Amin Chand Payare Lal vs C.T.A. Pillay, Collector of Customs and Others

M.L. Pendse, J.—By this petition filed under Article 226 of the Constitution of India, the petitioners arc challenging legality of concurrent findings of fact recorded by the three authorities below while exercising powers u/s 111(d) of the Customs Act, 1962 read with Section 3(2) of the Imports and Exports (Control) Act, 1947. The facts giving rise to passing of the impugned orders arc as follows.

The petitioners secured import licence dated August 8, 1961 for import of Hot Rolled Steel Sheets and the value of the licence was about Rs. 44 lakhs. The petitioners booked an order dated November 16, 1961 for import of rolled steel sheets c.i.f. value of Rs. 55,261/-. The import licence specifically provided that the import would be valid provided the imported goods cross the Hungarian border on or before February 28, 1962, but after August 8, 1961. The goods imported by the petitioners reached Indian territory on June 11, 1963. The Customs Authorities thereupon found that the clearance of the goods could not be under a valid licence and the goods were imported in contravention of the licence issued u/s 3 of the Imports and Exports (Control) Act, 1947. The petitioners were thereupon served with show cause notice to explain why the goods should not be confiscated and penalty should not be levied. The Collector of Customs after examining the reply filed by the petitioners came to the conclusion by order dated February 10, 1965 that the claim of the importer that the goods crossed Hungarian border before February 28, 1962 is entirely false and as the import was in violation of the import licence the goods arc liable to be confiscated. On the strength of this finding the Collector directed confiscation of the goods, but gave an option to the petitioners to pay a fine of Rs. 28,000/- in lieu of confiscation and clear the goods for home consumption. The Collector also imposed a penalty of Rs. 28,000/- u/s 112 of the Customs Act.

2A. The Petitioners preferred an appeal before the Central Board of Excise and Customs, New Delhi, but the appeal was dismissed by the Board by order dated October 11, 1968. The petitioners carried revision before the Government of India, Ministry of Finance, but the same also ended in dismissal by order dated November 24, 1969. All the three authorities concurrently found that the reliance by the importer on the cross-border certificate was not justified as the document was of dubious validity. All the three authorities also found that the evidence relied upon by the Department to establish that the goods had not crossed the Hungarian border before February 28, 1962 is substantial and valid. The findings of fact recorded by the three authorities below arc under challenge.

Shri Gandhi, learned Counsel appearing on behalf of the petitioner, submitted that the three authorities were in error in discarding cross-border certificate relied upon by the importer. The learned Counsel urged that the proceedings for confiscation and levy of penalty being of quasi-criminal nature, the burden was heavy upon the Department to establish that the imported goods had not crossed Hungarian border before the cut-of date. It was urged that the evidence relied upon by the Department was insufficient to arrive at such conclusion. It is not possible to accede to the submission of the learned Counsel for more than one reason. In the first. instance the findings recorded by the three authorities below are pure findings of fact based on appreciation of evidence and it is not permissible to disturb those findings in exercise of jurisdiction under Article 226 of the Constitution of India. Secondly, even on merits we find that the conclusions reached by the three authorities are perfectly justified. The three authorities pointed out that the cross border certificate relied upon by the importer is of dubious validity. The importer had informed the suppliers M/s Metalimpex, Budapest that the material should cross Hungarian border on or before February 28, 1962. In March 1962 the importer addressed a letter to the suppliers enquiring about the despatch of the goods and in answer to that letter the suppliers addressed letter dated February 28, 1982. In this letter there is no mention whatsoever to the existence of the cross border certificate or to the fact that the goods had already crossed the Hungarian border. In these circumstances the authorities below very rightly observed that the cross border certificate saw the light of the day at a very late stage and though several opportunities were given to the importer to establish the genuineness of the same, the importer took no steps. The Department relied upon the letter dated February 27, 1964 addressed by M/s Morska Agencja to M/s India Steamship Co. Ltd. Bombay. The letter is addressed by the shippers and unmistakably recites that the entire consignment had been despatched from Budapest on February 13, 1963 by five railway wagons. The letter not only gives the date of despatch of the goods from Budapest and date of arrival at Port Stallin, but also gives the number of wagons, the number of bundles brought by the wagons and the number of sheets with their weight contained in each bundle. These particulars are also shown in the Bill of Lading. The reliance by the three authorities on this letter clearly establishes that the goods were imported in violation of the conditions in the import licence.

3A. Shri Gandhi submitted that the authorities were in error in relying upon this letter because the letter was not signed by the person who wrote the contents thereof. The submission has no merit, because the original letter addressed by M/s Morska Agencja was not received by M/s Indian Steamship Co. and therefore a copy of the original letter was sent under a covering letter which is duly signed. In these circumstances it is futile to suggest that copy could not have been relied upon by the authorities below. The authorities also pointed out that several opportunities were given to the importer to establish that the contents of the letter are not correct, but the importer failed to avail of the opportunity. In our judgment, the findings recorded by the authorities below in these circumstances cannot be faulted with and the order of confiscation is just and proper.

Shri Gandhi then submitted that the authorities were in error in imposing a penalty of Rs. 5,000/- on the importers. The Collector and the Central Board had imposed penalty of Rs. 28,000/- which is equivalent to the value of the imported goods. The penalty was reduced to Rs. 5,000/- by Government of India while exercising revisional jurisdiction. Shri Gandhi submitted that penalty should not have been imposed because the importer had not violated the conditions of import licence intentionally. We are unable to find any merit in the submission. The fact that the importer produced cross border certificate of a dubious nature is itself sufficient to indicate that the importer had mens rea while importing the goods in violation of the terms of the licence. We are not inclined to interfere with the discretion exercised by the revisional authorities in imposing penalty of Rs. 5,0001-. In our judgment, there is no merit whatsoever in the petition and the same is required to be dismissed.

Accordingly, rule is discharged with costs.