Additional Collector of Customs vs Toolsidas Jewraj

Salil K. Datta, J.—This is an appeal against the judgment and order of Sabyasachi Mukharji J. dated June 9, 1972, whereby the Rule nisi, was made absolute. The facts in short, according to the petition, are as follows: The Petitioner firm has been carrying on business of exporter of jute goods from India to foreign countries including United States. Contracts were entered into by the Petitioner on December 19, 1961, for shipment in January 1962 of jute goods to Messrs Frank Samuel and Co. of New York through their agents Messrs C.J. Dammann Inc., New York, U.S.A. In January 1962, the price of the goods contracted for appreciated considerably and to avoid severe loss, the Petitioner through the said agents arranged for switching the shipment over to April/June 1962. The Petitioner, thereafter, made arrangement for shipment of a consignment of 435 bales of hessian cloth by S.S. ''City of Singapore'' and submitted shipping bills along with G.R.I. forms with the Customs authorities on June 1, 1962. The gain resulting from the sale of January goods in January itself was allowed to the buyers and the profit to them was discounted from the sale price for subsequent shipment and shown accordingly in the shipping bills and G.R.I. forms which was thus not the full export value of goods. On June 5, 1962, as required, Shantimoy Mukherjee, Customs sarhar of the Petitioner and one M.V. Ashar appeared before Krishnamurthy, the Customs Appraiser and supplied to him all information regarding the consignment. The Appraiser, apparently satisfied, dictated to them a letter to be written by the Petitioner firm to the Customs authorities on the basis whereof the consignment would be permitted to be exported. Relying on such representation, the letter as dictated signed by Ashar was delivered to the Appraiser. By that letter of June 5, 1962, the adjustment of price, as aforesaid, was admitted on behalf of the Petitioner and it was further stated that there was no mala fide in the action and further the firm did not want any show-cause memo and would agree to abide by the decision of the Customs. The Petitioner denied that Ashar had any authority on its behalf to waive the issue of show-cause memo, or to agree to abide by the decision of the Customs authorities. Thereafter, they appeared before S.K. Srivastava, Additional Collector of Customs, Calcutta, in short interview when a few questions were put to them. In the meantime, S.S. ''City of Singapore'' left without taking the consignment.

On June 6, 1962, the Addl. Collector of Customs passed order in respect of the said goods, relevant extracts whereof are as follows:

The explanations reveal that a sort of ''Phatka'' business is being carried on by the so-called consignees abroad and that in this business the so-called shippers in India are playing the role of the brokers and in that role they have undertaken to remit to them invisibly the profits earned out of the ''Phatka'' business. The shippers appear to be conscious that they cannot remit the aforesaid profits legally and hence they have chosen to harness into service, the medium of export business in this connection. The F.O.B. values declared by the shippers in the G.R. forms are, on their own admission, incorrect and the object of making these incorrect declarations is unethical and otherwise highly objectionable on more than one ground of economics. In view of the foregoing, I hold that an attempt has been made by Messrs Toolsidas Jewraj to ship the goods covered by the Shipping Bills and the G.R. forms mentioned in the Appendix, without making a declaration that the amount representing the value of the goods has been well within the prescribed, be paid in the prescribed manner. In terms of the notification No. 2(17)-F.I-47 dated 4th August, 1947, as amended, issued u/s 12(1) of the Foreign Exchange Regulation Act, 1947, as amended, the export of the present goods without making the declaration referred to in the previous sentence is prohibited. Accordingly, the shippers in the present case have committed offences attracting the provisions of Section 167(8) of the Sea Customs Act as read with Section 23A and B of the Foreign Exchange Regulation Act, 1947, as amended. The goods in the present case are, therefore, liable to confiscation and the shippers are liable to personal penalty, under the aforesaid Sections and also u/s 167(37) of the Sea Customs Act.

