Holding

The Supreme Court held that "prohibited goods" under Section 2(33) include goods whose export is prohibited by any law, making the seized garments liable to confiscation, and that the Tribunal erred by not considering the Foreign Exchange Regulation Act violations.

Summary

The appellants, exporters of garments under the Duty Entitlement Pass Book (DEPB) scheme, filed shipping bills claiming export benefits, but the goods were intercepted and found to be cheap garments grossly mis‑declared and heavily over‑invoiced. The Commissioner of Customs ordered confiscation of the goods under Section 113(d), (h) and (i) of the Customs Act, 1962, deeming them "prohibited goods". The Customs, Excise & Service Tax Appellate Tribunal held that the goods were not prohibited and that over‑valuation was not proved due to lack of expert evidence, thus setting aside the confiscation. On appeal, the Supreme Court held that the definition of "prohibited goods" in Section 2(33) is broad and includes goods whose export is prohibited under any law, and that the Tribunal failed to consider possible violations of the Foreign Exchange Regulation Act. Consequently, the Court allowed the appeal, set aside the Tribunal’s order and remitted the matter for fresh consideration. The Court also emphasized that over‑valuation and false declaration under the Foreign Exchange Regulation Act are relevant to confiscation.

Issues considered

Whether the seized garments qualify as "prohibited goods" under Section 2(33) of the Customs Act, 1962, making them liable to confiscation under Section 113(d), (h) and (i).
Whether the Tribunal erred in holding that over‑valuation was not established in the absence of expert testimony.
Whether a violation of the Foreign Exchange Regulation Act, 1973 (Sections 15 and 18) and the 1993 Foreign Trade Rules is a ground for confiscation.
Interpretation of the term "prohibited goods" – does it extend to goods prohibited under any other law.
Whether the Tribunal should have examined the exporters' compliance with export‑value declaration provisions.

Legislation cited

Customs Act, 1962s. 113(d), s. 113(h), s. 113(i), s. 2(33), s. 50
Foreign Exchange Regulation Act, 1973s. 15, s. 18

Subjects

Prohibited goodsCustoms ActSection 113DEPB SchemeExport over‑valuationForeign Exchange Regulation ActConfiscationExport fraudCustoms Tribunal

Judgment

COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, A.P. A
v.
SURESH JHUNJHUNWALA AND ORS.

OCTOBER 19, 2006

[S.B. SINHA AND DALVEER BHANDARI, JJ.] B

Customs Act, 1962:

Sections 2(33), 50, II3(d), (h) and (i)-Prohibited goods-Exporters
filed shipping bills for claiming export benefit under DEPB scheme-Goods C
found to be over valued-Cotifiscation-Tribunal held that goods being not
prohibited ones were not liable to cotifiscation-On appeal, held: Tribunal
had not considered that prohibited goods are not only goods, which are
subject to any prohibition under the Customs Act, but also any other law for
the time being in force-Also, Tribunal ought to have considered as to D
whether exporters had violated the provisions of the Foreign Exchange
Regulation-Matter remitted back for fresh consideration-Foreign Exchange
Regulation Act, 1973-Sections 15, 18-Foreign Trade (Development and
Regulation) Rules, 1993-Rule I/.

Words and phrases:
E
Prohibited goods-Connotation of-Jn the context of Customs Act,
1962-Discussed

The respondents are exporters of Maxis. They filed shipping bills for
claiming export benefit under the DEPB Scheme. The consignment was
intercepted at Chennai. Upon examination, it was found that cheap garments F
were being exported by grossly mis-declaring the description and heavily over-
invoicing the value under the said scheme. The goods were seized. The
Commissioner found that respondents had committed fraud and ordered
confiscation of goods in terms of S.113 of Customs Act. On appeal, Tribunal
held that the goods being not prohibited ones were not liable to confiscation G
under the said provision, and further held that overvaluation had not been
established as expert evidence was not led and cross-examination of witnesses
had not been permitted.

In appeal to this Court, question for consideration is whether the seized
575 H
576 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A goods are 'prohibited goods' and thus liable to confiscation under S. I 13(d),
(h) and (i) of Customs Act, 1962.

