Madras High Court
Cannon Steels Pvt. Ltd. And Anr. vs Union Of India (Uoi) And Ors. on 15 September, 1992
Equivalent citations: 1993(41)ECC161
ORDER Srinivasan, J.
1. The main writ petition is taken up with the consent of parties and heard.
2. The first petitioner is a private limited company and the second petitioner is a shareholder and director of the said company. The petitioners are manufacturers of dying equipments and have their factory at Kup District, Sangrur (Punjab). They are using stainless steel for the manufacture of their products and as it is cheaper, they buy seconds and detectives rather than prime stainless steel for use in their factory. They placed an order with Flotec Co., Ltd., Taiwan for the supply of 60 M.T. of seconds/defective stainless steel seamless tubes/pipes. The suppliers despatched a quantity of 58.808 M.T. on board the ship Stamfort V-41W. The agreed price was $ 1170 per Metric Tonne. As per the invoice dated 14.5.1992, the petitioners were charged with 68,805.36 U.S. $. The goods arrived on board the feeder ship Tiger Bridge on 30.5.1992 due to transhipment, under cover of bill of lading No. 5319134 dated 14.5.1992. The petitioners filed a bill of entry on 29.5.1992. An order was passed on 1.6.1992 for inspection of the cargo and on 5.6.1992 there was an inspection. There was a reinspection on 8.6.1992 with the help of a Metallurgical expert. According to the petitioners, a detailed reexamination was carried out on 19.6.1992 and on 26.6.1992, the Additional Collector passed an order for assessment on the value declared in the bill of entry and release of goods, which was approved by the Collector. It is stated by the petitioners that the matter was referred to SIB in the Customs Department on 1.7.1992 as the matter was being delayed, the petitioners wrote to the Collector on 15.7.1992 requesting for early release of the consignment. It is stated that there is no reply to the said letter. It is also stated that the SIB inspected the cargo on the instructions of the Collector and returned the bill of entry on 18.7.1992 after it was thoroughly satisfied. According to the petitioners, the Collector directed that the shipment be assessed and cleared accepting the invoice value, on 22.7.1992 and thus the assessment was completed. It is alleged in the affidavit that some disgruntled persons in the Department, who did not want the goods to be released, made a complaint to the Directorate of Revenue Intelligence, the fourth respondent herein, who entered the scene on 22.7.1992 and collected the bill of entry from the Customs Department. There was an examination by the fourth respondent on 27.7.1992 in the presence of the Additional Director and a further examination on 1.8.1992 and 3.8.1992 along with metallurgical experts. The affidavit of the petitioners proceeds to state as follows:-The assessment having been completed under Section 17 of the Customs Act, it has become final and the fourth respondent has no jurisdiction to override the decision of the Collector, the Additional Collector or the Assistant Collector and the Customs Department is an independent Department not subject to the jurisdiction or authority of the fourth respondent. The fourth respondent is exercising its powers mala fide. There is no dispute about the validity of the imports as prime as well as defective stainless steel could be imported. Nor is there any dispute about the rate of duty payable. The only apparent doubt in the mind of the fourth respondent appears to relate to the correctness of the value declared. Unless the fourth respondent has reason to believe that goods are liable for confiscation and any documents are required in respect of such proceedings, it has no jurisdiction to seize the documents from the Customs Department and in this case, there has been a seizure of the documents without any seizure memo. Hence, the fourth respondent had acted without any jurisdiction and its action is mala fide in law. The goods are not of prima quality and they are not bought from one particular manufacturer. They are collected from various suppliers, being seconds/detectives, as various manufacturers have rejected them. The fourth respondent is only causing harassment to the petitioners by preventing the release of goods. The goods are urgently required by the petitioners and they are suffering heavy demurrage. The action of the fourth respondent is arbitrary and capricious. The Customs Department is the only authority which has to take a decision and it has already taken a decision. The fourth respondent cannot interfere with the same. Generally, goods will be released on the basis of provisional assessment even if investigation is gong on and that procedure has not been adopted in this case. Hence, the petitioners are obliged to approach this Court with a prayer for issue of a writ of mandamus directing respondents 2 to 4 to release the goods, viz., seconds/defective stainless steel seamless tubes, pipes weighing 58.808 M.T. covered by bill of entry No. 18444 dated 29.5.1992 to the petitioner.
