Delhi High Court
Janak Photo Enterprises (P) Ltd. vs Union Of India on 1 January, 1800
Equivalent citations: 1990(49)ELT339(DEL)
ORDER
1. The petitioner has filed this writ petition seeking a direction to quash the show cause notice dated 27/29.6.1989 issued by the third respondent, Assistant Collector (Exports), New Delhi. It was alleged that the petitioner imported certain quantity of photographic films (colour) `Konica' which were lying in Customs Bonded Warehouse, C.W.C., Okhla, and that these goods had been imported from Japan under Open General license (OGL) for home consumption and could not be re- exported to any country and that the petitioner attempted to export the same to Singapore which was in violation of the Export (Control) Order, 1977, as amended.
2. During the pendency of this petition, an adjudication order was made by the Additional Collector of Customs which is dated 19.7.1989. By this order the goods were ordered to be confiscated under S. 113(d) of the Customs Act, 1962 (for short `the Act') but the petitioner exporter was allowed to clear the goods for export on payment of redemption fine amounting to Rs. 4,50,000.00 and on payment of appropriate customs duty for ex-bond clearance. Personal penalty for Rs. 50,000/- in respect of each of the shipping bills totaling Rs. 1,50,000.00 was also imposed under S. 114 of the Act. There are three shipping bills.
3. Thereafter, the petitioner sought to amend his petition to challenge this order which is, of course, appealable under the Act. Mr.Aggarwal submitted that this order was principally based on a letter dated 25.5.1989 received from the Chief Controller of Imports & Exports (CCI & E) wherein he said that goods imported under OGL were for home consumption and should not be allowed to be re-exported. Mr.Aggarwal said this clarification given by the CCI & E was law and as such the goods in question would become prohibited goods export of which could not be allowed. It was brought to our notice by Mr.Lahoty that similar goods had been allowed to be re-exported by the Bombay Customs without payment of duty and in support of this contention he filed various shipping bills showing "Foreign Produce to be Re- exported". Last such shipping bill is of September 1989. We gave various opportunities to Mr.Aggarwal to find out as to how the Bombay Customs were allowing re- export of the goods in question without payment of duty. He expressed his inability to throw any light on this as he said that he was unable to get any information or instructions from the Department.
4. S. 3(33) of the Act defines prohibited goods which mean "any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with". The goods in question were stored on import in a warehouse pending clearance. Under S. 46 of the Act, the importer of any goods, other than goods intended for transit or transhipment, shall make entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form. It is not disputed that in the present case, a bill of entry for warehousing in the form prescribed was filed (Ss. 46 and 49). Then, under S. 51 of the Act, where the proper officer is satisfied that any goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed thereon and any charges payable under the Act in respect of the same, the proper officer may make an order permitting clearance and loading of the goods for exportation. Under sub-s.(1) of S. 69, any warehoused goods may be exported to a place outside India without payment of import duty if -
"(a) a shipping bill or a bill of export has been presented in respect of such goods in the prescribed form;
(b) the export duty,penalties,rent,interest and other charges payable in respect of such goods have been paid; and
(c) an order for clearance of such goods for exportation has been made by the proper officer."
5. The goods in question, being the photographic films (colour), fall under App.6,List 8,Part II,Serial No.41 of the Import and Export Policy, 1988-91, and their import is allowed by all persons for actual use/stock and sale. The contention of Mr.Aggarwal is that since the goods were imported for stock and sale, these could not be re- exported. We are unable to agree with the condition of Mr.Aggarwal or with the view taken by the respondents. Again, to us, the goods do not appear to be prohibited goods. We may usefully refer to Para 4 of Section I, dealing with Export Control, in Import and Export Policy, 1988-91, Vol.II,in respect of Export Control and Procedures, which is as follows :-
"Only item included in Schedule I to the Exports (Control) Order, 1988 are under control. No such item can be exported unless it is covered by a valid license issued by a licensing authority competent to grant an export license for that item. Goods which are not included in this Schedule can be shipped without any export license unless their export is controlled under any other law for the time being in force."
Thus, the Export (Control) Order, 1988 is not applicable to photographic film (colour).
6. If reference is made to S. 74 of the Act, it appears that when any goods capable of being easily identified which have been imported into India upon which any duty has been paid on importation, are to be re- exported and the goods are not prohibited goods, then clearance for exportation can be given by the proper officer (S. 51) and on such exportation 98% of the duty paid on importation is to be re-paid as drawback. We have not been shown which are those goods which can thus be re-exported and where import duty already paid is to be claimed as drawback. We have also not been shown any provision of law stating that the goods which have been imported could be sold only in the country itself. The clarification given by the CCI & E does not appear to be appropriate. We may also note that under S. 18 of the Foreign Exchange Regulation Act, 1973 and various other provisions thereof, there are sufficient safeguards to see that proper sale price on export of goods is realized. It is not the case of the respondents that there is dearth of photographic film (colour) in the country, and export of the goods in question would certainly result in earning of some foreign exchange for the country.
7. Mr.Aggarwal said that we should safeguard the respondents in case it is ordered that the goods be allowed to be re-exported. Mr.Lahoty has filed affidavits of Mr.Anil Malhotra and Mrs.Janak Malhotra respectively Managing Director and Director of the petitioner, to the effect that they are owners of property bearing No.13-A/25, WEA, Karol Bagh, New Delhi, and that they would not dispose of,alienate or otherwise create any charge on this property without the leave of the court and during the pendency of this writ petition and further that this property shall remain subject to charge of this court and in case the petitioner ultimately loses, this property could be used to secure the interests of the respondents. Mr.Lahoty has stated that both Mr.Anil Malhotra and Mrs.Janak Malhotra give undertaking to this property could be taken as security for payment of any amount of duty or other charges which may be found due to the respondents in the present writ petition. We accept this undertaking. Both Mr.Anil Malhotra and Mrs.Janak Malhotra shall remain bound by what they have stated in their respective affidavits. Mr.Aggarwal did say that a bank guarantee should be asked for, but in the circumstances of the present case we do not think that to be a proper course. Accordingly, we direct that the petitioner will be allowed to re-export the goods in question without payment of any duty and, of course, subject to the provisions of sub-s.(1) of S. 69 of the Act which have been noted above.
8. We would like to add that the view which we have taken above is only a prima facie view and is subject to final determination in the petition. All the CMs stand disposed of.