Allowing the appeal and remitting the matter to the Tribunal for fresh
consideration, the Court

B HELD: I.I. The 'Prohibited goods' are defined in Section 2(33) of
Customs Act, 1962. The definition is a broad one. The said provision not
only brings within its sweep an import or export of goods, which is subject to
any prohibition under the said Act, but also any other law for the time being
in force. The Tribunal does not appear to have considered the matter from
C this angle. Power to confiscate, thus, would arise under both the situations.
(580-A-B; F-G(

1.2. The Tribunal should have considered the matter from another angle,
namely, as to whether Respondents have violated the provisions of the Foreign
Exchange Regulation or not As regards, the finding arrived at by the Tribunal
D that Respondents had not over-valued the goods, inter alia. on the ground that
no expert opinion regarding the value of the export goods had been adduced,
the Tribunal did not advert to the materials which had been brought on records
during investigation, whereupon the Commissioner relied upon.
(585-H; 586-A-B)

E Commissioner of Customs (EP), Mumbai v. Prayag Exporters Pvt. Ltd.,
(2003) 155 ELT 4 SC; Om Prakash Bhatia v. Commissioner of Customs, Delhi,
(2003) 155 EL T 423; Union of India and Ors. v. Mis. Rai Bahadur Shreeram
Durga Prasad (P.) Ltd. and Ors., (1969) 1 SCC 91; Prayag Exporters Pvt.
ltd. v. Commissioner ofCustoms, Mumbai, (2000) 121ELT819; Badriprasad
Pvt. Ltd. v. CCE, (1995) 80 ELT 624; Shilp Export v. CCE, (1996) 83 ELT 302
F and The Collector of Customs, Madras v. Nathe/la Sampathu Chetty and Anr.,
(1962) 3 SCR 186, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1372 of2006.

From the Final Order No. A/4-6/WZB/2005/C-lll dated 17.9.2004 of the
G Customs, Excise & Service Tax Appellate, West Zonal Bench at Mumbai in
Appeal Nos. C/660 to 662/2004.

K. Swami and B. Krishna Prasad for the Appellant.

M. Chandrasekharan, Hari Shankar and Rajesh Kumar for the
H Respondents.
COMMNR. OF CENTRAL EXCISE& CUSTOMS, A.I'. r. SURESHJHUNJHUNWALA [S.B. SINHA.J.] 577

The Judgment of the Court was delivered by A
S.B. SINHA, J. Mis Ganesh Yarntex Export Private Limited filed six
shipping bills under the Duty Entitlement Pass Book Scheme (DEPB Scheme)
bearing Nos. 136 to 141 dated 06.01.200 I. Mis Aadee Exports & Imports,
Secunderabad filed five shipping bills bearing Nos. 142 to 147 dated 06.01.2000.
They declared their address as 'c/o ABC, II Floor, YMCA Complex, Sardar B
Patel Road, Secunderabad. All the said shipping bills were filed for post
export benefit under the DEPB Scheme claiming credit rate @ 15% vide SI.
No.20(iii) of the DEPB Credit List, Product Group No.89 read with EXIM
Policy. The goods were declared as "Dyed Printed Night Wears (Maxis)" in
various sizes/colours. The value of the goods was claimed to be Rs.41 lakhs C
@US$ 6.40 per piece. The total FOB value of the consignment was declared
to be US$ 5,84,064/- (Rs.2.72 crores) approximately. The consignment was
made in the name of Mis Reemj Al Maha Trading Est., Dubai, UAE.

It was allegedly found that cheap garments were being exported by
grossly mis-declaring the description and heavily over-invoicing the value D
under the said Scheme by the aforementioned two finns. The goods were
intercepted at Chennai. Upon examination, it was found that all the goods
were ladies nightwear shaped garments and were found to be small, uneven
and unshaped which could not be worn by any person of any age including
children. The goods were purchased from Bombay and sent to Hyderabad to E
be loaded in a vessel at Chennai for export to Dubai. They were seized.

A show cause notice was issued on 18.07.2001 directing Respondents
to show as to why :

"(i) the goods sought to be exported in the name of Mis Ganesh F
Yarntex Exports (P.) Ltd. and Mis Aadee Exports (P.) Limited and
Mis Aadee Exports & Imports vide shipping bill nos. 136 to 146
all dated 6.1.200 I through !CD Hyderbad with a declared FOB
value of Rs.2.72 crores should not be denied to be exported
under DEPB Scheme and the DEPB credit totally amounting to
Rs.41,06,700/- should not be denied; G
(ii) The declared value of US$ 6.40 per piece in the above said
shipping bills should not be rejected;
(iii) The goods covered under the said Shipping Bills seized at Chennai
port on 24.1.2001 should not be confiscated under sections 113(d), H
l l 3(h) & l l 3(i) of the Customs Act, 1962;
578 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A (iv) The goods seized vi de panchnama dt. 24.2.200 I at Plot No. 18,
Paigah Colony, S.P. Road. Secunderabad should not be confiscated
under Section 113( d) of the Customs Act ibid; and
(v) A penalty should not be imposed on each of them under section
l I4(i) of the Customs Act, 1962.''
B
The Commissioner of Customs and Central Excise, in its order dated
31.03.2004 opined:

