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TMI Blog1971 (2) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... hing to do with the sale to the foreign buyers but as mentioned hereinbefore, I do not decide this question in this application. It has been further alleged by the petitioner that the petitioner used to get the contracts with the said Reliance Commercial Corporation, Bombay, registered with the Export Contract Registration Committee. On the 4th May, 1967, the petitioner presented four shipping bills along with the declaration under Section 12(1) of the Foreign Exchange Regulation Act, 1947, for the purpose of effecting shipment of goods to Yugoslavia for and on account of the said Reliance Commercial Corporation. Bombay. On the 26th July. 1967, the petitioner presented three shipping bills for effecting shipment of goods for and on account of the said Reliance Commercial Corporation, Bombay, to Yugoslavia along with the declarations under Section 12 (1) of the Foreign Exchange Regulation Act, 1947. The values declared in the said shipping bills and declarations under Section 12 (1) of the Foreign Exchange Regulation Act, 1947, were on the basis of the values mentioned in the contracts of the petitioner with the Reliance Commercial Corporation, Bombay. That is an admitted position. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e so entitled under the law without prejudice to any of the petitioners' rights and contentions in the matter. Thereafter it appears that on the 10th July, 1970, another show cause notice was issued. It is this show cause notice which is the subject-matter of the challenge in this application under Article 226 of the Constitution, 2. By the said notice dated 10th July. 1970, it has been alleged that the F.O.B, Values declared on the shipping bills were on the basis of the sale contracts entered between the two firms, viz., the petitioner and the Reliance Commercial Corporation, Bombay. It has been further alleged that the F.O.B. price declared in the shipping bills were not the actual sale prices at which the goods were sold to the foreign buyers. It has been stated that the F.O.B. values should have been on the basis of the sale contracts entered between the Reliance Commercial Corporation and M/s. Jugotaksil Impex, Yugoslavia, the foreign buyer. It has been further stated that the goods sought to be exported under shipping bills appeared to have been misdeclared in respect of material particulars and value and thereby an attempt had been made to export the goods without de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this question it will be necessary to refer to the relevant statutory provision. Section 2(14) defines dutiable goods as follows;-- 'dutiable goods' means any goods which are chargeable to duty and on which duty has not been paid. Section 2(33) provides the definition of prohibited goods. 'Prohibited goods' meant any goods the import or export of which was subject to any prohibition under the Act or any other law for the time being in force but did not include any such goods in respect of which the conditions subject to which the goods were permitted to be imported or exported had been complied with. It may be mentioned here that it is the common case that the goods in question were not prohibited goods. Section 2(41) defines value by stating 'value' in relation to any goods means the value thereof determined in accordance with the provisions of Sub-section (1) of Section 14 of the Act. Section 12 of the Act which is in Chapter V of the Act dealing with levy of and exemption from customs duties provides as follows: Section 12 -- Dutiable goods:-- (1) Except as otherwise provided in this Act, or any other law for the time being in force, duti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted, etc.,--The following export goods shall be liable to confiscation:-- (i) any dutiable or prohibited goods which do not correspond in any material particular with the entry made under this Act or in the case of baggage with the declaration made under Section 77, ............ Section 114(ii) provides penalty for attempt to export goods improperly, etc. ---Any person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 113, or abets the doing or omission of such an act. shall be liable,-- (i) ... ... ... ... ... ... ... ... (ii) in the case of dutiable goods, other than prohibited goods, to a penalty not exceeding five times the duty sought to be evaded on such goods or one thousand rupees, whichever is greater; (iii) ... ... ... ... . ... ... ... Section 117 deals with imposition of penalties for contravention of the Act not expressly mentioned and provides that any person who contravenes any prohibition of the Act or abets any such contravention and who fails to comply with the provision of the Act which was his duty to comply with, where no expressed penalty is else ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislature. Mr. Mitter drew my attention to Maxwell's Interpretation of Statutes 1969 Edition, p. 232 and to several decisions, viz. The King v. Governor of Brixton Prison (1937) 1 KB 305 at p. 313, J. W. Dwyer v. Metropolitan District Receiver (1967) 2 QB 970, Attorney-General for New Zealand v. Brown, AIR 1917 PC 133 Mazagaon v. I. T. E. P. T. Commr., [1958]34ITR368(SC) and S. Krishna v. State of Madras, [1951]2SCR621 . On the basis of the aforesaid decisions and the authorities Mr. Mitter contended that the Court had the power in a proper case to construe the expression 'and' as 'or' and vice versa. In so far as the legal proposition, contended by Mr. Mitter is concerned it is correct. The Court undoubtedly has the power, if reading the Act as a whole the Court comes to the conclusion that such a construction should be made to avoid either absurdity or to avoid defeating the clear intention of the legislature. It has been pointed out by the Supreme Court in the case of Manmohan Das Shah v. Bishan Das, [1967]1SCR836 that the ordinary rule of construction was that a provision of a statute should be construed in accordance with the language used therein unles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his contention also. Section 12 does not define dutiable goods. Section 12 only provides how the duties will be levied in respect of the dutiable goods. For indicating that in the marginal note of Section 12, the expression dutiable goods have been I mentioned. Section 12 is not an additional definition of dutiable goods to Section 2(14) of the Act, Mr. Bajoria further contended that in case of a possible doubt this being in a penal section, it should be resolved in favour of citizen and such a construction should be made which would be favourable to the citizen. Mr. Baioria referred me to certain decisions of the Supreme Court in support of this proposition. In the view I have taken it is not necessary for me to discuss this question in any greater detail. I am of the opinion that the contentions raised on behalf of the respondents cannot be accepted on the question of dutiable goods and it must be held that the goods in question, in the facts and circumstances of this case, were not dutiable and as such Section 113(i) would not be attracted to this case. 6. The next question is whether even assuming, the value which has been declared to be incorrect, is it such an incorrec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) of the Customs Act, 1962. On this ground also I am of the opinion that this notice is liable to be quashed. 7. The next contention of Mr. Baioria was that his client was under no obligation to declare the value of the goods on the basis of the price to be paid by the foreign buyer. Mr. Bajoria referred me to Section 14(a) of the Act and to the definition of the value. In this connection reference was made to the definition of F.O.B. value in the Export Trade of Schmitthoff (4th Edition) at page 17. It is not necessary for me and I do not intend to decide whether the petitioner was at all under any obligation to declare the value at which the goods were ultimately purchased by the foreign buyer. 8. The last contention that was urged was that Section 114(ii) could not be attracted in this case, because in order to impose penalty it should be either a penalty not exceeding five times of the duty sought to be evaded on such goods or ₹ 1,000/-, whichever was greater. Now in this case no duty was going to be evaded, that is the admitted position. Therefore, whether ₹ 1,000/- or any other sum was greater or less than the duty sought to be evaded cannot be found out. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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