In view of the foregoing order, I confiscate the goods in question u/s 167(8) of the Sea Customs Act, read with Section 23A of the Foreign Exchange Regulation Act. In lieu of confiscation, I impose fine of Rs. 3,00,000 (Rupees three lakhs only). The fine should be paid within a week hereof. A personal penalty of Rs. 50,000 (Rupees fifty thousand only) is also imposed on the shippers u/s 167(8) of the Sea Customs Act. The personal penalty should be paid within three days of the receipt of this order.

The Petitioner preferred an appeal against the said order u/s 188 of the Sea Customs Act, 1878, to the Central Board of Revenue which by its order of December 10, 1963, affirmed the findings and order of the Additional Collector. It was observed therein:

From the foregoing it is evident that the correct reason for the reduction in price was not that the Appellants requested for postponement of the delivery period, but the facts that hypothetical profit, which was in the nature of a speculative gain, was set off from the export value of the goods. It appears that in anticipation that the profits made in the speculative transaction, namely, if the goods were sold in January elsewhere, would not be allowed by the Reserve Bank, the Appellant made deduction of the same from the export value of the goods. Since such a deduction did not have the permission of the Reserve Bank, it was illegal. In any case, it is clear that the value declared in the Shipping Bill and G.R.I. form was not the full export value of the goods and as such, there was clearly a contravention of Section 12(1) of the Foreign Exchange Regulation Act, for which the Appellant was liable to punishment u/s 167(8), Sea Customs Act, by the application of Section 23(A), Foreign Exchange Regulation Act and Section 19 of the Sea Customs Act.

The Board, however, felt that the fine of Rupees three lakhs in lieu of confiscation was rather excessive and accordingly, reduced the fine to Rs. 1-85 lakhs directing the refund of the excess amount of Rs. 1-15 lakhs to the Petitioner which the Petitioner, it is alleged, received without prejudice.

The Petitioner contended that the Respondent No. 2 D.P. Anand, Member of the Central Board of Revenue, committed an error in accepting that M.V. Ashar had the authority to represent the Petitioner firm as its general representative. Further, in passing the impugned orders, the Respondent No. 2, it was contended, wrongly construed that the relevant provisions of the said statute were violated when the exact invoice price the exporter would receive was declared which might not be the full export value of the goods. The Petitioner on these allegations and contentions moved an application under Article 226(1) of the Constitution praying for a writ in the nature of certiorari for quashing the impugned orders dated June 6, 1962 and December 10, 1963 and also for a writ in the nature of mandamus directing the Addl. Collector of Customs, D.P. Anand and the Union of India to refund to the Petitioner the afore-mentioned amount of Rs. 1-85 lakhs as also the sum of Rs. 50,000 imposed as personal penalty.

On this application, a Rule nisi in terms of the prayer was issued by this Court and on behalf of the aforesaid opposite parties to the Rule, an affidavit-in-opposition was affirmed on September 26, 1964, by the said Customs Appraiser Krishnamurthy wherein all allegations made against him as also in regard to the proceedings before the Addl. Collector made in the petition were denied. It was, further stated in para. 7(d) as follows:

7(d)...The correct position is that the contracts were entered into on December 19, 1961, for January 1962 shipment. The contract price was 955 d. for sizes 40-10 oz. On January 11, 1962, the price of the said goods appreciated to 1034 d., i.e. there was difference of 79 d. The price prevailing on January 11, 1962, for shipment in April-June 1962, i.e. the extended period, was 867 d. It appears from the letter dated June 4, 1962, from the Petitioner that if the profit of 79 d. was deducted from the price prevailing on January 11, 1962, for shipment in April-June 1962, the net amount came to 788 d. On this, after adding brokerage commission the value was fixed at 802 d.

(e)...From the foregoing it is evident that the reason for the reduction in price was not that the Petitioner requested for the postponement of the delivery period but the setting off a speculative gain from the export value of goods.