3. The first respondent is the Union of India represented by the Secretary, Ministry of Finance, New Delhi, the second respondent is the Collector of Customs and the third respondent is the Assistant Collector. The fourth respondent is the Directorate of Revenue Intelligence, Zonal Unit, Madras. Respondents 2 and 3 have filed a counter-affidavit. The following is pleaded in the said counter-affidavit: The goods were loaded in containers and they were not destuffed at the time of inspection on 5.6.1992 and 8.6.1992. But, the inspection was carried out by checking the materials available to view when the container was opened. On the basis of the opinion of the A.O. Metallurgical Expert, the Additional Collector opined with the approval of the Collector that the value as declared in the bill of entry could be accepted and accordingly the bill of entry was assessed by the Appraiser/Assistant Commissioner (sic) concerned. But, before further steps for clearance were taken out and issuance of the said bill of entry to the petitioners, the fourth respondent informed the third respondent that an investigation was being conducted in the matter by them and they would require the bill of entry and connected documents for the said investigation. The contention of the petitioners that there was a completed assessment, which had become final, is not correct. Completion of assessment involves various stages. Even after a decision as to assessment is taken, concurrent audit, licence audit, working out of quantum of duty and entering the same on the bill of entry are necessary before returning the bill of entry to the parties for the purpose of payment of duty. Even if the duty is paid, the goods cannot be released unless an order is passed by the competent Officer under Section 47 of the Customs Act. Even if it is assumed that there is a completed assessment, it is not a bar in law to reopen the matter if the facts and circumstances of the case warrant and particularly in a case of fraud or suppression of facts.
The fourth respondent is, therefore, entitled to make an investigation and as some information has been received by the fourth respondent necessitating such investigation, it is carrying on the same. The fourth respondent being an investigating agency in the matter of possible revenue evasion, there is no question of its overriding the orders of the authorities of the Customs Department when it undertakes an investigation. Such investigation is for the purpose of aiding the authorities in the Customs Department to verify whether the duties assigned to them under the Act are carried out properly and in accordance with law. It is, therefore, not proper at the stage for the Customs Department to release the goods to the petitioners when the fourth respondent is carrying on an investigation. The opinion given by the Additional Collector does not" prevent the fourth respondent from making an investigation on the basis of information received by it, which is not in many cases available to the assessing authorities. Hence, there is no merit in the writ petition and it has to fail.
4. The fourth respondent has filed a separate counter-affidavit. At the outset an objection is taken that the writ petition is premature and aims at scuttling an investigation which is in progress. The following pleas are raised in the said counter-affidavit:--The fourth respondent received information to the effect that a consignment of stainless seamless pipes/tubes had been imported by the first petitioner and that the goods had been declared as of Taiwanese origin, but were of European/British origin and were of good quality. There was also information that the price declared was extremely low and the value would be more than U.S. $ 2500 per M.T. as against the price of U.S. $ 1170 per M.T. as declared. Initial investigations revealed that a certificate purported to have been issued by the Taiwan Chamber of Commerce stating that the goods were of Taiwanese origin had been produced and the goods were declared in the bill of entry as Taiwanese origin and that the manufacturer's invoice had not been produced. It came to the notice of the fourth respondent that such goods were not manufactured in Taiwan. In the course of physical examination of the goods, it was found that some of the goods were bearing marks indicating that they were of U.K. origin and metal tags were also recovered from the containers, which indicated that the other goods were of German origin. Enquiries revealed that Taiwan does not manufacture such stainless seamless tubes/pipes. Hence, investigations are being carried out to find out as to how such a certificate could be issued by Taiwan's Chamber of Commerce. It was also seen that the goods could not be treated as one lot of the same quality of goods, as there were some good quality goods and some defective quality goods. A thorough inspection was found necessary before a final opinion could be given and it required complete destuffing of the containers and sorting out the material with respect to their size. Accordingly, the materials have been desuffered in order to have a complete investigation. Initial enquiries revealed that the value of prime stainless seamless tubes/pipes would be U.S. $ 3100 per M.T. approximately. Even assuming that the goods are seconds, as they are not of Taiwan origin but of U.K. and German origin, the value would be U.S. $ 2400 per M.T. and not U.S. $ 1170 per M.T. as declared. In that event, even if the goods were taken as seconds, it would prima facie appear that the value of the goods would work out to U.S. 141,139 Dollars, in which case it would prima facie appear that there could be a duty evasion of Rs. 33,00,000/-. It would take some time to complete a through inspection after proper segregation Upon destuffing. It is also necessary to conduct an investigation regarding the source of the materials and the actual value thereof. The matters were of serious consequences and if the investigations so disclose, it could amount to serious infringement of the Customs Act rendering the goods liable to confiscation apart from rendering the persons responsible to proceedings as envisaged in the Act. Prima facie, there