TaxTMI 
TaxTMI 
1987 (10) TMI 301
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....d's order may be upheld. 4. The learned barrister reiterated that the Board's order and the Collector's order may be set aside as the action was illegal ab initio and the Collector had no power to stop export and the goods were not liable to confiscation and they were not liable to any fine or penalty. He emphasised that they had followed the prescribed law and procedure and the stopping of the consignment was an illegal and malafide act. The Board in its findings had not discussed or evaluated the so-called evidence relied upon by the Collector Board's reliance upon the Collector's order was mis-placed and its finding on the point of country of origin was wrong. The Collector himself was wrong in relying on the opinion of NAFED & Agmark authorities. The person who gave the opinion was not expert and his opinion was of no evidentiary value. 5. Moreover, the Collector had not acted as per his own best judgment or discretion but had taken action & passed the impugned order at the behest of some higher authorities. The order was, therefore, malafide. It was indeed an instance of abdication of jurisdiction by the Collector. His order was, therefore, not proper order. 6. They h....
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....of the arguments were also submitted. In view of the respective submissions by the parties I proceed to examine them in detail. 14. The first point on behalf of the appellants is that when the goods in question had reached Jogbani the Land Customs authorities posted there had certified that the goods were of Nepalese origin and there was proper compliance with the formalities laid down in the Treaty between the two countries. In this connection they have drawn my attention to the Customs Transit Declaration (Export) placed at page 31 of the paper book with respect to 155 bags. There is an endorsement made in it by the Chief Customs Officer, Customs Office, Biratnagar, Govt. of Nepal to the effect that necessary checks have been made in terms of the provisions of the export procedure of the Treaty of Trade & Transit between the two Govts. and the goods certified therein were allowed to move to Calcutta port duly sealed. There is also an endorsement of the Border Examiner, Land Customs, Jogbani on it. In it the description of the goods shows that 155 bags of Nepal origin turmeric were packed in double gunny bags. In any view of the matter it has now been disputed that the Borde....
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....llants have contended that at least the department has not challenged their reports. Shri Saraf has submitted that from all these it would appear that since Nepal and India are bordering countries and since the same stretch of land extends between the two countries on both sides of the boundary in which turmeric is grown, it is not only difficult but almost impossible to state, so far as the turmeric grown on this stretch of land is concerned, whether it is of Indian or Nepalese origin. 18. In this connection my attention has been drawn to the case of Padam Kumar v. Addl. Collector of Customs (AIR 1972 SC P. 542). This was a case of export of Masur dal from Nepal to other countries through Calcutta. It was held by the Customs authorities that the Masurdal in question was of Indian origin. It was, however, held by the Hon'ble Supreme Court that there was absolutely no basis for any such conclusion by the adjudicating officer, since the witnesses examined frankly conceded that it was not possible for them to say distinctly that the dal in question was of Indian origin. They further deposed that they were unable to distinguish between Indian Dal and the Nepalese Dal. Shri Saraf ....
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.... to have analysed the turmeric are concerned, they have not been examined and their names have not been disclosed. Shri Varghese has admitted that he had gone to Nepal 10 years ago but there is no record to show that or the fact that he had occasion to see Nepalese turmeric. From all these it would appear that Shri Varghese cannot be said to be an expert within the meaning of the Section 45 of the Evidence Act and that this opinion, if at all, is not based on his own scientific examination of the samples. Hence, any such opinion cannot inspire confidence. It is well known that in the eyes of law an expert is one who has acquired specialised knowledge, skill or experience in any branch of science, trade or profession. 21. Moreover, Shri Varghese has not given any scientific data to come to the conclusion that the turmeric in question was of Indian origin. As a matter of fact, he has admitted in his report that the same was not put to any chemical examination since according to him the laboratory test will not help in determining the origin. In any view of the matter, as observed by the Supreme Court (AIR 1959 SC 488), the Court can refuse to place its reliance on the opinion of a....