"!. The impugned goods sought to be exported vide S.B. nos.136 to
146 all dated 6.1.2001 with a declared value of Rs.2. 7 crores is
c denied to be exported under DEPB scheme and DEPB credit
amounting to Rs.41,06, 700/- is denied as the declared value of US
$ 6.4 per piece is also rejected.
2. The impugned goods as mentioned above are confiscated under
section l 13(d), (h) & (i) of the Customs Act, 1962 and in terms
D of Section 125 ibid they are ordered to be released on payment
of Redemption fine of Rs.5,00,000/- (Five lakhs only). The option
to redeem the goods should be exercised within one month from
the date of receipt of this order.
3. The goods seized vide panchnama dt. 24.2.2001 at Plot No.IS,
E Paigah Colony, Secunderabad are confiscated under Section 113(d)
of the Customs Act, 1962 and in terms of Section 125 ibid I order
release of the same on payment of redemption fine ofRs.5,00,000/
- (Rs. Five lakhs only). The option to redeem the goods should
be exercised within one month from the date of receipt of this
order.
F
4. In terms of Section l l 4(i) of the Customs Act, 1962, I impose
penalties on Noticees as follows :
(a) Mr. Suresh Jhunjhunwala Rs.40,00.000/- (Rs. Forty lakhs only);
(b) Mr. Deepak Jhunjhunwala Rs.30,00,000/- (Rs.Thirty lakhs only);
G
(c) Mr. Sachin Jhunjhunwala Rs.25,00,000/- (Rs. Twenty five lakhs
only)
(e) C. Satyyapal Reddy Rs.5,00,000/- (Rs. Five lakhs only);"

While arriving at the said findings, the Commissioner relied upon the
H statements of various witnesses and other documents. The materials relied
COMMNR. OF CENTRAL EXCISE & CUSTOMS, A.P. 1· SU RESH JHUNJHUNWALA {S.B. SINHA, J.] 579

upon by him to detennine acquisition, financial dealings , the low quality of A
the garments and the intent to obtain undue benefit of DEPB Cred it Facility
fraudulently were said to be based on physical examination of goods, statements
of suppliers, customs house agents, staff employed by Respondents and
Respondents themselves. It was found that Respondents have committed a
fraud.
B
He, therefore, directed confiscation of the goods in tenns of Section 113
of the Customs Act. An appeal thereagainst was preferred by Respondents
before the Customs, Excise & Service Tax Appellate Tribunal. By reason of
the impugned judgment and order dated 17.09.2004, the Tribunal concluded
that the goods being not prohibited ones were not liable to be confiscated C
under the said provision. It was further held that over-valuation had not been
established as no expert evidence was led and no cross-examination of the
witnesses had been penn itted.

Mr. K. Swami, learned counsel appearing on behalf of Appellants, would
contend that the Tribunal committed a serious error in relying upon the D
decision of this Court in Commissioner of Customs (EP), Mumbai v. Prayag
Exporters Pvt. Ltd., (2003) I 55 EL T 4 SC, although the matter is squarely
covered by another decision of this Court in Om Prakash Bhatia v.
Commissioner of Customs, Delhi, (2003) 155 ELT 423 [2003] 6 SCC 161.

Mr. M. Chandrasekharan, learned Senior Counsel appearing on behalf E
of Respondents, on the other hand, would submit that the decision of this
Court in Om Prakash Bhatia (supra) was rendered in a case involving drawback,
whereas in the instant case involves a case of DEPB Scheme and, thus, the
decision in Prayag Exporters (supra) is applicable to the facts of the present
case.
F
It is stated at the bar that a review application was filed in Prayag
Exporters (supra) drawing the court's attention to the subsequent decision
of this Court in Om Prakash Bhatia (supra), but the same had been dismissed,
as would appear from (2004) 163 ELT 113.
G
Drawing our attention to a decision of this Court in Union of India and
Ors. v. Mis Rai Bahadur Shreeram Durga Prasad (P) Ltd. and Ors., [1969]
I SCC 91, learned counsel would contend that in view of the fact that such
export was pennissible in terms of contract and Respondents had received the
amount in question, the provisions of any law far less the provisions of the
H
580 SUPREME COURT REPORTS [200t;j SUPP. 7 S.C.R.