appears to be fraud and suppression of facts and serious misdeclaration. The view taken by the Customs Department was based on an inspection of the goods available to view upon opening of the container and the documents furnished by the importer. That is not conclusive. The Customs Department as well as the fourth respondent belong to the same Department of Revenue, Ministry of Finance. The result of any investigation relating to possible offences committed within the jurisdiction of the Collector of Customs, Madras and being investigated by the fourth respondent will be handed over to the second respondent. In this case, there is necessity for making enquiries outside the country which would perforce take time to complete. It would be against the interests of justice to set out all the aspects of the present investigation in the counter-affidavit, as the investigation is not yet complete. It would be blunted if the exact avenues of investigations are to be disclosed to the petitioners. This is not a case where a provisional assessment could be made and goods could be released as the goods may be liable to confiscation, if ultimately the investigation disclosed such facts and circumstances which would render them liable for such action.
5. The petitioner has filed two reply affidavits, one in reply to the counter affidavit filed by respondents 2 and 3 and the other in reply to the fourth respondent's counter-affidavit. Apart from reiterating the facts set out in the earlier affidavit, the petitioners have proceeded to state the position in law under the provisions of the Customs Act. It is asserted that there is no fraud or suppression of facts and the process of assessment was completed by the Customs authorities and it cannot be reopened. It is also stated that it is not possible to produce any manufacturer's invoice as the goods were collected from various traders. It is also stated that it is not possible to produce any manufacturer's invoice as the goods were collected from various traders. It is not open to the authorities to ignore the certificate of origin issued by the Taiwan Chamber of Commerce, as it is conclusive evidence under the Commercial Documents Evidence Act. The goods might have been previously imported from other countries into Taiwan for the purpose of utilisation in that country, but they were rejected by the manufacturers in the course of the process of manufacture as detectives. They arc heterogenous mixture of defective/seconds of different types and they are of assorted sizes. The fourth respondent had already listed out the materials and inspected the goods with the help of Metallurgical Experts on five different days. The examinations were very detailed running for several hours and in fact, the fourth respondent had stopped inspection in the third week of August, 1992. It is not understandable what further investigation was to be done. It is a figment of imagination of the fourth respondent that there could be a duty evasion of Rs. 33,00,000/-. The allegations in the fourth respondent's affidavit are very vague. There is no necessity for any investigation in foreign countries. The goods have been lying in the port for quite long time. Hence they should be released to the petitioners immediately.
6. The main contentions of the petitioners are that the assessment of the goods have been completed by the assessing authorities and it has become final. The only way in which such assessment can be reopened is by proceeding under Section 129-D of the Customs Act (hereinafter referred to as 'the Act'). Under that section, the Board may, of its own motion, call for and examine the record of any proceeding for satisfying itself as to the legality or propriety of any decision or order made by the Collector of Customs and similarly, the Collector of Customs may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him had passed any decision or order under the Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order. It is contended that there is no power with the fourth respondent or any other authority to reinvestigate the matter after the process of assessment is completed by the adjudicating authority. Learned Counsel for the petitioners took me through the relevant provisions of the Act and the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. It is submitted that the authorities are bound to accept the transaction value which is defined as price actually paid or payable for the goods when sold for export to India. It is also contended that under the provisions of the Commercial Documents Evidence Act, 1939, the respondents are bound to accept the certificate of origin issued by the Taiwan's Chamber of Commerce as conclusive evidence of the country of origin of the goods. It is also contended that as a mater of equity, the petitioners should not be put to such a heavy loss by way of demurrage and by the non-release of the goods, thereby affecting the petitioners' fundamental right to carry on their manufacture of dying equipments in their factory. On the other hand, it is contended by the respondents that on the basis of information now available with the fourth respondent, there is a serious doubt as to the correctness of the declaration made by the petitioners as to the country of origin of goods and the quality of the goods. It is also submitted that the genuiness of the certificate of origin purporting to have been issued by Taiwan Chamber of Commerce has also got to be investigated. It is argued that if the present information is found to be true, on the completion of the investigation, the goods will be liable for confiscation under Section 11 of the Act and the petitioners will be guilty of smuggling the goods and liable to be proceeded against under the provisions of the Act. It is contended that there is no completed assessment as stated by the petitioners and even if there has been such an assessment, in the event of fraud and suppression of facts, it can be reopened. It is submitted that in the present case, the physical existence of the good is necessary for the purpose of completion of investigation and they cannot be released at this stage to the petitioners even on conditions.