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....nd and calculating its value at Rs. 3.47 per Kg. for the total quantity of 15,362 MT, would be Rs. 53,309,000/-. From these discussions it would appear that the Department has not been able to show that the goods were of Indian origin and not of Nepalese origin. The report of the National Planning Commission for the year 1976-77 was also shown to the learned adjudicating officer. It was pointed out by Shri Saraf, the learned advocate, that the similar question with respect to Masurdal came up for consideration before the Hon'ble Supreme Court in the case mentioned above (AIR 1972 SC P. 542). Under the circumstances it was submitted that it has not been properly proved by the department that the turmeric in question was of Indian origin and not of Nepalese origin. 25. It was submitted that the main point involved in the present appeals is whether the turmeric exported from Nepal by the appellants in transit through India were of Indian origin and whether the same has been conclusively proved to be so by the Customs authority. It was further submitted that the next point for consideration would be whether the appellants were entitled to export the said goods under the Treaty betwe....
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....e to confiscation and they were not liable to pay any fine or penalty. He emphasised that they had followed the prescribed law and procedure and the stopping of the consignment was an illegal and malafide act. The Board in its findings had not discussed or evaluated the so-called evidence relied upon by the Collector. Board's reliance upon the Collector's order was mis-placed and its findings on the point of country of origin was wrong. The Collector himself was wrong in relying on the opinion of NAFED & Agmark authorities. The person who gave the opinion was not expert and his opinion was of no evidentiary value. 30. Moreover, the Collector had not acted as per his own best judgement or discretion but had taken action and passed the impugned order at the behest of some higher authorities. The order was, therefore, malafide. It was indeed an instance of abdication of jurisdiction by the Collector. His order was, therefore, not a proper order. 31. They have suffered for nearly nine years from 1971 onwards for no fault of their own and a lot of harassment and financial loss and difficulties have been caused to them. He would pray that in view of their submissions their appeals ....
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....R has raised a preliminary objection that this Tribunal is not competent to hear the appeal and the appeal is not maintainable. He has referred to the definition of the Adjudicating Authority as given under sub-section (1) of Section 2 of the Customs Act, 1962. The learned J.D.R. has referred to old Section 128 (before amendment) and has argued that the remedies available are under the erstwhile section to the appellants. The Ld. J.D.R. has argued that the Collector of Customs had no authority to order to stop the export of the goods under Customs Act. He has referred to Page 74 of the Paper-Book which is the operative part of the Order passed by the Collector of Customs relates to (i) the imposition of penalty and confiscation of goods under C.A. '62 and (ii) stoppage of the export of the goods. The Ld. JDR has also referred to the provisions of Section 129A of the Customs Act which vests the aggrieved person the right to file an appeal before the Tribunal. Shri Chatterjee, J.D.R., during the course of his arguments also argued that the goods for export were of Indian Origin and were going to be exported in the guise of goods of Nepalese Origin which could not be permitted to be e....
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....erjee replied that the Board had delinked the two portions of the Collector's Order at its own level. It was the submission of Shri Chatterjee that the Board had set aside the confiscation order of the goods and the penalty. What remained is merely the stoppage of the goods for export without any confiscation or any offence under Section 113 as well as 114 of the Act. This, by itself, cannot be deemed to be a decision under the Act so as to enable anyone to file an appeal before the Tribunal within the provision of Section 129A of the Customs Act, 1962 with special reference to the definition of 'Adjudicating Authority' provided under Section 2, Sub-Sec. (1) of the Customs Act, 1962. 36. In reply, Shri S.L. Saraf, the Ld. Barrister argued that the Ld. J.D.R.'s arguments should be recorded. The Ld. Barrister has argued that the J.D.R. was trying to say that there are two portions of the adjudicating order and of the two portion one protion can be heard in appeal whereas the other portion of the order cannot be heard in appeal. The Ld. Barrister has also requested for recording the argument of the J.D.R. that the decision of the Collector in stopping the export of the goods is not....
