9911796707
TMI Blog1989 (3) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... ia and abroad. The petitioner also acts as commission agents of foreign principals and is also an exporter of teas. The teas grown in various parts of West Bengal and Assam are sold in auctions in Calcutta by the Tea Auctioners like J. Thomas & Co. Private Ltd. and Caritt Moran & Co. Private Ltd. conducted under the auspices of the Calcutta Tea Traders Association. A show-cause notice was issued, which is Annexure J to the petition. The show-cause notice states as follows:-- "No. S5-(Gr. IV-10/75E Dated 30-4-75 From: Asstt Collector of Customs, for Export Custom House, Calcutta. To: M/s. A. Tosh & Sons Pvt. Ltd. P-32 & 33 Indian Exchange Place, Calcutta. Sub: Misdeclaration of value contravention of the provisions of Customs Act, 62 & FERA, 1973 -- Notice to Show Cause. M/s. A. Tosh & Sons submitted a shipping bill which serially numbered 2723 on 11-4-75 for shipment of 20 chests containing 876.6 Kg. of tea to M/s. Paul Schrader & Co., West Germany under a telegram dated 4-4-75 in lieu of contract. The telegram shows the contract prices quoted by the foreign buyer for sample Nos. 26 and 42 @ ₹ 50 per kg. and for sample No. 45 @ ₹ 60 per kg. But the exporter c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the foreign buyer i.e. the so-called bid price and not the price quoted by them in the shipping bill. They were warned to be careful in future. Being aggrieved by the said order the petitioner preferred an appeal and by the appellate order dated 28th May 1975 the Assistant Collector of Customs set aside the original adjudication order and remanded back the case. Thereafter the matter was heard again and a fresh order of adjudication was passed. After setting out the background of this case the Assistant Collector of Customs for Export I passed the following orders:-- "The adjudication of the case was accordingly reopened de novo. In the de novo proceedings, the exporter's advocate Shri N. C. Sen prayed in his letter dated 28-5-75 for adjudication of the case without issue of a further show cause memo. Since I also found that the show cause Memo No. S5(Gr. IV)-10/75E dated 30-4-75 issued by previous Asstt. Collector of Customs for Export-I in this case the framing of charges, was correctly done, I agreed to the submission made in the advocate's prayer for not issuing a show cause memo again. However, a personal hearing was granted to the Advocate Shri N, C. Sen an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess to buy goods at an agreed price. It is examined for satisfaction of the assessing officer for the purpose that price declared in the shipping bill is correct as per buyers' agreement which is deemed to be the maximum bargain price of the goods mentioned therein. Foreign buyers offer price of any goods, if it reasonably covers the domestic value of the goods plus exporter's profit and cost of charges for shipment, and if that price is fairly competitive in relation to offers made for the said goods by other buyers in that buying country or the quoted price is in conformity with the prevailing market condition in the said country such price is considered to be the full export value of the goods as envisaged under Section 18(1)(a) of the FERA 1973, In this context, a Custom House assessing officer is not much meticulously concerned as to whether a contract produced in the Custom House is correct according to the tacit implications of the law of contract or not. He is only to be aware of the buyers' expression of mind regarding his accepted price and other relevant terms which affects customs formalities and rules which a Customs Officer has to administer in the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at prices offered by foreign buyer in their telegram dated 4-4-75 received in Calcutta on 5-4-75 and not at the prices declared in the invoice and the S/Bill. The exporters, M/s. A. Tosh & Sons Pvt. Ltd. are cautioned to be careful in future. Sd/- Asstt. Collector of Customs for Export (I) Copy forwarded to M/s. A. Tosh & Sons Pvt. Ltd. for information. Sd/- Assistant Collector of Customs for Export (I)." 3. Being aggrieved by the said order this application under Article 226 has been made. Upon such application being made on the 12th June 1975 this rule nisi was issued. Mr. B. C. Dutt, learned Advocate for the petitioner has made the following submissions. He has submitted firstly that the Assistant Collector of Customs has come to an erroneous conclusion. There has been no undervaluing in the present case. The bid rate could not be treated as contract rate and that the telegram merely specified the bid rate. That was not the contract made between the parties. Accordingly the bid rate could not be treated as export value within the meaning of the Act. In this connection he has reiterated the facts and contentions made on behalf of his client in the petition and also be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereby