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3(2) The appellants are not a party to any conspiracy. He referred to the observation of the Collector in para 25 page 62 of the order, wherein the Collector has alleged a conspiracy to import high valued chemicals to be cleared duty free under the D.E.E.C. licence. The Collector in his findings has recognised the long standing business relationship of the appellants with M/s. U.K. Paint Inds. as is evidenced from previous imports by M/s. U.K. Paint Inds. from the appellants. Hence the absence of written purchase order etc. cannot be a factor for sustaining such an allegation. Their contract was oral based on long standing business relationship. It is also on record that the appellants had supplied the same S.T.P.P. to M/s. U.K. Paint Inds. and the lot number of S.T.P.P., previously cleared is the same as the present ones. Possibly because of the same lot numbers of the previous consignment of S.T.P.P. the present confusion in shipment might have occurred. Hence there is no mala fide in the appellants' declaration in export documents and for obtaining Bill of lading. This is a case of bona fide wrong shipment of goods due to the fact that both S.T.P.P. and P.V.A. are in white powder form and both the previous consignment of S.T.P.P, and the present consignment of P.V.A. had same lot numbers, the bona fide mistake in wrong shipment has occurred. This cannot be construed as a conspiracy. The previous consignment of S.T.P.P. has been cleared without any allegation of misdeclaration. Hence, in the absence of any evidence, it cannot be alleged that the appellants were supplying high valued P.V.A. misdeclaring it as S.T.P.P. in their documents. The appellants' initial attempt to divert the consignment to Kandla was with a view to finding any other Indian buyer for P.V.A. and Kandla, being cheaper with regard to port charges for detention. In any case, their countermanding of exports or for diverting to Kandla was not after investigation by Customs. The Customs commenced their enquiry only on 7-10-1992 with the shipping agents and this was not also within the knowledge of the appellants. The appellants came to know of this for the first time only on 13-10-1992. Hence their instructions to the shipping lines for retention of cargo or for diversion to Kandla, having been initiated as early as on 6-10-1992, are not to be construed as an effort to retrieve the cargo after commencement of the Customs investigation. Hence the ratio of the Apex Court decision in M/s. Sampatraj Dugar's case - 1992 (58) E.L.T. 163 (S.C.) would be applicable and the goods should be allowed to be reshipped to the appellants without fine. Similar approach has also been adopted by the Tribunal - vide 1991 (53) E.L.T. 29,1989 (38) E.L.T. 388,1992 (58) E.L.T. 268.

4(1) Shri Mondal, the ld. S.D.R. ably refuted each of these contentions. He took us through the various documents filed in the paper book filed by him and also cited by the other side to appreciate the chronological events. He also pointed out the inconsistent stand reflected in their earlier telexes with shipping line where they claimed that they wanted to bring back the goods to Singapore on account of Import licence problem without making a whisper about wrong shipment of the goods and their belated attempt to claim it as a wrong shipment, their initial refusal to answer any queries by Customs, though they wanted the Customs to allow reshipment. He also points out that their final replies to Customs queries clearly indicate that there were no documents at all with the appellants in the form of purchase order, the particulars of packing, from where the materials were procured in Taiwan, how wrong despatch has occurred. They were not even aware of the bank through which the documents are to be sent. Even the sale invoice has not been produced by them. Their claim that goods valued over Rs. 50 lakhs were purchased in the open market without any documents and were shipped wrongly with labels bearing description S.T.P.P. instead of P.V.A. without offering any details as to where they were packed and how wrong shipment has been effected, does not carry any credibility. This admitted position itself speaks volumes about their mala fides.