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.... Paper-Book. He has referred to the Indo-Nepal Treaty. He has referred that the Collector of Customs had acted or purported to have acted under the Provisions of Customs Act, 1962 and as such the Appellate Authority has got the jurisdiction to hear the appeal. He has referred to Page 26 of the Indo-Nepal Treaty. 37. In reply, Shri A.K. Chatterjee, the Ld. J.D.R. agreed with the arguments of Shri Saraf to the extent that the Collector had powers to stop the goods for export. He, however, emphasised that only the confiscation and imposition of penalty were under the Customs Act. Stoppage was with reference to the Indo-Nepal Treaty. Shri Chatterjee reiterated that the Board had set aside the order passed by the Collector in respect of confiscation and penalty and what remains is the stoppage of goods under the Treaty which, by itself, cannot be a subject matter of appeal. 38. Shri Saraf, the Ld. Barrister in clarification has stated that the Ld. J.D.R. is not correct in saying that the Collector has the power to stop the goods from exporting. If such goods, after compliance with the prescribed procedures, come for exportation, the Collector has no such power. The Collector's Ord....
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....oms, Customs House, Calcutta within 10 days thereof as to why the transit facilities in respect of the subject export consignments should not be refused in terms of the provisions of Article-II, VI and VIII of the Treaty of Transit between HMG of Nepal and the Government of India and why the goods should not be confiscated under Section 113(d) and 113(i) of the Customs Act, 1962 and penalty should not be imposed on the exporters under the Customs Act, 1962." 40. In other words, this show cause notice is a notice under the Customs Act to show cause to the Collector of Customs as to why the proposed action should not be taken against them under the Customs Act. The articles of the Indo-Nepal Treaty of Transit and the Agreement of Co-operation have essentially come into picture as an integral part of the facts and circumstances of the case; and the stoppage of export and confiscation and penalty were the consequences of the situation as perceived by the Customs Authorities in view of the laws in force in India. The Order-in-Original is a one single composite order covering various aspects of the case including the infringement of Treaty and the Article of the Agreement and (consequ....
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....ion 131 of the Customs Act. Obviously, the learned Collector and the Hon'ble Board are referring to the proceedings as a whole and their respective orders as a whole. 42. The so-called delinking or splitting of the order into executive and non-executive parts appears to me to be imaginary having no basis in fact or in law. 43. Since the Show Cause Notice was issued under the Customs Act with reference to the facts and circumstances as a whole (including the Nepal-India Treaty of Transit and Agreement of Co-operation and the Order-in-Original was passed under the Customs Act and the Order-in-Appeal was also passed with reference to the aforesaid order under the Customs Act and the Revision Petition was filed with reference to the Order-in-Appeal passed under the Customs Act and the said Revision Petition has been transferred to the Tribunal in terms of Section 131B of the Customs Act and is before us as a deemed appeal under the Customs Act, it is obviously clear that the Tribunal is required to look into the facts and circumstances as a whole and to hear the submission of both sides with reference to the Order-in-Original and Order-in-Appeal as a whole under the Customs Act. ....
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....r on merits. It was his contention that in terms of the provisions of Section 131B(2), the Tribunal was competent to hear and decide only those transferred matters in which either the duty or fine or penalty was more than 10,000 rupees. In the instant case, neither any duty, nor any fine, nor any penalty is involved. Therefore, it was his contention that the jurisdiction to hear and decide the cases on merits continued to rest with the Central Govt. It was, therefore, his submission that the cases may be transferred to the Central Government. The learned Barrister Shri Saraf pleaded that this Tribunal has already passed an order with reference to the jurisdiction conferred on it in terms of Sections 129A & 129B read with Section 13 1B. This is apparent from the first paragraph as well as the last paragraph and the operative part of the order. Therefore, once this issue has been decided, it cannot be reopened and the Tribunal was bound to proceed further in the matter in terms of its own order. It was his submission that it was open to the other side to have raised this point and urge it during the course of previous hearing, but they, having chosen not to raise this issue, ca....