It was specifically denied that the Appraiser was satisfied about the shipment or made any representation or dictated any letter as alleged or the letter of June 5, 1962, was dictated by him. The said letter, it was stated, was written by the Petitioner''s representatives of their own and M.V. Ashar all along represented the Petitioner. The hearing took place before the Addl. Collector where the deponent was present and the Petitioner was aware of the charges as also the offences committed by it as F.O.B. values had been wrongly declared in the Shipping Bills and G.R.I. forms. It was denied that the actions taken by the Customs authorities were wrongful or illegal or that the Petitioner was entitled to the aforesaid sums. Further, there was contravention of Section 12(1) of the Foreign Exchange Regulation Act and the Petitioner was liable to punishment u/s 167(8) of the Customs Act by application of Section 23A of the Foreign Exchange Regulation Act and Section 19 of the Sea Customs Act.

The Petitioner filed an affidavit-in-reply affirmed by its partner Gopaldass Toolsidass on February 4, 1967, wherein the allegations made in the said affidavit-in-opposition were denied and those in the petition were reiterated. It was further stated that the value of the goods in question to be expected in April, May and June 1962, was duly legally and validly arrived at in accordance with the custom and practice of jute trade by allowing suitable discounts for the extended period of shipment.

The learned Judge at the hearing of the Rule proceeded to consider the case on the assumption that the facts stated in the order of the Addl. Collector to the effect that the Petitioner waived its right to receive show-cause notice and M.V. Ashar repeated the request to him for disposal of the case without issuing any show-cause notice. It was held that even according to the Customs authority a declaration was filed u/s 12(1) of the Foreign Exchange Regulation Act 1947, which was incorrect and untrue. Thereby the Petitioner was stated to have committed an offence u/s 167(8) of the Sea Customs Act, 1878, read with Section 23A of the Foreign Exchange Regulation Act, 1947, (before 1969 amendment) and Section 19 of the Sea Customs Act, 1878. The learned Judge relied on the decision in Union of India (UOI) and Others Vs. Rai Bahadur Shreeram Durga Prasad (P) Ltd. and Others, as also other subsequent decision and held that once a declaration, incorrect or untrue, was filed, there was compliance with provisions of Section 12(1) of the Foreign Exchange Regulation Act and the Addl. Collector as also the Board of Revenue had no jurisdiction to pass the impugned orders which were accordingly invalid and without jurisdiction. The Court also overruled the contention of the Customs authority that, having availed of the alternative remedy, the Petitioner could not abandon the same in the midway as the jurisdiction of the Customs authority to pass the impugned order was challenged throughout. It was further held that though the order of the adjudicating authority merged in the appellate order, they were interlinked and the cause of action arose within the jurisdiction of this Court which, accordingly, had the jurisdiction to decide the case. The Rule was, accordingly, made absolute and the impugned orders were quashed and the authorities were, accordingly, directed to refund the amount.

The propriety of this decision has been challenged in this appeal by the Union of India and by the Addl. Collector of Customs.

Mr. G.P. Kar, learned Counsel appearing for the Appellants, contended that the application filed by the Petitioner firm involved consideration of seriously disputed questions of fact relating to the authority of M.V. Ashar to represent the firm, the representation made by the Customs Appraiser and the waiver of the show-cause notice oh behalf of the Petitioner as alleged. These facts, it was submitted, cannot be appropriately tried in a writ proceeding as a decision thereon would involve examination of witnesses in a considerable scale. There can be no dispute over the proposition raised by Mr. Kar, but it is not necessary for us to decide the contention as Mr. R.C. Deb, learned Counsel for the Petitioner firm, the Respondent before us, has rightly pointed out, without admitting the Customs case on facts, that appeal may be decided on the determination of the legel validity of the impugned orders.

We shall now examine the impugned orders in the context of law and judicial decisions relied on by the parties. Section 19 and Section 167, items (8) and (37) of the Customs Act, 1878, are as follows:

Section 10: Power to prohibit or restrict importation and exportation of goods.

Central Government may from time to time, by notification in the Official Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or out of India across any Customs frontier defined by the Central Government.

