Indian Kanoon - Search engine for Indian Law

13. Mr. Burman, the learned advocate appearing on behalf of the appellants, has submitted before us that the restrictions imposed under Section 12 (1) of the Foreign Exchange Regulation Act, 1947, shall, by virtue of the provisions contained in Section 23A of the said Act be deemed to be restrictions imposed under Section 11 of the Customs Act, 1962. It is his submission that any violation of the prohibition or restriction imposed under Section 12 (1) of the Foreign Exchange Regulation Act, 1947, will, therefore, be deemed to be a violation of the prohibition or restriction of Section 11 of the Customs Act, by virtue of the provisions contained in Section 23A of the Foreign Exchange Regulation Act, 1947. He argues that violation of Section 11 of the Customs Act will bring into effect the provisions contained in the said Act dealing with such violation. It is, however, his argument that even assuming that there has been a violation of Section 11 of the Customs Act in consequence of any violation of Section 12 (1) of the Foreign Exchange Regulation Act, because of the deeming provision contained in Section 23A of the Foreign Exchange Regulation Act, Sections 113 and 114 of the Customs Act cannot have any application in the instant case, as the goods in respect of which the violation is alleged had already been exported. Referring to the provisions of Section 113 of the Customs Act 1962, Mr. Burman contends that on a true construction of the said section, the said section cannot be said to have any application to a case where goods have actually been exported, even if the goods might have been exported in violation of any prohibition or restriction under Section 11 of the Act. It is the contention of Mr. Burman that on a plain reading of Section 113 of the Customs Act, there can be no room for doubt that the said section applies only to goods which have not in fact been exported. Mr. Burman has pointed out that Section 113 commences with the words "the following export goods shall be liable to confiscation", and he argues with reference to the definition of export goods in Section 2(19) of the Act that 'export goods' only means goods which are to be taken out of India to a place outside India and therefore, can never mean or include goods which have already been taken out of India to a place outside India. He has drawn our attention to the provisions contained in Clauses (a), (b) and (d) and has argued that, the provisions therein stipulate in clear and unambiguous language "any goods attempted to be exported". It is his argument that on a plain reading of Section 113 of the Customs Act, it is clear that the said section only applies to 'export goods' at the time when such goods are attempted to be exported and will have no application when the goods have in fact been exported. He has pointed out that in the corresponding provision in Section 147 of the Sea Customs Act the words used were "both attempted to be exported and also exported" and in the present Customs Act the words "and also exported" have been omitted. He contends that the legislature must have advisedly omitted the said words, as the legislature has intended that Section 113 will only apply to a case when export goods are attempted to be exported and will not apply when goods have in fact been exported. In support of his contention that 'export goods' do not mean and include goods already exported and Section 113 of the Customs Act will have no application to goods already exported, Mr. Burman has relied on the decision of the Division Bench of this Court in the case of Jute Investment Co. Ltd. v. S. K. Srivastava (1973) 77 Cal WN 501 and Thomas Duff & Co. (India) Pvt. Ltd. v. Collector of Customs, 1976 Cal HCN 242 (also reported in (1976) 80 Cal WN 305). Mr. Burman has also referred to the judgment of Sabyasachi Mukharji, J. in the case of United India Minerals Ltd. v. Assistant Collector of Customs, Calcutta, reported in 1971 Cr LJ 1370. Mr. Burman has pointed out that this Judgment was reversed on appeal by Division Bench and the judgment of the Division Bench is (also reported in (1976) 79 Cal WN 900). Mr. Burman has commented that because of the judgment of the Division Bench in the case of Assistant Collector of Customs, Calcutta v. United India Minerals Ltd. : (also reported in (1976) 79 Cal WN 900) the present Full Bench reference has been made, as this judgment appears to be in conflict with the two earlier decisions of the Division Benches of this Court. Mr. Burman has criticised the decision of the Division Bench in , mainly on the ground that in this judgment the court did not properly consider the judgment of the Division Bench in the case of Jute Investment Co, Ltd., (1973) 77 Cal WN 501 which was cited before the Court. It is also the criticism of Mr. Burman that no cogent reasons have been given for the views taken and the Court has not correctly construed the provisions of the Customs Act and the view expressed to the effect that "the words would refer such goods liable to confiscation in Section 114 have been used in a notional or hypothetical sense", is erroneous and unjustified.