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.... Section 131B(2). Shri Saraf pleaded that the maintainability is only an aspect of jurisdiction and, therefore, if the other side thought that it is the Government and not the Tribunal which was the proper authority, they should have taken up this aspect first and then sought the orders of the competent authority on the issue of maintainability. Although no duty, fine and penalty are involved, as rightly held by this Bench in its order dated 30-8-1985, a grievance still persists and an appeal lies to this Tribunal. In fact, the appellant has sufferred a huge loss of about Rs. 40 lakhs approximately (involving an amount of not less than five to seven lakhs of rupees in each of the Appeals viz. (1) CD-203/80, (2) CD-204/80 (3) CD-205/80, (4) CD-206/80 & (5) CD-207/80 - in which identical issues are involved). The goods are still in the custody of the Department and have already become dust and worthless. It was also his submission that proviso to Section 131B(2) does not apply in such circumstances. In view of the above position, he would urge that since the Tribunal has already passed an order specifically on the point of jurisdiction and referred to Section 129A and B as w....
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....or hearing on 18th March, 1986." 46. Thereafter, the matter was heard and considered on merits on 24-2-1987. The learned Member (Judicial), Shri B. Prasad has passed his order dated 10-6-1987. My order is as follows: 47. Brief stated, it is the appellants' case that they were citizens of Nepal, engaged in export business, who had purchased the Turmeric in Nepal with a view to export to Singapore. They had obtained export licences from H.M.G. of Nepal and produced the goods as well as the relevant documents before the Nepalese Customs who had found the same in order and endorsed the documents accordingly. Thereafter, they had produced the goods and the documents before the Indian Customs at Indo-Nepal border and sought permission to transit the goods across Indian territory in terms of Nepal-India Treaty of Transit (1978). The Indian border officers had examined the goods and the documents and found them in order and allowed the goods to be transported to Calcutta as per the C.T.D. in question. At Calcutta, the Customs had found the seals of the wagons intact. However, when they requested permission to ship the goods, the Calcutta Customs withheld the permission an....
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....14 of the Customs Act, '62, for attempt to export the goods improperly. The supplementary show-cause notices (repeat the points (1), (2), (3), (4) and (7) mentioned above and modify the charges by (1) invoking Section 113(d) on different grounds namely attempt to export the goods contrary to the terms of the Treaty and the Agreement of Cooperation (instead of E.T.C. orders), (2) invoking Section 113(i) [(in addition to 113(d)] on the ground of mis-declaration). Furthermore, while initial show-cause notices were based mainly on the report of NAFED Manager, the supplementary show-cause notices refer, in addition, to a booklet "What Nepal Offers" and the statement of border examiners and cross-examination of the NAFED Manager and the border examiners. Thus, the basis of the charges was sought to be expanded and the charges themselves were amended. 49. Now coming to the apparent omissions in the show-cause notices (both original and supplementary), it is observed that: (1) they do no mention or refer to any source or authority under the Customs Act, '62 (or allied laws) by which or under which cognizance of violation of the Treaty or the Agreement of Cooperation co....
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....n what basis the initial permission to ship the goods was withheld at that time? That is, what was the information, if any, available to the Calcutta Customs at the time of withholding of the shipment and on whose orders the permission was actually withheld initially? (3) the legal status of the goods pending shipment after permission had been withheld i.e. whether initial action of the Customs resulting in non-shipment amounted to detention or seizure of the goods? (4) Whether the proceedings before the Collector after the issue of the initial/original show-cause notices had remained incomplete/inconclusive or they had been duly concluded at that time. In case, they had been concluded, why no order was passed? (5) Since the supplementary show-cause notices were issued after the hearings, a question arises as to whether it was proper to do so? 50. Before examining the matter with reference to the above questions and observations it may be useful to go through the relevant portions of the Nepal-India Treaty of Transit (1978) and the Agreement of Cooperation. Article -I The contracting Parties shall accord to 'traffic in transit' freedom of transit across their r....