A Foreign Exchange Regulation Act and the rules framed thereunder were not
required to be followed.

"Prohibited goods" have been defined in Section 2(33) of the Customs
Act (for short "the Act") to mean :

B "Prohibited goods" means any goods the import or export of which
is subject to any prohibition under this Act or any other law for the
time being in force but does not include any such goods in respect
of which the conditions subject to which the goods are permitted to
be imported or exported have been complied with."

C Section 50 of the Act provides for entry of goods in the following terms:

"50. Entry of goods for exportation.-(]) The exporter of any goods
shall make entry thereof by presenting to the proper officer in the case
of goods to be exported in a vessel or aircraft, a shipping bill, and in
the case of goods to be exported by land, a bill of export in the
D prescribed form.

(2) The exporter of any goods, while presenting a shipping bill or
bill of export, shall at the foot thereof make and subscribe to a
declaration as to the truth of its contents."

E Section 113 of the Act refers to confiscation of goods in certain
circumstances, clause (d) whereof reads as under :

"(d) any goods attempted to be exported or brought within 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
F time being in force;"

The definition of prohibited goods is a broad one. The said provision
not only brings within its sweep an import or export of goods which is subject
to any prohibition under the said Act; but also any other law for the time
being in force.
G
The Tribunal does not appear to have considered the matter from this
angle. Power to confiscate, thus, would arise under both the situations.

In Prayag Exporters Pvt. Ltd. v. Commissioner of Customs, Mumbai,
(2000) 121 EL T 819 the Tribunal proceeded on the basis that clause (d) of
H
COMMNR. OF CENTRAL EXCISE& CUSTOMS. A.P "· SURESH JHUNJHUNWALA (S.B. SINHA, J.] 58 J

Section 113 of the Customs Act would not apply to cases where the export A
of goods is prohibited. The Tribunal in arriving at the said conclusion referred
to two of its earlier decisions in Badriprasad Pvt. Ltd. v, CCE, (1995) 80 EL T
624 and Shilp Export v, CCE, (1996) 83 ELT 302.

This Court in Prayag Exporters (supra), dismissed the appeal of the
Commissioner of Customs, stating : B
"This appeal is filed against the judgment and order dated 18th
August, 2000 passed by the Customs, Excise & Gold (Control)
Appellate Tribunal, Western Zonal Bench at Mumbai in Appeal No.Cl
I 95N/2000-Bom,, whereby the Tribunal has arrived at the conclusion
that it has taken consistent view that Clause (d) of Section 113 of the C
Customs Act would apply in cases of prohibited goods and would not
apply to the facts of the present case. Admittedly, goods in question
are not prohibited for export and no· export duty is leviable on the said
goods. In this view of the matter, no interference is called for with the
impugned judgment and order. Hence, this appeal is dismissed." D
However, it appears, the same Bench considered the matter at some
length in Om Prakash Bhatia (supra) and opined that the exporters were
obliged to declare the value of the goods. In a detailed judgment, this Court
not only took into consideration the provisions of the Customs Act, but also
the provisions of Section 15 of the Foreign Exchange Regulation Act and the E
rules framed thereunder, as also the notifications issued by the Central
Government from time to time. The Court opined that for determining the
export value of the goods, it is necessary to refer to the meaning of the word
"value" as defined in Section 2(41) of the Act, and the same must be determined
in accordance with the provision of sub-section (I) of Section 14, stating : F
" .... Section 14 specifically provides that in case of assessing the
value for the purpose of export, value is to be determined at the price
at which such or like goods are ordinarily sold or offered for sale at
the place of exportation in the course of international trade, where the
seller and the buyer have no interest in the business of each other G
and the price is the sole consideration for sale. No doubt, Section 14
would be applicable for determining the value of the goods for the
purpose of tariff or duty of customs chargeable on the goods. In
addition, by reference it is to be resorted to and applied for determining
the export value of the goods as provided under sub-section (41) of
Section 2. This is independent of any question of assessability of the H
582 SUPREME COURT REPORTS (2006] SUPP. 7 S.C.R.

A goods sought to be exported to duty. Hence, for finding out whether
the export value is truly stated in the shipping bill, even if no duty
is leviable, it can be referred to for determining the true export value
of the goo~s sought to be exported."

