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TMI Blog1977 (9) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... . 12(1) shall be deemed to have been imposed under S. 11 of the Customs Act and all the provisions of that Act shall have effect accordingly. It is by virtue of this provision in the Foreign Exchange Regulation Act that a show cause notice was issued to the writ petitioners relying on Ss. 113 (d) and (i) read with S. 50 of the Customs Act, 1962, asking them to explain why the goods, which were sought to be exported, should not be confiscated and why penalty should not be imposed on them applying Ss. 113 and 114 of the Customs Act. It is at this stage necessary to extract S.12(1) of the Foreign Exchange Regulation Act, 1947, as amended-- 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 or class of 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 materials particulars which, among others, shall include the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conclusion that the real contract of export was between the exporter and Messrs. Bevington and Sons, Ltd., and not between the exporter and the German firm, Zentral Kommerz. The Collector of Customs also, as a consequence of his understanding, came to the conclusion that the mode of payment for the goods exported were to be in Sterling and not to be in Indian rupee. Therefore, the Collector of Customs had no difficulty in holding that the declaration that had been made, as envisaged by S. 12(1) and the affirmation that had been made under S.50(2) were not true. Palaniswami, J. has dealt with the matter in detail in the judgment referred to by Ramaprasada Rao, J. in the judgment under appeal in these cases, and it is not necessary to state all the grounds mentioned therein. We would, however, like to emphasise certain aspects which we consider are the salient features of this type of cases. 4. The first aspect we would like to point out is that it is the violation of S.12(1) of the Foreign Exchange Regulation Act that may be penalised by applying the provisions of the Customs Act, and not the violation of any of the rules framed or any direction issued under any of the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on contained in S.12(1) of the Act . 6. The Supreme Court referring to this conclusion reached by the Division Bench observed-- On the fa cts and in the circumstances of this case we are constrained to hold that even after the statement in Column 2 of Form G.R.I. that the country of destination of goods was Italy the statement in column 5 that the payment was to be received in India in Indian Rupee was not untrue. However, the appeal was dismissed, and the decision of the Division Bench of the High Court was upheld on the ground that had he, the exporter, made a declaration, then, he would certainly have violated S. 12(1) of the Act by giving such a declaration, and the omission to give a declaration (there was no declaration) was also a violation of S.12(1) 7. Here, on the facts of the documents that have been filed by the exporter, there is nothing to indicate that there is any violation of S.12(1).The exporters had stated that the destination of the goods was a company in G.D.R. and the payment was to be made in rupees for which credit facilities would be provided to the agents of Messrs. Bevington and Sons, Ltd., in India. The Collector of Customs went behind the face value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n entered into between the exporters and the German firm. We think, with great respect, the learned Judge Palaniswami, J. in giving importance to the opening of the Letters of Credit and the contract between the exporter and the German firm, proceeded on right lines, and it was on that basis that the learned Judge came to the conclusion that there was nothing to indicate that the statement made in the documents filed by the exporters were untrue. The learned Judge also observed that there was no material to indicate, assuming that the documents said to have been recovered from the agents, Messrs. Simson and McConechy, Ltd. indicated that there was some underhand dealing between Simson and McConechy and Messrs. Bevington and Sons, on which aspect the learned Judge did not reach any conclusion but only assumed that the conclusion of the Collector was correct, because the question did not arise before the learned Judge, was the writ petitions before the Judge were all by the exporters--that the exporters knew about it and had thereafter made any false declarations. It was pointed out that the same information that must be taken to have been available to the agents, Messrs Simson and M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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