Section 167: Punishments for offences. The offences mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the same with reference to such offences respectively:

Offences Section of this Act to which Penalties

If any goods, the importation or exportation of which is for the time being prohibited or restricted by or under Chapters 6 18 and 19 of this Act, be imported into or exported from India contrary to such prohibition or restriction, or if any attempt be made so to import or export any such goods. offences have reference Such goods shall be liable to confiscation and any person concerned in any such offence shall be liable to a penalty not exceeding three times the value of the goods of not exceeding one thousand rupees.

Section 23A of the Foreign Exchange Regulation Act, 1947, (prior to amendment of 1969) provided as follows:

Section 23A: Application of Sea Customs Act, 1878. Without prejudice to the provisions of Section 23 or to any other provisions contained in this Act, the restrictions imposed by Sub-sections (1) and (2) of Section 8, Sub-section (1) of Section 12 and Clause (a) of Sub-section (1) of Section 13 shall be deemed to have been imposed u/s 19 of the Sea Customs Act, 1878 and all the provisions of that Act shall have effect, accordingly, except that Section 183 thereof shall have effect as if for the word ''shall'' therein, the word ''may'' were substituted.

Section 12(1) of the Foreign Exchange Regulation Act, which was thus engrafted in the Sea Customs Act, is as follows:

The Central Government may, by notification in Official Gazette, prohibit the taking or sending out by land, sea or air (hereafter in this Section referred to as export) of any goods or class of goods specified in the notification from India directly or indirectly to any place so specified unless a declaration supported by such evidence, as may be prescribed or specified, is furnished by the exporter to the prescribed authority that the amount representing the full export value of the goods has been or will within the prescribed period be paid in the prescribed manner.

The Central Government published the following Notification No. 12(17)-F1/47, dated August 4, 1947, as amended upto April 1, 1970:

In exercise of the powers conferred by Sub-section (1) of Section 12 of the Foreign Exchange Regulation No. 12(14)-F1/47 dated the 25th March, 1947, in the Finance Department, the Central Government with effect from the 19th August, 1947, is pleased to prohibit the export otherwise than by post of any goods, either directly or indirectly, to any place outside India other than any of the countries or territories in the schedule annexed to this order (Nepal, Bhutan) unless a declaration supported by such evidence, as may be prescribed, is furnished by the exporter to the prescribed authority that the amount representing the full export value of the goods has been or will within the prescribed period be paid in the prescribed manner....

In exercise of powers conferred by Section 27 of the Act, the Central Government has made rules known as Foreign Exchange Regulation Rules, 1952 and under Rule 3, the form G.R.I. set out in the First Schedule is the declaration to be furnished by the exporters before shipping commodities from India to territories outside India. The declaration in the said form requires the invoice value declared to be the full export value of the goods and it is the same as that contracted with the buyer or it is a fair valuation of goods which are unsold. Rule 5, Sub-rule (1) provides that the Reserve Bank or the Collector of Customs or the postal authorities, to satisfy themselves of due compliance with Section 12 of the Act and under Sub-rule (2), may require any exporter to produce in support of the declaration such evidence as may be in his possession or power to satisfy them that the invoice value stated in the declaration is the full export value of the goods and such value of the goods has been or will be paid to the exporter.

In the context of these provisions in law, it is to be examined if the Petitioner committed a breach of the provisions of Section 12(1) of the Foreign Exchange Regulation Act. In doing so, we must exclude from our consideration the provisions of Rules framed u/s 27 of aforesaid Act, as was held by the Supreme Court in Becker Gray and Co. (1930) Ltd. and Others Vs. Union of India (UOI) and Another, . We have, therefore, to see if on facts set out in the order of the Addl. Collector of Customs, the Petitioner can be said to have violated the provision of Section 12(1) of the Foreign Exchange Regulation Act and accordingly, liable to be proceeded against u/s 23A of the said Act read with Section 19 and Section 167(8) of the Sea Customs Act, 1878.