The ingredients of the aforementioned provision read with Section 18
B of the Foreign Exchange Regulation Act were analyzed and the law was laid
down stating:

"(a) The exporter has to declare the full export value of the goods
(sale consideration for the goods exported).

c (b) The exporter has to affirm that the full export value of the
goods will be received in the prescribed manner.

(c) If the full export value of the goods is not ascertainable, the
value which the exporter expects to receive on the sale of the goods
in the overseas market.
D (d) The exporter has to declare the true or correct export value of
the goods, that is to say, the correct sale consideration of the goods.
Criterion under Section 14 of the Act is the price at which such or
other goods are ordinarily sold or offered for sale in the course of
international trade where the seller and the buyer have no interest in
E the business of each other and the price is the sole consideration for
sale or offer for sale."

This Court did not stop there, but also took into consideration the
provision of Rule 11 of the Foreign Trade (Development and Regulation)
Rules, 1993, holding :
F
"Hence, in cases where the export value is not correctly stated,
but there is an intentional overinvoicing for some other purpose, that
is to say, not mentioning the true sale consideration of the goods,
then it would amount to violation of the conditions for import/export
of the goods. The purpose may be money-laundering or some other
G purpose, but it would certainly amount to illegal/unauthorised money
transaction. In any case, overinvoicing of the export goods would
result in illegal/irregular transactions in foreign currency."

It may be true that the said decision related to a matter concerning a
H drawback scheme, but a decision of this Court interpreting a different section
COMMNR. OF CENTRAL EXCISE& CUSTOMS, A.P. 1·. SURESH JHUNJHUNWALA [S.B. SINHA, J.] 583

by itself cannot, in our opinion, be brushed aside, only on the ground that A
the decision of the same bench in Prayag Exporters (supra) is applicable
being related to DEPB Scheme. The question, in our opinion, has to be
considered having regard to the provisions of the definition of the 'prohibited
goods', 'entry of goods' together with the provisions of the Foreign Exchange
Regulation Act.
B
In Rai Bahadur Shreeram Durga Prasad (supra) relied upon by Mr.
Chandrasekharan, the question which came up for consideration was as to
whether Respondents therein could be said to have made any false declaration
in contravention of Section 12(1) of the Foreign Exchange Regulation Act, as
he had declared the full export value, although he did not furnish all the C
particulars. Hegde, J, speaking for the majority opined :

"The contravention of the above provisions is punishable under
Section 23. Hence the respondents' failure to repatriate any part of the
foreign exchange earned by them by the sale of the manganese ore
exported can be penalised by imposing on them a penalty not exceeding D
three times the value of the foreign exchange in respect of which the
contravention had taken place or Rs. 5000 whichever is more as may
be adjudged by the Director of Enforcement in the manner provided
in the Act. Hence it is open to the Director of Enforcement to levy
on such of the respondents as have contravened Section 12(2), penalty
not exceeding three times the value of the foreign exchange not E
repatriated which in the present case can be about nine crores of
rupees. They may also be punished under Section 23(1)(b). This
position is conceded by the counsel appearing for the appellants. But
it is urged on behalf of the appellants that for the offences committed
by the respondents they are not only liable to be punished under F
Section 23 but also under Section 23(A). The Appellate Bench of the
Madras High Court negatived that contention. Section 23(A) as it
stood at the relevant time provided that -

"without prejudice to the provisions of Section 23 or any other
provision contained in this Act, the restrictions imposed by ... sub- G
section (I) of Section 12 ... shall be deemed to have been imposed
under Section 19 of the Sea Customs Act, 1878, and all provisions of
that Act shall have effect accordingly, except that Section 183 thereof
shall have effect as iffor the word 'shall' therein the word 'may' were
substituted'.'
H
584 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A We may, however, notice that Sikri J. in his minority opinion stated :

"Coming now to the construction of Section 12(1 ), it seems to me
that what it requires is a declaration of some actual figure which
according to the declarant represents "the full export value". Otherwise
there is no point in requiring support of such evidence as may be
B prescribed. Further it is clear that some actual figure has to be
mentioned when the exporter declares that he has received the amount
representing the full export value. I apprehend that the same applies
in the case where the amount has not yet been received. The rules
make this clear. Rule 5(2)(ii) which requires the invoice value stated
in the declaration to be the full export value of goods, is referrable to
c Section 12(1) of the Exchange Act and may be taken to indicate that
an actual figure has to be mentioned. It may be an estimate if the
goods have not been sold before the export, but a figure must be
indicated.