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....the Treaty of Transit His Majesty's Govt. of Nepal and the Govt. of India agree that the following detailed procedure shall apply to traffic in transit. EXPORT PROCEDURE When goods from Nepal are cleared from Nepalese Customs custody for export to third countries in transit through India, the exporter or his agent (hereinafter referred to as the exporter) shall be required to observe the following procedure at the corresponding Indian Border Customs Post: 1. The Senior most officer in charge of the Nepalese Customs Office at the border shall furnish the following certificate on the Customs Transit Declaration:- "I have verified that the goods specified in this declaration and of the quantity and value specified herein have been permitted to be exported by His Majesty's Govt. of Nepal under licence No...........Dated......". 2. The exporter shall prepare the Customs Transit Declaration in quadruplicate and shall present it to the Indian Customs Officer at the Customs Post through which the goods are to enter India. The Customs Transit Declaration shall contain the following particulars: (a) Name and address of the Exporter; (b) No., description, marks and serial....
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....all hand over the original copy of the Declaration to the exporter and send the duplicate and triplicate by post to the Collector of Customs Calcutta and retain the quadruplicate copy with him. 10. On arrival of the goods at Calcutta Port, the exporter shall present the original copy of the Customs Transit Declaration duly endorsed by the Customs House with the duplicate and triplicate received by it from the border. In case of goods which have moved under seals and locks, the Customs House shall check the seals and locks and where there is suspicion that they have been tampered with, will examine the goods to identify them with the corresponding Customs Transit Declaration. After the verification as contemplated in this paragraph is completed by the Customs House, it shall permit the export of the goods and will in case of goods specified in sub-para (ii) of para 3 ensure that these are duly shipped. After the goods have been shipped, the Customs House shall endorse all the copies of the Customs Transit Declaration, hand over the original to the exporter and send the triplicate copy to the Indian Customs Border Office and retain the duplicate." Agreement of Co-operation betw....
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....ods - (a) not included in the said schedule; or (b) falling within the purview of clause 15 of the Export (Control) Order, 1977; or (c) covered by an Open General Licence included in the Export Policy, 1978-79 can be made without an export licence (Vide para 3). Schedule - I includes two parts: Part 'A' - List of items export of which is not normally allowed. Part 'B' - Items export of which is allowed on merits or subject to ceiling or other conditions to be specified from time to time. Schedule - III: Open General licence. 52. The Export Policy included, inter alia, a policy statement regarding licensing policy of the items listed in the Schedule & Annexure and an explanatory note to the Policy Statement. This shows that allegations regarding violation of Export Policy and or Export (Control) Order must in the ordinary course include reference to the relevant part of the Schedule and the item number and the policy during the relevant period to be meaningful. Significance of my observations regarding non-mention of these particulars in the show-cause notices thus becomes apparent. I will touch upon the legal consequences of this omission as we p....
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....nd VIII of the Treaty of Transit between the HMG of Nepal and the Govt. of India and shipment be disallowed. I further order that the goods be confiscated under Sections 113(d) and 113(i) of the Customs Act, 1962." (Emphasis supplied). The Collector gave the appellants an option to redeem the goods on payment of a fine. He also imposed a penalty on the appellants under Section 114 of the Customs Act, 1962, "for attempting to export the goods contrary to the provision as mentioned earlier an act of commission/omission which rendered the goods liable to confiscation under Section 113 of the Customs Act, 1962." A perusal of the findings and the operative portion of the Collector's order thus shows that the Collector has not even touched upon the major issues and problems noted by us and has not dealt with the questions which obviously called for answers. 54. We will examine the matter further as we proceed. We may first look at the Board's order and see what the Board has done in this regard. The operative part of the Board's order is as under:- 'The Board has carefully considered the facts and the submissions made in the memorandum of the appeal. The Board does not fin....
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....appears to be rather sketchy and vague. It does not disclose any serious effort to weigh the evidence or examine the law. If anything, it only shows that, apparently, the Board has also not pondered upon or considered the fundamental questions involved in these cases. It has, indeed, not even discussed the cases in details and has not touched upon any of the major problems noted by us. We will examine the implications and the consequences of such an order as we proceed further. Since the show-cause notices and the Collector's order refer to certain sections of the Customs Act, it is necessary to refer to these sections and it will be useful and convenient to reproduce the relevant portions thereof which are as follows: "Section 113: Confiscation of goods attempted to be improperly exported, etc. - The following goods shall be liable to confiscation: (d) any goods attempted to be exported or brought with the limits of any Customs area for the purpose of being exported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force; (i) any dutiable or prohibited goods (or goods entered for exportation under claim for draw-back) w....