In the decision in Union of India and Ors. v. Rai Bahadur Shreeram Durga Prasad Pvt. Ltd. and Ors. Supra, hereinafter referred to as Rai Bahadur''s case, the Court was considering the case of export of manganese ore by the Respondents Therein. Before export, they had filed declaration in prescribed forms wherein they had declared the full export value in prescribed forms and also furnished prescribed evidence. The allegations against them were that they had under-invoiced the goods, failed to repatriate a portion of the foreign exchange earned by them and gave incorrect information in the declarations. It was not disputed before the Court that if the information given by the Respondents in the said declarations was false to the knowledge of those who made those declarations or if they had reasonable cause to believe that it was false or not true in any material particular, then they were liable u/s 23, Foreign Exchange Regulation Act. It was open to the Director of Enforcement to levy on such Respondents as have contravened Section 12(2) penalty not exceeding three times the value of foreign exchange not repatriated which in that case could be about nine crores of rupees.

The Court then proceeded to consider the question whether the allegations came within the scope of Section 23A in which case they would be governed by Sections 19 and 167(8) of the Sea Customs Act, 1878 and the mere fact that the offences were punishable u/s 23 would not exclude the operation of Section 23A which involves contravention of Section 12(1). The Court then observed:

The only restriction placed by Section 12(1) read with the Central Government Notification dated August 4, 1947, is that no one should export any goods from the country without furnishing the declaration mentioned in Section 12(1). Admittedly, the stipulated declarations in the prescribed forms have been furnished. The evidence specified have also been given. Therefore, prima facie there was no contravention of Section 12(1). What is said against the Respondents is 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 declarations which mean that the concerned goods were exported without furnishing the declaration required by Section 12(1). It is not possible to accept this argument. The declarations given do satisfy the requirements of Section 12(1) though, they do not correctly furnish all the information asked for in the form. Such declarations cannot be considered as non est. The information called for in the prescribed form cannot be considered as restrictions imposed by Section 12(1).... For finding out the restrictions imposed by Section 12(1) we have only to look to that section. The requirement of that section is satisfied if the stipulated declaration supported by evidence, prescribed or specified, is furnished.... The declaration required by Section 12(1) is only to the effect that the amount representing the full export value of the goods has been or will within the prescribed period be paid in the prescribed manner.

The Court noticed that the section governs goods sold to foreign buyers as also goods sent on consignment basis. While in case of goods sold it is possible for the exporter to know the exact value, he may not know the position when goods are sent on consignment basis. In case of goods sent on consignment basis, the exporter can only give an estimated value. The Court, accordingly, came to the following conclusion:

If we are to hold that every declaration which does not state accurately the full export value of the goods exported is a contravention of the restrictions imposed by Section 12(1), then all exports on consignment basis must be held to contravene the restrictions imposed by Section 12(1). Admittedly, Section 12(1) governs every export. Again it is hard to believe that Legislature intended that any minor mistake in giving the full export value should be penalised in the manner provided in Section 23A. The wording of Section 12(1) does not support such a conclusion. Such a conclusion does not accord with the purpose of Section 12(1).

The contravention of Section 12(1) in the case under consideration was the Respondents'' failure to repatriate any part of the foreign exchange earned by them by sale of manganese ore exported--it was open to the Director of Enforcement to levy penalty on such of the Respondents as have contravened the said provision. The Court observed:

There are two facts in every export. One relating to the goods exported and the other relating to the foreign exchange earned as a result of the export. Broadly speaking, the former aspect is dealt with by the Customs authorities and the latter either by the Reserve Bank or by the Director of Enforcement.... These provisions go to indicate that, so far as the value of the goods exported is concerned, the matter is left primarily in the hands of the Reserve Bank and the Customs authorities are not burdened with that work. This aspect becomes relevant in ascertaining the true scope of Section 12(1). If we bear in mind the scheme of the Act, it is clear that so far as the'' Customs authorities are concerned, all that they have to see is that no goods are exported without furnishing the declaration prescribed u/s 12(1). Once that stage is passed, the rest of the matter is left in the hands of the Reserve Bank and Director of Enforcement.

