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

Citation: [2006] SUPP. 7 S.C.R. 575 · Decided: 19-10-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, A.P. 
A 
v. 
SURESH JHUNJHUNWALA AND ORS. 
OCTOBER 19, 2006 
[S.B. SINHA AND DAL VEER 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: 
Prohibited goods-Connotation of-Jn the context of Customs Act, 
1962-Discussed 
E 
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 EL T 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 of Customs, 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
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