an order under Section 3(1) of the Imports and Exports (Cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uts an emphasis on a complete disclosure as to whether the applicant was an actual user or not. In fact, the applicant, in filling up the form, has to categorically state as to whether he was making any importation for his own purpose or for any other purpose. In paragraph 8 of the order which has already been quoted above, it has been clearly stated that in the case of articles sublet to overall monetary limits, applications from actual consumers of goods will receive consideration. Since there was a controversy as to Whether this notification was meant to be an order under Section 3(1) of the Imports and Exports (Control) Act, I directed that an affidavit should be filed stating as to whether it was so or not. An affidavit has now been filed by one Syed Naqi Belgrami dated 26-7-1956. Mr. Belgrami is a joint Secretary of the Government of India under the Ministry of Commerce. He says that he is well acquainted with the various notifications that were and are issued from time to time under the Imports and Exports (Control) Act, 1947 as extended and amended from time to time. He states on oath, confirming it to be true to his knowledge, that Notification No. 1/13-I.T.C. /47(i) publi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that it has a reference to order No. 23-I.T.C./43 because the original prohibition is contained therein, in fact, the Appendix to this new order shows that it follows the same serials as the Appendix to the original order, and declares the new policies to be followed in respect of the same. It prescribes a new form of application. It lays down a new policy. The. position therefore, appears to me to be clear that the original prohibition is contained in order No. 23-I.T.C/43. This is amended from time to time and order No. 1(13)-I.T.C/47(i) is an amendment of that order. It is quite obvious why the original order had to be amended from time to time. The export and import of goods depend on various factors, one of which is the exchange position in respect of sterling in soft currency countries. This varies from time to time, requiring changes in policy. At one time the exports and imports may be liberalised whereas at others there may be stringent restrictions. It depends on economic, political and various other factors. There is nothing in the statement of Mr. Kamath and Mr. Salvey to show that this is not an order made by the Central Government under Section 3(1) and it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laid on the covering letter which said that it was 'primarily' so intended. I have to reject this contention. The covering letter Stems to have been cleverly used in order to leave some elbow room, but the authorities when granting the application did so upon the application made in the prescribed form and not upon the covering letter. As I have already pointed out, there is an endorsement on the top of the form that it was an application for consumer's own use. It is clear that the License was granted on that footing. The question, therefore, is as to what was the Lie, rise that was granted. In other words, was it a License'' in respect of goods answering the description, intended for any kind of use, or was it a License confined to flourescent tubes and fixtures which the petitioner company required for its own use in its factory viz., Sri Krishna Jute Mills at Ellore. Mr. Ben argues that for this purpose it is permissible only to look at the License and nothing else. He argues that the License shows that it was a ''License in respect of flourescent tubes and flourescent fixtures consigned from the United States of America of the approximat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner company had imported goods for which the special License was not issued, which is another way of saying that the goods were imported without being covered by a special License. Let us take an extreme cases. The company stated that it required the goods for its factory at Ellora and a License was issued upon that tooting and it would not have been granted under any other footing. Supposing at the time of the application, or the issue of the License, it did not possess any factory at all. Could it be said that the goods imported had conformed to the License' ? In my opinion, it would not. (8) Let us now come to the investigation that is proposed to be held, by the notice given cy the Collector of Customs dated 28-5-1955. I cannot say that the notice has been framed happily. First of all, it does not refer in terms to order No 1(3) I.T.C./47 (i) but to notification No. 23 I.T.C/43 dated 1-7-1943. as amended . However, as I have mentioned above, this last mentioned order is in reality an amendment of the original order. Therefore, I do not see why technically speaking it is not covered. It is apparent that the notice complained, of a violation of the conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) The allegation that goods of the description imported were being sold by a company called the Bengal Electrical Co. Ltd. which is stated to be a bogus company carrying on the sale of the goods in this name, on behalf of the petitioners. (iv) That the petitioner company applied only for 20.000 tubes but imported nearly five times that number, whereas it is stated that the Mill belonging to the petitioner company did not even have scope for the use of 20,000 tubes, not to speak of about a lac. (v) The learned Presidency Magistrate himself said that on the facts, the importation of tubes and fixtures of the value of 100,000 dollars was an absurd figure for the company as an actual user. It may be necessary to investigate as to the actual capacity of the petitioners' factory at Ellore, at the time of the export. In my opinion, on the facts of this case the petitioners have not successfully made out any ground why I should interfere at this stage. It will be for them to establish to the satisfaction of the respondents that the importation of the goods was in fact made according to law. If they are successful in showing this, to the authorities concerned, they may not proceed an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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