27. Coming to the crux of the problem, does Section 12(1) by itself
D
require absolutely correct particulars? It is said that Section 12( I)
does not require it for Section 22 requires the exporter only to make
a declaration "which he knows or has reasonable cause to be false or
not true in any material particulars." How could it be that if Section
12(1) itself requires absolutely correct particulars. Section 22 limits the
E requirement? It seems to me that there is force in this contention but
only to a limited extent. Section 12(1) and the notification, dated
August 4, 1947, made under it, impose a conditional prohibition. The
section confers a power on an exporter to lift the bar by a unilateral
declaration. When such a power is conferred on an exporter by a
statute, good faith on his part must at least be implied and be a
F condition pre-requisite. This construction is necessary in order to
prevent abuse of the power given by the Act. (See Maxwell on
Interpretation of Statutes, I Ith Edn., p. 116). If the exporter makes a
deliberately false declaration he contravenes Section 12( I) because he
has not made the statutory declaration in good faith. It is not necessary
G to say that the declaration becomes a nullity because the breach of
good faith, a condition prerequisite, is itself a contravention of the
conditional prohibition or restriction, within Section 167(8) of the Sea
Customs Act, read with Section 23-A and Section 12(1) of the Exchange
Act. Clerical mistakes and mistakes made bona fide even in respect
of material pa1ticulars are not within the mischief of Section 12( I), but
H
COMMNR. OF CENTRAL EXCISE & CUSTOMS, A.P. 1·. SURESH HIUNJHUNW ALA [S.B. SINHA, J.] 585

a deliberate falsehood and a deliberate evasion of the provisions of A
Section 12(1) come within Section 12(1). Otherwise the ambit of Section
12(1), read with Section 23-A, would be narrowed to the point of
extinction. An exporter and persons concerned in the export could
with impunity give a deliberately false declaration but in apparent
compliance with Section 12(1 ), and deprive th is country of foreign
exchange. I cannot give an interpretation which will make a mockery B
of the section. But it is said that other sections of the Exchange Act
will take care of such an exporter. He can be prosecuted under Section
23(1-A), read with Section 22. He can be sentenced to imprisonment
which may extend to two years. He can also be fined to an unlimited
extent. The Foreign Exchange lost can be retrieved by a court acting C
under Section 23(1-B). This may be true that the exporter is liable as
stated above. But what about persons concerned in the illegal export?
It is the persons concerned in the export which in most cases enable
the exporter to successfully evade the provisions of the Exchange
Act. These persons are taken care of only under the Customs Act. If
they are covered by Section 167(8), there is no reason to exclude the D
exporter himself. It is not unusual to make persons liable both to
penalties under the Sea Customs Act and the Exchange Act. It is
indeed conceded that if no declaration is given under Section 12( I)
and the goods are exported, the exporter and the persons concerned
in the export would be liable to be proceeded both under Section E
167(8) of the Sea Customs Act and the Exchange Control Act. I can
draw no distinction between such an exporter and an exporter who
gives a deliberately false declaration for the purpose of the applicability
of Section 167(8) of the Sea Customs Act."

It is interesting to note that in The Collector of Customs, Madras v. F
Nathella Sampathu Chetty and Anr., (1962] 3 SCR 786, this Court opined:

" ... We hold therefore that when a notification issued under s.8(1) of
the Foreign Exchange Regulation Act is deemed for all purposes to
be a notification issued under s. 19 of the Sea Customs Act, the
contravention of the notification attracts to it each and every provision G
of the Sea Customs Act which is in force at the date of the notification."

In view of the order proposed to be passed by us, we do not intend
to enter into the factual controversy of this matter any further. The Tribunal,
in our opinion, should have considered the matter from another angle, namely,
H
586 SUPREME COURT REPORTS (2006] SUPP. 7 S.C.R.

A as to whether Respondents have violated the provisions of the Foreign
Exchange Regulation or not. As regards, the finding arrived at by the Tribunal
that Respondents had not over-valued the goods, inter alia, on the ground
that no expert opinion regarding the value of the export goods had been
adduced, the Tribunal did not advert to the materials which had been brought
B on records during investigation, whereupon the Commissioner relied upon.

We are, therefore, of the opinion that the impugned judgment cannot
be sustained, which is set aside accordingly. The appeal is allowed. The
matter is remitted to the Tribunal for consideration. thereof afresh. No costs.

C D.G. Appeal allowed.