7. Section 17 of the Act provides that after a bill of entry is presented to the proper officer, the goods may, without undue delay, be examined and tested by the proper officer and after such examination and testing, the duty, if any, leviable on such good shall be assessed, save as otherwise provided in Section 85 of the Act. According to learned Counsel for the petitioners, the good have been assessed by the proper officer in this case, as admittedly an endorsement was made in the bill of entry that the value declared by the petitioners could be accepted for the purpose of assessment. I am unable to accept this contention. It is not necessary for the purpose of this case to decide conclusively whether an endorsement made on the bill of entry by the assessing authorities would complete the process of assessment for the purposes of the Act. However, prima facie, the contention of the petitioners' counsel appears to be fallacious. A reference to Section 47 of the Act shows that an order permitting clearance of the goods for home consumption is to be made by the proper officer, after he is satisfied that the goods are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under the Act in respect of the same. It is not in dispute that after an endorsement is made on the bill of entry that the value declared could be accepted for the purpose of assessment of duty, there should be qualification [quantification?] of the duty after the concurrent audit and licence audit are carried out. It is only if any amount is found payable by way of duly it is entered on the bill of entry and the same is returned to the importer for the purpose of payment. Till the bill of entry is returned to the importer with the quantum of duty entered thereon for the purpose of payment, it cannot be said that the process of assessment is completed.
8. The word "assessed" used in Section 17 of the Act, has not been defined in the Act. But, our Courts have had occasions to define the expressions "assessed" and "assessment" occurring in other enactments. In the Bombay Life Assurance Society Ltd., by its agents v. The Council, Corporation of Madras AIR 1951 Madras 725, a Division Bench of this Court, had occasion to consider the words "assess" and "assessment" under the Madras City Municipal Act IV of 1919. The following passage in the judgment is worth reproduction, as it is instructivc:--
7 In my opinion, it will be most unsafe to draw any inference from the mere use of the words 'assess' or 'assessment'. These words do not have one and an only meaning and connotation. In taxation statutes, the word 'to asses' is sometimes used as meaning 'to fix the amount of tax'; sometimes in the sense 'to impose the tax' and sometimes to mean 'to value or calculate for taxation.' The word 'assessment' in the Indian Income Tax Act does not have the same meaning throughout the Act. Lord Romer in Comr. of Income Tax v. Khemchand Ramdas, ILR 1933 Bom 487 : AIR (25) 1938 PC 175, observed:
One of the peculiarities of most Income-Tax Acts is that the word "assessment" is used as meaning sometimes the computation of income, sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the taxpayer.
In 'Income-tax Comrs. v. Gibbs', 1942 AC 402, Viscount Simon L.C. said:
The word "assessment" is used in our Income-Tax Code in more than one sense. Sometimes, by "assessment" is meant the fixing of the sum taken to represent the actual profit for the purpose of charging tax upon it. In another context the "assessment" may mean the actual sum in tax which the tax payer is liable to pay on his profits. These two things are of course not the same It is remarkable that these two separate meanings of the word "assessment" may occasionally be found within the bounds of a single section.
Lord Macmillan in the same case makes the following caustic comment, verbal consistency is the last virtue than can be attributed to a Code which uses so vital a term as "assessment" in not less than eight differing senses.
If this be so where qualified persons draft the enactment in their own language, it is idle to expect draftsmen using a foreign language to be consistent in the use of the word 'assessment'. We respectfully follow the dictum of Lord Wrenbury that, No reliance can be placed upon an assumption of accuracy in the use of language in these Acts (Kensignton Income Tax Comr. v. Aramayo, (1916) - 1 AC 215 : (84 LJKB 2169).
That the words 'assessed' and 'assessment' have been used in the City Municipal Act indiscriminately to import different processes in taxation can be demonstrated by a few references.
