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TMI Blog2006 (10) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... - M/s. Ganesh Yarntex Export Private Limited filed six shipping bills under the Duty Entitlement Pass Book Scheme (DEPB Scheme) bearing Nos. 136 to 141 dated 6-1-2001. M/s. Aadee Exports & Imports, Secunderabad filed five shipping bills bearing Nos. 142 to 147 dated 6-1-2001. They declared their address as 'c/o ABC, II Floor, YMCA Complex, Sardar Patel Road, Secunderabad. All the said shipping bills were filed for post-export benefit under the DEPB Scheme claiming credit rate @ 15% vide Sl.No. 20(iii) of the DEPB Credit List, Product Group No. 89 read with EXIM Policy. The goods were declared as "Dyed Printed Night Wears (Maxis)" in various sizes/colours. The value of the goods was claimed to be ₹ 41 lakhs @ US $ 6.40 per piece. The total FOB value of the consignment was declared to be US $ 5,84,064 (₹ 2.72 crores) approximately. The consignment was made in the name of M/s. Reemj Al Maha Trading Est., Dubai, UAE. 2. It was allegedly found that cheap garments were being exported by grossly misdeclaring the description and heavily over-invoicing the value under the said Scheme by the aforementioned two firms. The goods were intercepted at Chennai. Upon exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of redemption fine of ₹ 5,00,000/- (Rs. Five lakhs only). The option to redeem the goods should be exercised within one month from the date of receipt of this order. (4) In terms of Section 114(i) of the Customs Act, 1962, I impose penalties on Noticees as follows: (a) Mr. Suresh Jhunjhunwala ₹ 40,00,000/- (Rs. Forty lakhs only); (b) Mr. Deepak Jhunjhunwala ₹ 30,00,000/- (Rs. Thirty lakhs only); (c) Mr. Sachin Jhunjhunwala ₹ 25,00,000/- (Rs. Twenty-five lakhs only) (e) C. Satyyapal Reddy ₹ 5,00,000/- (Rs. Five lakhs only);" 5. While arriving at the said findings, the Commissioner relied upon the statements of various witnesses and other documents. The materials relied upon by him to determine acquisition, financial dealings, the low quality of the garments and the intent to obtain undue benefit of DEPB Credit Facility fraudulently were said to be based on physical examination of goods, statements of suppliers, customs house agents, staff employed by Respondents and Respondents themselves. It was found that Respondents have committed a fraud. 6. He, therefore, directed confiscation of the goods in terms of Section 113 of the Customs Act. An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions subject to which the goods are permitted to be imported or exported have been complied with." 11. Section 50 of the Act provides for entry of goods in the following terms: "50. Entry of goods for exportation. - (1) The exporter of any goods shall make entry thereof by presenting to the proper officer in the case of goods to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a bill of export in the prescribed form. (2) The exporter of any goods, while presenting a shipping bill or bill of export, shall at the foot thereof make and subscribe to a declaration as to the truth of its contents." 12. Section 113 of the Act refers to confiscation of goods in certain circumstances, clause (d) whereof reads as under: "(d) any goods attempted to be exported or brought within the limits of any customs area for the purpose of being exported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force;" 13. The definition of prohibited goods is a broad one. The said provision not only brings within its sweep an import or export of goods which is subject to any proh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ordinarily sold or offered for sale at the place of exportation in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for sale. No doubt, Section 14 would be applicable for determining the value of the goods for the purpose of tariff or duty of customs chargeable on the goods. In addition, by reference it is to be resorted to and applied for determining the export value of the goods as provided under sub-section (41) of Section 2. This is independent of any question of assessability of the goods sought to be exported to duty. Hence, for finding out whether the export value is truly stated in the shipping bill, even if no duty is leviable, it can be referred to for determining the true export value of the goods sought to be exported." 18. The ingredients of the aforementioned provision read with Section 18 of the Foreign Exchange Regulation Act were analyzed and the law was laid down stating: "(a) The exporter has to declare the full export value of the goods (sale consideration for the goods exported). (b) The exporter has to affirm that the full export value of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above provisions is punishable under Section 23. Hence the respondents' failure to repatriate any part of the foreign exchange earned by them by the sale of the manganese ore exported can be penalised by imposing on them a penalty not exceeding three times the value of the foreign exchange in respect of which the contravention had taken place or ₹ 5000 - whichever is more as may be adjudged by the Director of Enforcement in the manner provided in the Act. Hence it is open to the Director of Enforcement to levy on such of the respondents as have contravened Section 12(2), penalty not exceeding three times the value of the foreign exchange not repatriated which in the present case can be about nine crores of rupees. They may also be punished under Section 23(1)(6). This position is conceded by the counsel appearing for the appellants. But it is urged on behalf of the appellants that for the offences committed by the respondents they are not only liable to be punished under Section 23 but also under Section 23(A). The Appellate Bench of the Madras High Court negatived that contention. Section 23(A) as it stood at the relevant time provided that - "without prejudice to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well on Interpretation of Statutes, 11th Edn., p. 116). If the exporter makes a deliberately false declaration he contravenes Section 12(1) because he has not made the statutory declaration in good faith. It is not necessary to say that the declaration becomes a nullity because the breach of good faith, a condition pre-requisite, is itself a contravention of the conditional prohibition or restriction, within Section 167(8) of the Sea Customs Act, read with Section 23-A and Section 12(1) of the Exchange Act. Clerical mistakes and mistakes made bona fide even in respect of material particulars are not within the mischief of Section 12(1), but a deliberate falsehood and a deliberate evasion of the provisions of Section 12(1) come within Section 12(1). Otherwise the ambit of Section 12(1), read with Section 23-A, would be narrowed to the point of extinction. An exporter and persons concerned in the export could with impunity give a deliberately false declaration but in apparent compliance with Section 12(1), and deprive this country of foreign exchange. I cannot give an interpretation which will make a mockery of the section. But it is said that other sections of the Exchange Act will ..... X X X X Extracts X X X X X X X X Extracts X X X X
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