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....on 11(H). However, this Chapter applies only to specified goods which are notified in the Gazette and it is nobody's case that the goods in question before us are such specified goods. Therefore, Chapter IV-B and Section 11(H) are not relevant. This leaves us with Section 11. This section is a unique provision of the Customs Act, 1962 which links this Act with various laws and treaties etc. governing the allied areas. It is in the nature of an enabling provision by which the legislature has empowered the Govt. to utilise the Customs machinery for any of the purposes mentioned therein. It is, however, a discretionary provision and the Govt. may utilise this mechanism, if and when necessary and to the extent deemed proper by issue of appropriate notification (s). For better appreciation we may go through the relevant portion which reads as follows:- "11. Power to prohibit importation or exportation of goods:- (1) If the Central Govt. is satisfied that it is necessary so to do for any of the purposes specified in sub-section (2), it may, by notification in the official gazette, prohibit either absolutely or subject to such conditions (to be fulfilled before or after cle....
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....cordance with their declaration and the Nepalese Govt. licence and the requirements of the Indo-Nepal Treaty and, therefore, the border authorities had allowed the goods to be transited through the Indian territory; That the Collector, Customs, had also found the locks of the wagon in tact and had tallied the Originals, duplicates and Triplicates of C.T.Ds. Therefore, when they requested for shipment order the Customs should have allowed them to place the goods on board. (ii) That the Collector of Customs, Calcutta, had no authority to detain or seize the goods and to refuse shipment and that the Collector of Customs, Calcutta, was not justified in placing reliance on the opinion of the NAFED authorities and Agmark authorities and the booklet, "What Nepal Offers". (iii) That the Manager, NAFED, was not an expert and his opinion was not reliable as it does not disclose any basis or criteria. As such in view of the Supreme Court judgement reported in AIR 1959(SC) 488 the Collector should not have relied on. He should not have given his finding on the basis of such report and the Board should not have confirmed it. (iv) That Turmeric was grown on both sides of the border and ....
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....erse and biased in passing the order, inasmuch as he did not go into the details and merits of the case. (xx) That the Board having come to the finding that the case was not a fit case for confiscation of the goods or imposition of penalty, should have recorded the finding that the goods, in fact, were of Nepalese origin and they had a right to export the said goods. (xxi) That the Customs authorities at the Indo-Nepal border having permitted the entry of the said goods into India for transit as goods of Nepalese origin after making due enquiry, the goods were estopped or debarred from legitimately raising the question regarding origin of the goods at Calcutta. (xxii) That there was no material before the Ld. Collector and the Ld. Member of the Board to prove that the Turmeric which was alleged to have been exported from India was being re-exported form Nepal as goods of Nepalese origin. (xxiii) That the goods in question were the same very goods which had been exported from India to Nepal and as such the finding of the Ld. Collector and the Ld. Member of the Board was based on mere guess, surmises and conjectures. (xxiv) That none of the border examiners had i....
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....llector's finding relating to Indian origin of the goods as correct, as the Collector had based his finding on the opinion of the NAFED and Agmark authorities. It was their submission that the Collector was justified in placing reliance on the opinion of these organisations. The Departmental Representatives had pleaded that the orders may be upheld. The learned counsel for the appellants had, in reply, reiterated that the Board's order and the Collector's order may be set aside as the action was illegal ab initio and the Collector had no power to stop export and the goods were not liable to confiscation and they were not liable to any Fine or penalty. He had emphasised that they had followed the prescribed law and procedure and the stopping of the consignment was an illegal and malafide act. The Board in its findings had not discussed or evaluated the so-called evidence relied upon by the Collector. Board's reliance upon the Collector's order was mis-placed and its findings on the point of country of origin was wrong. The Collector himself was wrong in relying on the opinion of NAFED and Agmark authorities. The person who gave the opinion was not expert and his opinion was of no....