(vii) Unless we construe Section 113(d) in this manner we shall land in absurdities. For instance, let us take a case in which goods are brought within the Customs area in an attempt to export illegally and the exporter faced with the possibility of detection tries to escape with the goods and while he is escaping, the goods fall into the river or the sea. Can it be said that the exporter cannot be punished for attempt to export? Obviously answer is in the negative".

26. It is quite clear that violation of any prohibition or restriction imposed under Section 12 of the Foreign Exchange Regulation Act 1947 will result in a violation, of the prohibition or restriction under Section 11 of the Customs Act 1962 by virtue of the deeming provisions contained in Section 23A of the Foreign Exchange Regulation Act; and necessarily, all the provisions of the Customs Act which may be attracted because of violation Section 11 of the Customs Act will have effect. The question is whether the violation of the prohibition or restriction imposed under Section 11 of the Customs Act will attract the provisions of Sections 113 and 114 of the Act in a case where goods had already been exported. The answer to this question will depend on proper construction of the relevant provisions of the Customs Act and of the provisions contained in Section 113 in particular. Section 113 lays down conditions when export goods become liable to confiscation. It makes provision as to under what circumstances 'export goods' incur the liability to confiscation. Section 113 does not deal with actual confiscation of the goods or the physical possibility of confiscation thereof. It only provides that 'export goods' shall be liable to confiscation, if any of the conditions stipulated in Section 113 are satisfied, in other words, it makes provision as to the incurring of liability to confiscation of the 'export goods'. Section 113(d) makes it clear that 'export goods' shall incur the liability to confiscation if the goods are attempted to be exported contrary to any prohibition imposed by or under the Customs Act or any other law for the time being in force. 'Export goods' as defined in Section 2(19) of the Customs Act means 'any goods which are to be taken out of India to a place outside India'. Any goods which are to be taken out of India to a place outside India will incur the liability to confiscation under Section 113(d), if the said goods are attempted to be exported contrary to any prohibition imposed by or under the Customs Act or any other law for the time being in force. The liability to confiscation arises and is incurred as soon as the 'export goods' are attempted to be exported contrary to any such prohibition and attempt to export the goods must necessarily precede the actual exportation of the goods. The liability of the goods to confiscation, therefore, arises as soon as the said goods are attempted or sought to be exported contrary to such prohibition. This liability which "accrues or arises as soon as the attempt to export the goods is made is in no way dependent and has not been made dependent on the possibility or feasibility of actual confiscation of the goods. This accrued liability of the goods to confiscation clearly attracts Section 114 of the Customs Act which provides that any person who in relation to any goods, does or omits to do any act, which act or omission would render such goods liable to confiscation under Section 113 or abets the doing or omission of such an act, shall be liable to penalty as provided in the said Section. With the incurring of liability of the goods to confiscation under Section 113, any person who in relation to such goods has done or omitted to do any act which act or omission has rendered such goods liable to confiscation under Section 113 or abets the doing or omission of such an act, renders himself liable to penalty under Section 114. On a proper construction of Sections 113 and 114 of the Customs Act with reference to the language used in the said sections this position, in our opinion, clearly emerges. We fail to appreciate how the accrued liability of the goods to confiscation with the attempt made for exporting the same contrary to prohibition is extinguished or wiped out with the said illegal attempt succeeding, resulting in the actual exportation of the goods. A plain reading of Section 113 of the Customs Act providing for liability to confiscation of export goods and of Section 2(19) of the Act defining 'export goods' does not appear to indicate or suggest that the accrued liability to confiscation is so extinguished or wiped out. It may be noticed that this liability to confiscation attaches to the goods at the time the goods are sought to be exported contrary to prohibition and at that point of time the goods which are to be taken out of India to a place outside India have not been taken out of India to a place outside India. In other words at the point of time when the liability to confiscation accrues, the goods are 'export goods' well within the meaning of the definition of export goods in Section 2(19) of the Act.

27. In our opinion, this appears to be the proper interpretation of Sections 113 and 114 of the Customs Act, applying the well settled principles of construing the said sections with reference to the language used therein. This interpretation further appears to be in accord with the objects for which this particular legislation has been enacted by the Parliament.