It may be noted that in this case the goods had already been exported and the charge was the failure to repatriate a portion of foreign exchange earned by them as also giving declaration which did not comply with Rule 5 of the Foreign Exchange Regulation Rules.

The ratio of the decision appears to be:

(I) The declaration required by Section 12(1) is only to the effect that the amount representing the full export value of the goods has been or will within the prescribed period be paid in the prescribed manner.

(II) Neither Section 12(1) nor any other provision in the Act empower the rule-making authority to add to the restrictions therein imposed and only those restrictions u/s 12(1) are to be looked into in examining if there has been any contravention of the said section.

(III) Minor mistakes in the declaration in respect of full export value of goods to be exported does not constitute a breach of the provisions of Section 12(1) and notifications on basis thereof.

(IV) Bona fide inaccuracies in the estimated full export value of goods in the declaration, inevitable or unavoidable in case of goods sent on consignment basis, do not also constitute breach of the provisions of Section 12(1) and notification on basis thereof.

(V) A bona fide declaration containing such mistakes or unavoidable or inevitable inaccuracies in a sufficient compliance of Section 12(1) and notification on basis thereof.

(VI) Once the goods are exported the matter is left in the hands of Enforcement while the Customs authorities have to see is that no goods are exported without furnishing the declaration prescribed u/s 12(1).

The above decision was followed in the case Becker Gray and Co. (1930) Ltd. Supra where goods which were sent on consignment basis had already left the shores of India. The declaration in form G.R.I. is prescribed by rules u/s 27. In interpreting the above decision, the Court followed the earlier decision which held that under-valuation in a declaration u/s 12(1) does not amount to contravention of the restrictions imposed by that provision which ( must be deemed to be confined to the circumstances noted in the said decision. The Court found that the incorrect information related to points under G.R.I. form on which Section 12(1) does not require a declaration. The Court observed:

Under Section 23A of the Act, only a breach of restrictions imposed by Section 12(1) of the Act is to be deemed in contravention of restrictions imposed by Section 19 of the Sea Customs Act. An incorrect declaration in contravention of the Rules made u/s 27 of the Act is not to be deemed a contravention of any restriction imposed by Section 19 of the Sea Customs Act.

It was held that the imposition of the penalty u/s 167(8) in those cases, accordingly, was totally unjustified.

Strongly relying on these decisions Mr. Deb has contended that making an untrue declaration is not a contravention of the restrictions u/s 12(1) read with Section 23A and once a declaration is filed, proceeding u/s 19 of the Sea Customs Act read with Sections 23A and 12(1) of the Foreign Exchange Regulation Act will be without jurisdiction or authority of law. This, he has submitted, is the declaration of law by the Supreme Court irrespective of whether goods are exported or not and such declaration, which has greater force than precedents, is binding on all Courts in India. He has further submitted that, in view of the aforesaid decisions, Parliament by Amendment Act XL of 1969, in replacement of Ordinance IX of 1969, had to make necessary amendments to Sections 12(1) and 23A of the Foreign Exchange Regulation Act to prevent under-invoicing of goods to be exported abroad. In the objects and reasons of the said amending Act, it was stated as follows:

All along the view held by officers of Customs supported by certain decisions of High Court has been that the Act and the notification imposed upon the exporter an obligation to specify in the declaration the true full export value of the goods and that in the event of his failure to make a true declaration, the prohibition of export imposed by notification would operate. It was thus assumed that if the exporter failed to make a correct declaration of the full export value, it was open to the Customs authorities to seize the goods in respect of which such an erroneous declaration had been made and to take steps for the confiscation of the goods and the imposition of a penalty.

However, in the case of Union of India v. Rai Bahadur Shreeram Durga Prasad Pvt. Ltd. the Supreme Court held that the declaration required by Section 12(1) of the Act is only to the effect that the amount representing the full export value of the goods has been or will, within the prescribed, be paid in the prescribed manner. In the case of mis-declaration of the full export value, it was held by the Court that it was not open to the Customs authorities to take any action against the goods, though the exporter would be liable to be proceeded against u/s 23 of the Act for making a false declaration.... With a view to preventing under-invoicing it was necessary to amend the Act so as to restore to the Customs authorities powers which they believed to possess prior to the aforesaid judgment of the Supreme Court....