(iii) Though contracts can be orally agreed upon between the contracting parties, the burden of establishing that there was a valid contract existing for performance of legally permissible act, is on the party affirming the existence of such a contract, especially when the other party clearly indicates that he is not having any concern with the goods supplied in pursuance of such a contract. In this case before us, such a burden squarely falls on the appellants. They have not produced a piece of evidence, excepting pointing out certain findings of the Collector that he also recognises previous imports by U.K. Paints from the appellants and thereby establish longstanding business relationship with U.K. Paints. Even for the sake of argument, we are led to believe that because of previous suplies to U.K. Paints, they have exported the present consignment on a verbal contract, still we are not satisfied that such a contract is for performance of an act sanctioned under the law namely for supplying STPP to U.K. Paints. A contract, which can be enforced in any court, should be one for performance of acts legally sanctioned and not for illegal acts. Here, in the context of the admitted position, we find that as against the verbal contract claimed to be for shipment of STPP, the goods shipped were P.V.A. They have not produced any evidence to show that they acquired this much of quantity of STPP from various sources in Taiwan and instead of shipping it, they shipped P.V.A. wrongly. Here their claim' of having purchased STPP from market in Taiwan itself is not supported by evidences and this is the admitted position. Hence we are led to believe that the appellants have not acquired STPP claimed to be covered by this shipment from any sources in Taiwan. Their claim, that since it was open market purchase, there is no purchase order, is also found to be difficult to digest. Because, the enormity of the quantity and its value involved rule out such an acquisition without any document. Hence we are led to believe that the appellants have not acquired STPP for shipment and hence the question of shipping STPP in pursuance of verbal contract does not arise. They have shipped only P.V.A. knowingly under the false description STPP and this could only be the purpose and content of the verbal contract claimed to be in existence. Hence such a contract executed verbally for an illegal act, being not legally enforceable against the other side, they now apparently choose to retrieve the goods by putting forth the theory of wrong shipment. Such a theory being not supported by any piece of evidence regarding acquisition of STPP for shipment and their packing, mistake in shipment, cannot find acceptance by us, however much we are persuaded by the tempting and persuasive arguments of Shri Nankani. In the result, the factual position discussed above indicates that even if we assume the existence of a verbal contract, that contract apparently is for sending P.V.A. by declaring the goods as STPP for illegal import into India against duty-free import licences. This conclusion is inescapable, because of the admitted position that the appellants do not have any evidence of acquisition of STPP, their packing simultaneously with P.V.A. causing wrong shipment. On the contrary, the Department's allegation that previous consignment of STPP bearing same batch number also could have been P.V.A., because of the same batch number indicated in that, cannot be ruled out. However, we do not propose to give a finding on this possibility, because no other tangible evidences have been led by the department with regard to the previous consignment cleared. All the same, this gives support to the Department's claim for keeping a watch over imports by U.K. Paint Industries receiving goods under misdeclared description based on information, which has led to this case. It is also not disputed that prior to the detention of this consignment, some other consignments of U.K. Paints have also been detained, one of which has also been adjudicated, as revealed by the ld. counsel. The two parties to the verbal contract (as claimed by the appellants) should be presumed to have free access verbally. It cannot therefore be ruled out that M/s. U.K. Paints verbally alerting the suppliers about the watch being kept by Bombay Customs over their imported consignments, telling them to divert the goods to Kandla for clearance there or in any case for not allowing the goods to land at Bombay. In pursuance of such a verbal talk, the appellants apparently have been alerted and they started the correspondence with the shipping line on 6-10-1992. The could have stopped the goods at Singapore itself between 26-9-1992 to 28-9-1992 when the goods were in transhipment from one vessel to another vessel for onward carriage to Bombay, if their claim of wrong shipment or licence problem was genuine. Hence we are led to believe that all is not well with the alleged bonafide of the appellants and the entire transaction looks to be bereft of bonafides. Though the Collector's findings leading to the same conclusion are somewhat on different lines, we are led to the above line of thinking on carefully appreciating the same set of evidences placed before the Collector as well as before us.

(iv) There is also considerable force in the contention of Shri Mondal that their earlier stand in the correspondences with the shipping line was that due to licence problem, they are calling back the consignment. The Customs Department sought for replies to their queries, when the appellants sought for reshipment without stating any reason. At that time, they refused to give any explanation. Only at a belated stage and apparently on legal advice they put forward the theory of wrong shipment. Had it been a case of wrong shipment, they would have, in the first instance pleaded this not only before the shipping line but also sent an intimation to Bombay Customs explaining the position, seeking for allowing reshipment. Their refusal even to explain the reasons while claiming reshipment before Customs also hits at their claim of bonafides. Only subsequently, when they found that the goods have been detained for examination, they apparently have come forward with this theory, on legal advice. The ld. Counsel's plea that both explanations are two sides of the same coin does not convince us, especially when we find the coin itself is a counterfeit one, not being acceptable by looking into either side.