BECKER GRAY & CO. (1930) LTD. & ORS. versus UNION OF INDIA & ANR.

Citation: [1970] 3 S.C.R. 445 · Decided: 23-01-1970 · Supreme Court of India · Bench: S.M. SIKRI · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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445 
BECKER GRAY & CO. (1930) LTD. & ORS. 
v. 
UNION OF INDIA & ANR. 
January 23, 1970 
[S. M. S!KRI, V. BHARGAVA AND I. D. DUA, JJ.] 
Foreign Exchange Regulation Act 7 of 1947, ss. 12(1) and 23A-
Sea Customs Acl ss, 19 and 167(8)-l/nder-va/uation of ihvoices of goods 
exported whether a violation of s. 12(1) of Act 7 of 1947-Dec/aration 
of value of goods on the basis that they were sold to buyer when in fact 
fhey were yet unsold whether a con:iravention of s. 12( 1 )-Whether penalty 
frvfoble under s. 167(8) of Sea Customs Act. 
The appellants were exporters of jute carpet backing cloth and in con-
nection with some exports by them between January 1957 and January 
1963 penalties were imposed on them under s. 167(8) of the. Sea Customs 
Act for contravention of s. 12(1) of the Foreign Exchange 
Regulation 
Act No. 7 of 1947 in view of the provisions of s. 23A of the Act and 
s. 19 of the Sea Customs Act by the Adjudicating Officer. 
Appeals to 
the Central Board of Revenue were dismissed. The Board in uplrolding 
the penalties found two defects in the declarations filed by the appellants 
in purported compilance with s. 12(1) 'of the Act 7 of 1947, namely: 
( 1) that the invoice value of the goods was shown at a figure lower than 
the real sale, value; (2) that in the declaration it was stated that the 
invoice value declared was the full export value of the goods and was 
the same as that contracted with the buyer, whereas the correct de~laration 
should have been that the declarations contained a fair valuation of the 
goods which \\-'ere unsold. 
The declarations were given in form G.R. I 
prescribed by the Rules framed under Act 7 of 1947. In appeal before 
this Court against the decision of the Board it was urged on behalf. of 
the appellants that the defects in question did not amount to contravention 
of the restrictions imposed by s. 12(1) of the Act 7 of 1947, so that 
the imposition of the penalties was not justified. 
HELD : (i) In vi~w of the decision of this Court in the case of M /.r. 
Rai Bahadur Shreeram Durga Prasad (P) Ltd. which was fully applicable. 
to the facts of the present case the imposition of the penalties on the 
basis that the under-valuation of the goods amounted to contravention of 
s. 12(1), was unjustified. [447 BJ 
Union of India v. M/s. Rai Bahadiu Shreeram Durga Prasad (P) 
Lrd. and Ors. [1969] 1 S.C. Cases 91, applied. 
(ii) The second defect found by the Board in the declarations related 
to points on which s. 12(1) does not require a declaration. A declara-
tion, which is in contravention of the Rules or the forms prescribed under 
the Rules may be penali•ed under s. 23 of the Act but such contravention 
will not attract the provisions of the Sea Customs Act. 
Under s. 23A of 
the Act 7 of 1947 only a breach of restrictions imposed by s. 12(1) of 
the. Act is to be deemed to be a contravention of restrictions imposed by 
s. 19 of the Sea Customs Act. 
An incorrect declaration in contravention 
of the Rules made under s. 27 of the Act 7 of 1947 is not to be deemed 
a contravention of any restriction imposed by s. 19 of the Sea Customs 
Act. Therefore the imposition on the appellants of penalties 
under 
s. 167(8) of the Sea Customs Act was totally unjustified. [447 C-FJ 
446 
SUPREME COURT REPORTS 
[1970] 3 s.c.R. 
CIVIL APPELi.ATE JUlllSDICTION : Civil Appeals Nos. 1178 
A. 
to 1180 of 1967. 
Appeal by special leave from the Older dated March 13, 1967 
of the Central Board of Excise and Customs 
(Appeal), New 
Delhi in appeals Nos. 47 to 50 of 1967. 
N. A. Palkhivala, P. P. Ginwala, D. N. Mukherjee, R. S. 
B 
Kumar and A. Choudhiiry, for the appellants. 
N. S. Bindra and S. P. Nayar, for the respondents. 
M. C. Chagla and D. N. Gupta, for the intervener. 
The Judgment of the Court was delivered by 
Bhargava, J.--The appellants in these appeals were exporters 
of Jute Carpet Backing Cloth and, in connection with some exports 
by them between the period January 1957 to January 1963, penal-
ties have been imposed on them under section 167 ( 8) of the Sea 
Customs Act for contravention of section 12(1) of the Foreign 
Exchange Regulation Act No. 7 ol 1947 (hereinafter referred to 
as "the Act") in view of the provisions of section 23A of the Act 
and section 19 of the Sea Customs Act by the Adjudicating Officer. 
Their appeals to the Central Board of Excise and Customs (here-
inafter referred to as "the Board") were dismjssed, though the 
amounts of penal
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