The amendment in Section 12(1) provides for declarations be true in all material particulars as to amount representing full export value or when it is not ascertainable at the time of export, the value which the exporters having to prevailing marketing conditions expect to receive on the sale of goods in course of international trade and further affirm that the full export value has been or will be paid within the prescribed period in the prescribed manner. Similarly, by amendment of Section 23A the restrictions imposed by or under, amongst others, Sub-section (1) of Section 12, are to be deemed to have been imposed u/s 11 of the Customs Act, 1962, (which is in parimateria with Section 19 of the Sea Customs Act, 1878, thereby repealed).

These contentions have been disputed by Mr. Kar who submitted that Rai Bahadur''s case Supra did not lay down that even a declaration false to the knowledge of the exporter would be compliance of Section 12(1).

It cannot be said that the interpretation of the proposition of law in respect of a decision of the Supreme Court made by the Government or Parliament is binding on a Court of law and this position has not been disputed by Mr. Deb. On a careful consideration of the decisions cited above, it appears to us that the Supreme Court did not lay down the proposition that any declaration under-valuing the export value of the goods would be sufficient to bring it out of the operation of Section 12(1). Indeed, id would be inconceivable that such proposition of law would be laid down by any Court. Such proposition carried to its logical conclusion would mean that even any declaration grossly under-valuing the goods for export which is again false or false to the knowledge of the exporter will be deemed as compliance of provisions of Section 12(1). What the proposition laid down, as we have already indicated, is that the minor mistakes or bona fide inaccurate valuation which is inevitable or unavoidable when goods are sent on consignment basis, should be relieved of the hardship of the said provisions. There may be other cogent reasons which may prevent declaring an accurate full export value of goods. When, however, there is no difficulty in stating the full export value accurately and an untrue declaration is purposely or deliberately or for some other ulterior reasons made, the provisions of Section 12(1) would be attracted and the Customs authorities would be free to exercise their powers. The Supreme Court decisions do not protect a declaration which is false or false to the knowledge of the exporter in regard to the full export value of the goods to be exported which is a mandatory requisite u/s 12(1) and the notification of August 4, 1947, thereunder, even if we disregard the rules framed u/s 27 and the forms thereunder. The decisions only protected minor mistakes or inaccurate valuation made of goods sent on consignment basis when inaccuracies and not fraudulent undervaluation, are not unnatural or cannot be avoided even when acting bona fide.

Section 12(1) under its terms, as we have seen, requires that a declaration containing full export value of goods to be exported is to be given. When there is a declaration which is not true containing under-valuation of the goods which is neither a minor mistake nor a bona fide inevitable or unavoidable inaccuracy, such declaration cannot be accepted as a declaration under provisions of the said section. Such declaration, accordingly, is not protected by any of the decisions of the Supreme Court referred to above and is to be treated as non est or a false declaration. In either case, there is absolute non-compliance of the provisions of Section 12(1) and accordingly, u/s 23A, such a breach is to be treated as an offence u/s 19 read with Section 167(8) of the Sea Customs Act, 1878.

In the case before us, there is admittedly under-valuation of the goods which was deliberately made and it is not claimed that such mistake was a minor one or inaccurate for the reason that it was not possible to declare the full export value of the said goods. Accordingly, the declaration in the eye of law was either non est or a false declaration in breach of Section 12(1) attracting the provisions of Section 19 read with Section 167(8) of the Sea Customs Act, 1878. Accordingly, we do not find any legal infirmity in the orders impugned in the connected Rule and we hold that the said orders are legal and valid.

