Court quashes show cause notice, allows re-export of goods without duty payment

The court quashed the show cause notice issued by the Assistant Collector regarding the attempted export of photographic films imported under Open General Licence. The adjudication order confiscated the goods but allowed clearance for export on payment of redemption fine and customs duty, with personal penalties imposed. The court analyzed Customs Act provisions on export entry, clearance, and re-export conditions, finding no prohibition on re-exporting the goods. It determined that the Import and Export Policy did not apply, allowing the petitioner to re-export the goods without duty payment, subject to Customs Act provisions.

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Issues:
1. Quashing of show cause notice dated 27/29.6.1989 issued by Assistant Collector.
2. Confiscation of goods under Section 113(d) of the Customs Act, 1962.
3. Amendment of petition to challenge the adjudication order.
4. Interpretation of provisions related to export of goods under the Customs Act.
5. Application of Import and Export Policy, 1988-91 to the case.
6. Re-exportation of photographic films (colour) imported under Open General Licence.
7. Security for payment of any amount of duty or charges due to respondents.
8. Direction for re-exportation of goods without payment of duty.

Analysis:
1. The petitioner sought to quash a show cause notice issued by the Assistant Collector regarding the attempted export of photographic films imported under Open General Licence, which was alleged to be in violation of the Export (Control) Order, 1977.
2. An adjudication order was made confiscating the goods under Section 113(d) of the Customs Act, 1962, but allowing the exporter to clear the goods for export on payment of redemption fine and customs duty, along with imposing personal penalties under Section 114 of the Act.
3. The petitioner sought to challenge the adjudication order based on a letter from the Chief Controller of Imports & Exports stating that re-export of goods imported under Open General Licence was prohibited, while citing instances where similar goods were re-exported without duty payment by Bombay Customs.
4. The judgment analyzed provisions of the Customs Act related to entry of goods for export, clearance for exportation, and conditions for export without payment of import duty, emphasizing the requirements for re-exportation of goods not classified as prohibited.
5. The court examined the applicability of the Import and Export Policy, 1988-91 to the case, concluding that the Export (Control) Order, 1988 did not apply to the photographic films in question, which were allowed for import by all persons for actual use, stock, and sale.
6. Regarding the re-exportation of the goods, the court noted that there were no provisions restricting the sale of imported goods within the country and questioned the validity of the clarification from the Chief Controller of Imports & Exports, highlighting safeguards under the Foreign Exchange Regulation Act, 1973.
7. The court accepted an undertaking from the petitioner's directors to secure the interests of the respondents by not disposing of certain property without court permission, ensuring that the property could be used as security for any duty or charges found due in the petition.
8. Ultimately, the court directed that the petitioner be allowed to re-export the goods without payment of duty, subject to the provisions of the Customs Act, noting that the decision was a prima facie view pending final determination in the petition.

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