TaxTMI 
TaxTMI 
TaxTMI 
2007 (1) TMI 77
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....of presenting himself before the Trial Court. The Commissioner of Central Excise (Adjudication) vide order dated 31-5-2006, has imposed a penalty to the tune of Rs. 50 lacs and proceedings under Section 80/81 of Cr.PC were initiated for the petitioner being declared a Proclaimed Offender. 2. Petitioner's case is that primarily, the detention order is passed for a wrong purpose inasmuch as the acts alleged against the detenu do not constitute a valid ground of detention under the COFEPOSA Act. The belated passing of the detention order, it is alleged, further demonstrates that the purpose is not preventive detention but punitive. Petitioner also assails the delay in passing of the detention order inasmuch as the premises of the petitioner were raided on 15-10-2003 and the order of detention was passed on 7-10-2004. The transactions in question are of the year 1998 and thereafter. 3. Petitioner had moved an application bearing Crl.M.No. 7537/2005 for urging additional grounds in the writ petition. Petitioner having obtained a copy of the detention order, sought to assail the same on various other grounds as could be gathered from the Detention Order. Respondents filed a reply to t....
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....er the goods had been exported to Moscow directly or had been sent through Finland. Reliance was also placed by the counsel on Jute Investment Company v. S.K. Srivastava reported at 77 Calcutta Weekly Notes page 501 to urge that destination was not a material particular and hence, the alleged wrong declaration, if any, would be of no consequence. Petitioner had initially also attempted to urge that goods which have already left India, would not be export goods within the ambit of Section 113 of Customs Act, 1962. However, in view of the subsequent Full Bench decision of the Calcutta High Court in M/s. Euresian Equipments and Chemicals Ltd. and Ors. v. The Collector of Customs and Ors. reported at 1980 (6) E.L.T. 38 (Cal.) = AIR 1980 Calcutta 188, this plea was not pressed. 5. Elaborating his submissions, Mr. Jethmalani submitted that goods were sent to Helsinki, Finland since Moscow was land-locked and had no port. The goods were transported to Moscow from Helsinki and the goods had eventually reached Moscow routed through Helsinki as confirmed by the Russian Custom Authorities. He submits that the respondents have been wrongfully contending that one of the Firms namely Europa To....
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.... documents. These inter alia relate to shipment of goods, transportation, their ultimate destination, declarations in the shipping bills and the bill of lading etc. Petitioner does not dispute that the various consignments have been shipped to Finland (Helsinki) but that it was on account of Moscow being a land-locked city and Helsinki in Finland being a convenient port. Further, the plea that the goods reached Moscow finally, is sought to be disputed by the respondents. It is neither necessary nor possible to go into these disputed questions of fact in this writ petition. 7. Let us briefly notice the case of the respondents as is sought to be made out on the basis of the submissions and written additional submissions as filed. Referring to the preamble of the COFEPOSA Act being one to provide for preventive detention in certain cases for the purposes of conservation and augmentation of foreign exchange and prevention of smuggling activities and for matter connected therewith, respondents submitted that the exports were purportedly made to Russia under the Rupee Payment Scheme and the payments were realized by the petitioner from RBI through banking channels in Indian Rupee. Inve....
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....y third country, the same would have earned the benefit of drawback, no doubt, but additionally, India would have also got foreign exchange. It is respondent's claim that by mis-declaring the country of destination as Russia, the buyers in Russia, who were managed/manipulated by the brother of the petitioner, also got the LCs at discounted prices in auctions by the Russian Government for importing goods from India under Repayment of State Credit Scheme. Respondents contend that there is sufficient evidence on record to demonstrate that the goods did not reach Russian Federation. It is contended that the drawback DEPB became unavailable firstly because of non-arrival of goods in Russia, a crucial and critical condition for eligibility for export benefit under the scheme and secondly, the proceeds received clearly became unrelatable to the exported goods and were not in the currency in which they should have been received. Respondents claim that in some shipping bills, Moscow was shown as port of discharge as well as port of destination. However, the consignments covered against these shipping bills were discharged at Kotka/Helsinki in Finland and not in Russia. Respondents have prod....
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....des in the case of goods imported or to be exported by post the entry referred to in Section 82 or entry made under regulations made under Section 84. The exporter is required by virtue of Section 50(2) of Customs Act, while presenting a shipping bill or a bill of export to subscribe to a declaration as to the truth of its content. It is the respondents' case that the petitioner made the wrong declaration in the shipping bills and the bill of lading, which amounted to mis-declaration in respect of 'material particular' and has accordingly rendered the goods liable for confiscation under Section 113(i) of the Customs Act. Respondents contend that the petitioner submitted shipping bills with the entry 'port of discharge' as Moscow while the corresponding bill of lading and airway bills proved that the actual port of discharge was Kotka/Helsinki in Finland and Bremerhaven in Germany. 9. Respondents also contend that the petitioner submitted shipping bills with false entries regarding export to consignees, who did not exist or had made no import export business. The details and statements of various concerned persons were reproduced in the show cause notice in para 5.1 at page 113 of ....
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....isions of the said scheme, the Indian exporter becomes ineligible not only for availment of any benefits under the said scheme but the export benefits availed of on such exports also become inadmissible/revocable. Therefore, mis-declaration of the port of discharge (destination) and non-arrival of goods in Russian Federation was a major, indeed critical, violation amounting to smuggling rendering goods liable to confiscation under Section 113(f) of the Customs Act. 13. Having heard learned Counsel for the parties and having noted the respective contentions as above and having gone through the pleadings on record as also the record produced, we find merit in the contention of the respondents that the mis-declaration or wrong declaration of the port of discharge in the shipping bill and the bill of lading in the present case, considering the exports being under the Repayment of State Credit Scheme and its provision would fall within the category of mis-declaration with regard to a material particular within the meaning of Section 113(i) of Customs Act and would be actionable. 14. We are, thus, of the view that the present case cannot be said to be one falling within the five situa....
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.... cases to interfere with the detention order at the pre-execution stage but the scope of interference is very limited. It was held that the courts would interfere at the pre-execution stage with detention orders only after they were satisfied of the existence of the five situations enumerated earlier. In the instant case, it is the petitioner's own contention that he has not allowed the detention order to be served on him. There have been adjudication proceedings where a fine has been imposed. Petitioner has also been declared a Proclaimed Offender and as noted earlier, it cannot be said that the respondents do not have a prima facie case or that the grounds set up by them are wholly irrelevant or extraneous. 16. Coming to the question of delay, some delay is inherent in the very nature of enforcement of a law relating to preventive detention like the COFEPOSA Act between the prejudicial activities complained of and making of an order of detention. When a person is detected in the act of smuggling, thorough investigation into all the facets is required to be undertaken with a view to determine the identity of all the persons engaged in these operations, which have a deleterious af....