Mr. Deb referred to two unreported Bench decisions of this Court in support of his contention. The appeal--Additional Collector of Customs v. Viswanath More Unreported Appeal No. 21 of 1970 dated August 13, 1970, was concerned with a deliberate under-valuation in the Shipping Bills of goods yet to be exported. In this appeal, it was in effect conceded by Customs on the basis of Rai Bahadur''s case Supra that there was no violation of Section 12(1) of the Foreign Exchange Regulation Act as also held in the judgment under the said appeal, so as to attract Section 167(8) which decision, as we have seen, does not warrant such proposition. In Assistant Collector of Customs v. Duncan Brothers and Co. Ltd. Unreported Appeal No. 90 of 1969 dated February 17, 1970 it was found that the Petitioner showed one destination for export of the goods while the actual intention was to export the goods to a different country. It was held that there could be no violation of Section 11 of the Customs Act on its terms without reference to notification thereunder which was not the charge against the exporter. In the earlier case, there was no decision in view of the concession, while in the appeal before us the charge was for the violation of Section 19 read with the relevant notification. Accordingly, the decisions cited above have no application to the present case before us.

Mr. Deb also submitted that the violation of the provisions of the Sea Customs Act, 1878, would be, even accepting the case of the Customs authorities, u/s 167(37), Clause (c), so that action u/s 167(8) is misconceived and unwarranted. Section 167(37) provides for goods entered at or brought to be passed through a Custom House and en tents of such packages are mis-stated in regard to sort, quality, quantity or value. In the present case, it is not the case that any goods were entered at or brought to be passed through the Custom House so that it could be said that the contents of particulars of any package of goods was mis-stated in regard to value or other matters. Section 167(37) has thus no application and no action has been taken under the said provision.

Mr. Kar has contended that the Petitioner, having availed of the alternate remedy, should not be allowed to turn round to invoke the jurisdcition of this Court under Article 226(1) of the Constitution, particularly after taking advantage of an appellate order by way of receipt of a portion of penalty. There is otherwise force in the contention, but in cases where the jurisdiction of the authorities to pass impugned orders is challenged, the alternative remedy should not be a bar to writ proceedings.

There appears to be a serious defect of parties that the Central Board of Revenue, whose order has been challenged, has not been made a party in the connected Rule. The Central Board of Revenue is constituted under the Central Board of Revenue Act and u/s 3 every order made in accordance with the Rules framed by the Central Government for regulating its transaction of businesses to be deemed to be the order of the Central Board of Revenue. The Petitioner, while challenging the order of the Central Board of Revenue, impleaded its erstwhile member D.P. Anand describing him as a member of the Board. It appears that the Board at the material time was constituted with a single member D.P. Anand--even then the impugned order passed by him is to be deemed to be an order of the Central Board of Revenue. There is, accordingly, a defect of party on the face of the petition itself. Mr. Deb submitted that if that was the finding of this Court, the Petitioner would consider the steps to be taken for impleading the Board.

Alternatively, Mr. Deb has submitted that there is no merger of the original order in the appellate order when the original order is a nullity and he relied on the decision in State of U.P. v. Mohammad Noon AIR 1958 S.C. 86. It was held in that case that while the original Tribunal acted wholly without jurisdiction rendering its order a nullity and recourse was bad to its appellate authority which confirmed what ex facie was a nullity, the Court could issue prerogative writ of certiorari to correct the error of the Tribunal of first instance. Accordingly, it was contended that the Central Board of Revenue was not a necessary party.

Mr. Kar made a further submission that the learned trial Judge was in error in directing refund of money which was not permissible in writ proceedings. In contesting the contention, Mr. Deb referred to the decision in Suganmal v. State of Madhya Pradesh in which it was held that a petition solely praying for issue of a writ of mandamus directing the State to refund the money alleged to have been illegally collected as tax is not ordinarily maintainable. Such petition, it appears, would be maintainable where the validity of the order is challenged and the refund is only a consequential relief.

We are, however, relieved of considering these contentions as we have found that the impugned orders are legal and valid. The appeal, accordingly, is allowed. The judgment and order under appeal are set aside and the Rule is discharged. There will be no order for costs.

There will be stay of operation of this order for six weeks as prayed for.

Sankar Prasad Mitra C.J.

I agree.