28. We have earlier set out the provisions of Section 11 of the Customs Act which confers power on the Central Government to prohibit importation or exportation of goods for purposes mentioned therein. These purposes indeed cover very very wide fields. Some of the purposes for which the prohibition may be imposed as stated in Section 11(2) are, prevention of smuggling, prevention of shortage of goods of any description and prevention of the contravention of any law for the time being in force. Section 113 provides for liability of the goods to confiscation in case of any violation of the prohibition imposed under Section 11 of the Act and Section 114 provides for personal penalty for those whose acts or omissions render the goods liable to confiscation under Section 113. To construe the said sections to mean that Section 114 can only be attracted when the goods are attempted to be exported and will have no application when goods have in fact been exported will defeat the purpose and object for which the said provisions have been introduced. The submissions that the legislature has so intended by using the words 'attempt to export' in Sections 113 (a), (b) and (d) and the analogy of the offence of attempt to commit suicide given in this connection are, in our opinion, misleading and devoid of merit. An attempt to commit suicide is indeed an offence and the act of committing suicide resulting from the successful attempt may not be considered to be an offence. This is so for the simple reason that once a person attempting to commit suicide succeeds in his attempt he places himself beyond the reach of law and no punishment is intended to be inflicted on the dead person or his heirs and legal representatives by imposing any fine or penalty, as they may in no way be liable or responsible for the said act. As we have earlier observed, the liability of the goods to confiscation arises under Section 113(d), as soon as the goods are attempted to be exported and the attempt to export the goods necessarily precedes the actual export of the goods. Goods become liable to confiscation as soon as the attempt is made. There is no provision in the Act to suggest that this accrued liability is wiped out or extinguished with the exportation of the goods. It may be that after the goods had in fact been exported the liability of the goods to be confiscated may not be enforceable by actual confiscation of the goods. Personal penalty of any person who, in relation to the goods, does or omits to do any act which act or omission renders the goods liable to confiscation under Section 113 or abets the doing or omission of such an act has been provided in Section 114. This provision is attracted as soon as the goods Incur the liability to confiscation under Section 113 and such liability, as we have earlier held, arises when the goods are attempted to be exported contrary to any prohibition. It is to be noted that at the time when the goods are sought to be exported they are undoubtedly 'export goods' within the meaning of Section 2(19) of the Customs Act. The liability of personal penalty provided in Section 114 of the Act, which arises with the accrual of the liability of the goods to confiscation under Section 113 of the Act at the stage of the attempt to export the said goods, clearly remains and the said liability is capable of enforcement. In the case of illegal export of any good's contrary to prohibition the effect may be that the liability of the goods to confiscation which arises and accrues may not be capable of enforcement but the personal liability which arises with the accrual of liability of the goods to confiscation can be enforced and by enforcement of the persona] liability the offender can still be brought to book and this kind of offence may be checked. We must, therefore hold that by virtue of Section 23A of the Foreign Exchange Regulation Act 1947 the provisions of Sections 113 and 114 of the Customs Act 1962 are attracted, when there is a contravention of Section 12 (1) of the Foreign Exchange Regulation Act 1947 in relation to goods which had in fact been exported. This was indeed the first question which came up for consideration before the Division Bench and has been referred to the Full Bench and our answer to this question is therefore in the affirmative.

29. An order by the proper officer permitting clearance and loading of the goods under Section 51 of the Customs Act does not affect the position.

30. We have earlier noticed that under Section 113 of the Customs Act export goods incur the liability to confiscation at the stage when they are attempted to be exported.

31. The attempt to export necessarily precedes actual export. At the time of attempting to export the goods contrary to prohibition, the liability of the goods to confiscation arises and at the point of time, when the liability to confiscation arises, the goods are 'goods which are to be taken out of India to a place outside India' and are, undoubtedly, 'export goods' within the meaning thereof as defined in Section 2(19) of the Act. Actual export of the goods, as a result of the attempt succeeding subsequent to the stage of the attempt, is not indeed of any material consequence. The goods are 'export goods' as defined in Section 2(19) of the Customs Act 1962, at the time the goods incur the liability to confiscation under Section 113 of the said Act. We accordingly answer the second question which came up for consideration before the Division Bench and which has been referred to the Full Bench in the manner indicated above.