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....withheld by the Customs. The net result was that the goods could not be shipped and remained under the Customs control, and the appellants were no longer free to handle or use the goods as they pleased. In other words, the goods were, in fact, detained. 67. The fact that a detention memo was not served or the goods were not formally seized does not alter this basic position. 68. Having said that I may also menion that the Treaty undoubtedly requires the Customs Officers to ensure that the prescribed procedure is duly followed, and, therefore, the detention of the goods for verification of facts or removal of doubts was understandable. In fact, the power to detain is inherent or implied in the power to check and verify. But detention (and such prolonged detention at that) without indicating either the reasons or the authority at that time was neither fair nor proper. 69. Further, as already noticed, in so far as Articles II, VI and VIII of the Treaty and Article III of the Agreement of Cooperation cited in the show-cause notices as also in the Collector's orders are concerned, they require certain measures to be taken in pursuance of the provisions of the said Articles. ....
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....1(1) of the Customs Act, and the department has not shown that any such Notification has been issued under the said section in respect of the Nepal-India Treaty of Transit (1978) and Agreement of Cooperation. Absence of such a Notification means absence of a linkage mechanism connecting the Treaty with the Act so essential to enable the Customs officers to take action under the law. The consequence is a lacuna which appears to have gone unnoticed and could only be covered by issue of a proper notification by the Govt. of India under Section 11(1) read with Section 11(2)(r). Till this was not done, I am afraid, the Customs Act could not come into play and provisions of the Customs Act could not be invoked even in cases of proven violation of the terms of the Treaty or the Agreement of Cooperation. Therefore, in the instant cases, Sections 113(d) and 113(i) and 114 of the Customs Act, '62, were not available to the Customs for taking action against the appellants even if the violation of the Treaty was established. 75. In the instant cases actually there is no positive proof of violation of the Treaty and the Agreement, as there is no positive proof that the country of origin was ....
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.... violation of Export Policy and the Export (Control) Order was very vague and specific particulars so essential to render the charge meaningful were conspicuous by their absence. But I am all the more surprised to find that, as a matter of fact the charge in this respect was, strictly speaking, incorrect, inasmuch as the export of Turmeric from India was actually not prohibited or banned under the Export (Control) Order, 1977 and the Export Policy for the period April, 1978 to March 1979. This is evident from a perusal of the Export Policy which shows that Turmeric does not figure in Part A of the Schedule-I which is a list of items, the export of which is not normally allowed. On the contrary, it figures as item No. 18(iii) in Part B of Schedule -I of the Policy (Page 85). 81. And as already noticed, the export of items mentioned in Part-B is allowed on merits. In other words, it is not banned or prohibited, but permissible subject to fulfillment of certain conditions and, in fact, as per the statement of policy, the export of Allepcy finger Turmeric was allowed within limited ceiling in 1978-79 (page 15). Therefore, strictly speaking, the Customs officers were incorrect in sta....
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....f the goods. But even if it had, there was only one course open to the authorities that is to take recourse to the coupling mechanism between Imports and Exports (Control) Act and the Customs Act, 1962 provided by Section 3(2) of the Imports & Exports (Control) Act, 1947 and Section 11 of the Customs Act, 1962. But they have not done so. Furthermore, even this linkage would have been useful only, if a notification had been issued under Section 11(1) read with 11(2)(r) of Customs Act, 1962, and was relied upon. However, the department has refrained from utilising these provisions. This ties up neatly with our earlier observations regarding want of measures under the Treaty (and the Agreement) and the Customs Act (1962). 86. Neither the Collector nor the Board have examined these aspects and consequentially have erred in passing the impugned order. 87. Thus, I find that the department has not been able to establish any of the charges mentioned in the show-cause notices. It has not been able to show the violation of any of the terms of the Nepal-Indian Treaty of Transit (1978) or the Agreement of Cooperation or the Export Procedure prescribed in the memorandum to the Treaty of T....