Rigby L.J. in dealing with the word 'assessed' with reference to water rate remarked:
The word "assessed" means "reckoned on the value." It is not accurate to say "assessed on the premises"; but it is not very far from accurate to say that a water rate is a rate assessed upon the lessees in respect of the house (Re: Fleyd v. Lyons & Co. (1897) - 1 Ch. 633 at p. 640 : (66 L J Ch 350).
9. In Kalawati Devi v. Income Tax Commissioner, West Bengal , it was observed by the Supreme Court that the word "assessment" could bear a very comprehensive meaning and it could comprehend the whole procedure for ascertaining and imposing liability upon the tax payer. The Court was proceeding to consider some of the provisions of the Income tax Act, 1961. A similar view was expressed by another Bench of the same court in S. Sankappa v. Income Tax Commissioner, Bangalore . It was pointed out that in some sections, the word "assessment" was used only with reference to computation of income, and in other sections it had the more comprehensive meaning.
10. In a case under Travancore Cochin General Sales Tax Rules, the Supreme Court observed that "assessment" is a comprehensive word and could denote the entirety of proceedings which are taken with regard to it and did not mean a final order of assessment alone unless there was something in the context of a particular provision which compelled such a meaning being attributed to it. (Vide The Sales Tax Officer, Ernakulam v. Sudarsanam Iyengar and Sons AIR 1970 SC 911.
11. As stated earlier, it is not necessary for me to express any concluded opinion on that question in the present case. Even if the contention of the petitioners is accepted that there is a completed assessment for the purposes of payment of duty under the Act, the proceedings initiated by the fourth respondent are not invalidated. There is no substance in the contention that they have no jurisdiction to make an investigation as to the correctness of the declaration made by the petitioners in regard to the country of origin and the quality of goods. It is rightly contended by learned Counsel for the respondents that in cases of fraud or suppression of facts, it is possible for the authorities to reopen even completed assessments. Reliance is placed on the ruling of the Delhi High Court in Jain Shudli Vanaspati Ltd. and Anr. v. Union of India and Ors. 1982 ELT 43 (Del.). It was contended in that case that once an order of clearance was passed under Section 47 of the Act, it could be revised by the Collector of Customs or Board under Section 130 of the Act and there was no inherent power of review with any authority. As a matter of law that contention was rejected and it was ruled that the finality could be disturbed if there was fraud or deliberate suppression of facts. But, on the facts of the case, the Court held that there was no proof of fraud or suppression of facts and quashed the notices issued under Section 28 and 124 of the Act to the petitioners in that case. That judgment was affirmed on appeal by the Supreme Court of India in Union of India v. Jain Shudh Vanaspati 1992 AIR SCW 201. The apex Court confirmed the findings of fact arrived at by the High Court and observed that it was not necessary for it to express any opinion on the interpretation of Sections 28 and 47 of the Customs Act.
12. The question was considered at some length by a Division Bench of this Court in Madanlal Steel Industries Ltd. v. Union of India (1991) 56 ELT 705 Mad. The appellant in that case imported from Singapore stainless steel melting scrap for the purpose of manufacturing ingots. The goods were cleared after examination and an order under Section 47 of the Act was passed. Thereafter, four containers were removed from the port premises and were stored at a godown belonging to one Gemini Warehousing. At that stage, the remaining two containers which were in the port area as well as the goods removed to the warehouse were seized by the authorities under a seizure warrant. The validity of the seizure was questioned and it was contended by the appellant that once the goods were cleared under Section 47 of the Act, unless the order was reversed, no action could be taken under Sections 110 and 111 of the Act. The writ petition was dismissed by Kanagaraj, J., who rejected the said argument. On appeal, the view taken by the single Judge was affirmed. After referring to the provisions of Sections 24, 47, 110, 111 and certain other provisions of the Act, the Bench referred to the judgment of Bombay High Court in Union of India v. Popular Dyechem 1987 ELT 63 and also the judgment of the Delhi High Court in Jain Shudh Vanaspati Ltd. case 1982 ELT 43 (Del.) (referred to above) and extracted the relevant passages from those judgments. Ultimately, the Bench observed thus:--
The two judgments thus read together state that: (1) an order under Section 47 of the Act determines that the goods are not prohibited and that it has been cleared of duty payable on it: (2) an order under Section 47 of the Act is final; (3) the finality cannot be disturbed unless the Department successfully shows that there was fraud or deliberate suppression; and (4) this finality, however, will give way to the appellate or revisional order. We may, however, take notice of one important fact that in our view will substantially distinguish the case on hand with the cases decided by the Delhi and Bombay High Courts. In the Bombay Court judgment, even though all the relevant facts are not available, yet, it is possible to find that the Assistant Collector who cleared the goods under Section 47 of the Act had done so after physical verification of the goods and yet a certain proceeding to confiscate the goods had been started. In the case before the Delhi High Court, notices under Section 28 and 124 of the Acct had been issued and they were under challenge, which shows that proceedings for confiscation had already been initiated and along with the proceedings for confiscation, notice for payment of duty short-levied had also been issued.