Section 12 of the 1948 Act was substituted by introduction of the following provisions. This was later replaced by an amending Act. 12 (1). The Central Government may, by notification in the Official Gazette, prohibit the taking or sending out by land, sea or air (hereinafter in this section referred to as export) of all goods or of any goods specified in the notification from India directly or indirectly to any place so specified unless the exporter furnishes to the prescribed authority a declaration in the prescribed form supported by such evidence as may be prescribed or so specified and true in all material particulars which, among others, shall include the amount representing-- (i) the full export value of the goods or (ii) if the full export value of the goods is not ascertainable at the time of export the value which the exporter, having regard to the prevailing market conditions, expects to receive on the sale of the goods in the course of international trade, and affirms in the said declaration that the full export value of the goods (whether ascertainable at the time of export or not) has been, or will within the prescribed period be, paid in the prescribed mann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt of the application, communicate to the exporter that permission applied for has been refused, it shall be presumed that the Reserve Bank has granted such permission. Explanation-- In computing the period of twenty days for the purposes of the second proviso, the period, if any, taken by the Reserve Bank for giving an opportunity to the exporter for making a representation under the first proviso shall be excluded." 7. I shall take up the first contention of Mr. Dutt first. The whole question is what is the export value of the goods. In order to ascertain the export value of the goods the adjudicating officer has relied on various facts. He has relied on the rate specified in the telegram. He has not accepted the same to be the bid price. For the reasons given therein the price quoted by the telegram has been considered by him to be the full export value of the goods. Mr. Dutt has contended that the said decision is erroneous in the facts of this case. He has submitted that the petitioner acted as an agent of the foreign buyers and the bid price was only the ceiling price at which the petitioner was authorised to purchase the goods in question for the purpose of the expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was pointed out in the majority of the decisions of the Supreme Court that there was no such violation. The Supreme Court pointed out that the only question that arose for decision in those appeals was whether on the facts set out in the show cause notices, which facts have to be assumed to be correct for the purpose of the proceedings, the respondents can be held to have contravened Section 12 (1) as it then stood. The Supreme Court pointed out that admittedly the stipulated declarations in the prescribed forms have been furnished. The evidence specified has also been given. Therefore prima facie there was no contravention of Section 12 (1). It was pointed out that what was said against the respondents was that the invoice price mentioned by them in the declarations did not represent the full export value; hence the declarations given by them are invalid declaration which means that the concerned goods were exported without furnishing the declaration required by Section 12 (1). The Supreme Court held that it was not possible to accept this argument. It was held that the declarations given do satisfy the requirements of Section 12 (1) though they do not correctly furnish all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the declaration must be true and correct in all respects. After the amendment and particularly after the 1973 Act came into force, under which the present show-cause notice has been issued, once it is held that the particulars given in the declaration are not true or correct in all respects immediately Section 18 is attracted and there is a violation of the said Act. In the present case the finding of the adjudicating officer is to the effect that there has been under-invoicing. It automatically attracts the provisions of Section 18 because in that event the declaration furnished was not true in all respects and accordingly it must be held that there has been a breach of Section 18 of the Act. I have already held for the reasons given above that the finding of the adjudicating officer to that effect cannot be challenged and accordingly if that is so then there is such a violation of Section 18 in view of the language of the present Act, and I cannot hold that the authority has acted without jurisdiction. In my opinion the Madras decision relied upon by Mr. Dutt does not make any change. The facts are quite different. In the facts of that case the High Court came to the conclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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