The Bench proceeded to refer to a judgment of Ismail, J. in A. Subbaraj and Anr. v. Union of India in W.P. Nos. 5296 of 1973 etc., (dated 22.10.1973) which dealt with similar facts. A reference is also made to the decision of a Full Bench of the Calcutta High Court in Euresian Equipments and Chemicals v. Collector of Customs AIR 1980 Calcutta 188. After quoting in extenso the said Full Bench judgment and referring to the observations of the Supreme Court in Collector of Customs v. Boormull , the Bench said:
5. Courts which have taken the view that an order under Section 47 of the Act is final and on the face of such an order in favour of the importer action to confiscate the goods cleared for home consumption cannot be taken, have also taken notice of the exceptions that may arise and even goods cleared in such circumstances can be subjected to confiscation. The Delhi High Court's judgment supra has taken notice of these exceptional circumstances saying, 'The finality cannot be disturbed unless the Department successfully shows that there was fraud or deliberate suppression,' Both the Bombay High Court and the Delhi Court in the cases of Union of India v. Popular Dyechem and Jain Shudh Vanaspati Ltd. and Ors. v. Union of India and Ors. (1982 ELT 43) supra, however, have not taken notice that the seizure and confiscation are acts in rem unlike any penal action under the Act itself being one in relation to the person and such proceedings, however, depend not on any thing else, but the reasonable belief of the proper officer that the goods are liable to confiscation, whether for the reason of being improperly imported goods or for the reason of improper export. Such a belief may be found to be reasonable for the reasons of fraud or suppression, as noticed by the Delhi Court in Jain Shudh Vanaspati Ltd. and Ors. v. Union of India and Ors. supra, or such other reasons or such other grounds which render the import or the export illegal and liable to confiscation. It would be only in the notice under Section 124 of the Act that grounds would be disclosed and then only it would be possible to know whether there has been any fraud, suppression of fact and/or any other invalidity in the import or export, or not.
6. Both the Bombay Court judgment in the case of Union of India v. Popular Dyechem and the Delhi Court judgment in the case of Jain Shudh Vanaspati Ltd. and Ors. v. Union of India and Ors. , on the peculiar facts, are good for taking notice of the order under Section 47 of the Act and saying accordingly that unless that order was set aside, no proceeding for confiscation should have been taken. It is difficult, however, to accept this as a law, as once there is a clearance under Section 47 and/or Section 51 of the Act is ordered, unless that order is set aside, the proper officer cannot act on his reasonable belief under Sections 110, 111 or 113 of the Act. The Calcutta Full Bench judgment in the case of Euresian Equipments & Chemicals v. Collector of Customs AIR 1980 Calcutta 188 : 1980 (6) ELT 138) (Cal) has, in substance, pronounced that such proper officer's satisfaction for confiscation proceedings shall remain unaffected by the order of the proper officer permitting the clearance of goods under Section 51 of the Act. That view is in consonance with the basis of the belief that goods have been improperly imported or exported and such belief being in relation to the goods and in rem, it will not correct to read in the orders under Section 47 or Section 51 of the Act any inhibition upon the jurisdiction of the proper officer to act under Sections 110, 111 and 113 of the Act. The petitioner/appellant came to this Court challenging the seizure without waiting for the notice under Section 124 of the Act. Such materials upon which it will be possible to predicate whether there are reasons for misrepresentation or fraud in importing or exporting of any prohibited goods or dutiable goods in violation of the conditions under which such import or export is permissible, will be available only in the notice, which, as we have already noticed, has to contain the grounds on which the proposal to confiscate is based, to afford an opportunity to the importer or the exporter or any other person from whose custody such goods were seized, to make a representation in writing and thereafter heard. We thus find that this is not a fit case in which this Court can declare the seizure invalid.
13. I have already referred to the provisions of Section 47 of the Act. The order under the said section comes at a stage later than the assessment under Section 17 of the Act. If it is possible for the authorities to take proceedings for seizure or confiscation under Section 110 or under Section 111 of the Act, even after passing an order under Section 47 of the Act and even after the goods are removed from the port area by the parties concerned, a fortiori the authorities have jurisdiction to initiate such proceedings after an endorsement has been made on the bill of entry for accepting the declared value and before any further steps are taken. In the present case, no doubt a proceeding under Section 110 or under Section 111 of the Act has not been initiated yet. But, before initiating such a proceeding, it is necessary for the authorities to satisfy themselves that there are grounds for taking such proceedings. It is for that purpose, an investigation is being made by the fourth respondent and according to its affidavit, some information has been received in that regard and some prima facie materials are available. It is not for this Court to express any opinion at this stage as to whether the information and the materials available to the fourth respondent are sufficient to enable them to detain the goods. As rightly pointed out by the fourth respondent, it will not be in the interests of justice to disclose the materials available with them at this stage. There is no substance in the contention of the petitioners that the fourth respondent is guilty of mala fides in law as it has no jurisdiction to make an investigation. Far from it, the fourth respondent has got the necessary power to make an investigation as and when it gets materials there for. Nothing has been alleged in the affidavit that there is any mala fide in facts on the part of the fourth respondent.
14. It is also not possible to accept the contention of the petitioners that the certificate of origin of goods produced by them should be accepted as conclusive. No doubt, a certificate is produced by the petitioners purporting to have been issued by Taiwan Chamber of Commerce to the effect that the merchandise described therein is grown/processed/manufactured in Taiwan origin.
15. Under the Commercial Documents Evidence Act, 1939, a Court for the purposes of the Indian Evidence Act shall presume within the meaning of that Act in relation to documents included in Part I of the Schedule that such document was duly made by or under appropriate authority and the statements contained therein are accurate. Item 18 in Part I of the Schedule to the Act relates to "Certificate of Origin of Goods" issued by a recognised Chamber of Commerce. Section 4 of that Act defines a 'recognised Chamber of Commerce" as a Chamber of Commerce recognised by the Government of its country as being competent to issue certificates of origin, including any other association similarly recognised. But, under Section 4 of the Indian Evidence Act, whenever it is provided by that Act that a Court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. Thus, even in cases of mandatory presumptions, it is open to the opposite party to disprove the same. It is not as if the certificate of origin issued by the Taiwan Chamber of Commerce is a conclusive proof of the statement contained therein.
16. Admittedly, the goods are not purchased from any one manufacturer in Taiwan. According to the respondents, some of them are of U.K. origin and some of German origin, as disclosed by the marks borne by them. It is also stated that some metal tags were also recovered from the containers by the fourth respondent. The fourth respondent has also expressed a doubt as to the genuineness of the certificate. Admittedly, the goods or materials from the scrap were collected from different places/mills having different origin is evident from the letter dated July 30, 1992 written by Flotec Company Limited, Taiwan to the first petitioner. Learned Counsel for the petitioners contends that even such goods could be considered as manufactured in Taiwan and the expression "manufactured" is wide enough to include the rejection of certain goods and defectives. It is not necessary for me at this stage to define the expression "grown", "processed" and "manufactured" for the purpose of this case. It is sufficient to take note of the fact that the fourth respondent is carrying on an investigation as to the quality of the goods and the country of origin. If ultimately the information received by the fourth respondent is found to be true, the petitioners will certainly be liable to be proceeded against under the provisions of the Act. In those circumstances, the contention of the respondents that the writ petition is premature is well-founded.
17. The prayer of the petitioners that the respondents should be directed to release the goods covered by their bill of entry referred to in the petition cannot be granted.
18. The writ petition has to fail and it is hereby dismissed. There will be no order as to costs.
19. In the course of arguments, learned Counsel for the respondents slated that the fourth respondent would require at least four weeks for completing the investigation. Having regard to the fact that the fourth respondent ha already taken more than a month since it took charge of the documents form respondent 2 and 3, the fourth respondent is directed to complete the investigation and communicate its result to respondents 2 and 3 before 9.10.1192.