LexUNION OF INDIA AND ORS. versus JAIN SHUDH VANASPATI LTD. AND ANR.
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A
UNION OF INDIA AND ORS.
v.
JAIN SHUDH VANASPATI LTD. AND ANR.
AUGUST 8, 1996
B
[S.P. BHARUCHA AND S.B. MAJMUDAR, JJ.]
Customs Act, 1962 :
,
Ss. 28, 47, 124 and 13(}-Proceedings for confiscation-Respondents
C in1pa1ting RBD Pabnoil, a pennissible iten1, in containers 111ade of stainless
steel, a banned iten1, said to have been painted over to give an inzpression
tlzat tlzey were made of mild steel-Respondents seived witlz show cause
notices u/s. 28 and u/s. 124-Wiit petition clzallenging the notices allowed by
High Cowt--Held, High Cowt e1red in holding that no show cause notices
u/s. 28 .could have been issued until and unless order u/s. 47 lzad been first
D revised u/s. 13()-It was stated that stainless steel containers were painted over
to suppress their tnte nature in order to slip the111 through custo111-An order
u/s. 47 obtained fraudulently does not have to be set aside by e.-,,:ercise of
revisional powers u/s. 130 before the ill-effects of the fraud can be set right by
initiation of the process of confiscation of tlze fraudulently cleared goods u/s.
E 124-Higlz Cowt should not lzave allowed the wlit petition without reserving
liberty to tlze appellants to proceed against tlze respondents u/s. 130--Judg-
ment and order of Hig/1 Cowt set aside-Proceedings pumwnt to slzow cause
notices u/ss.28 and 124 slza/l continue.
F
Constitution of India, 1950 :
A1tic/e 226-Writ jurisdiction-Scope of-Respondents impo1ting RBD
Paln1oil, a pennissible ite111, in containers 111ade of stainless steel, a banned
Item-Notices u/ss. 28 and 124 of Customs Act served on respondents--High
Court quaslzing the notices-Held Court ouglzt not to have entered into the
G tlzicket of evidence-It is for the authorities hearing tlze parties u/ss.28 and 124
to accept and weigh the evidence-High Court in exerci.re of powers under
Article 226 slzould not slllltify, an investigation, still at the show cause stage
by going into facts.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2360 of
H 1980.
418
'
'
•
U.0.1. v. JAIN SHUDH V ANASPATI LID.
419
From the Judgment and Order dated 22.8.80 of the Delhi High Court A
in C.M. No. 282/80 in C.W.P. No. 158 of 1980.
AK. Ganguli, A. Subba Rao and C.V. Subba' Rao for the Appellants.
Dinesh Kumar Garg and Gagrat & Co. (N~) for the Respondents.
B
The following Order of the Court was delivered :
The 1.,t, respondents imported RBD palm oil during the period
November, 1978, to March 1979, and cleared the same in the quantity of
13,500 metric tonnes. Import of the said oil was permissible. On 11th
October, 1979, the 1sl, respondents were served with show cause notices C
under Section 28 of the Customs Act and, on 21st January, 1980, with show
cause notices under Section 124 thereof. The show cause notices stated that
the said oil had been imported in containers made of stainless steel, which
was a banned item, but which had been painted over to give the impression
that they were made of mild steel. Thus, Customs duty had not been levied D
and the stainless steel containers were liable to be confiscated. The respon-
dents were required to show cause there against. The respondent filed a
writ petition in the Delhi High Court on 8th February, 1980, impugning the
issuance of the Section 28 and Section 124 show cause notices. On 22nd
August, 1980 the High Court allowed the writ petition.
This appeal is d;_rected against the judgment and order of the High
Court. When special leave was granted on 9th October, 1980 this Court
ordered that the stainless steel containers which had been seized by the
appellants would continue to remain under seizure and he kept in the
factory premises of the 1st, respondents under the supervision of a Customs
Officer. We are told that they so remain.
For completeness, it is necessary to mention that the appeal was
dismissed on 28h November, 1991, but on the review petition of the
appellants, that judgment and order was set aside and the appeal was
directed to be heard afresh, which is how we come to hear it.
The High Court based its judgment on material produced by the
respondents before it to show that modern marketing practice required the
movement of refined oil only in stainless steel or epoxy-coated tanks. It
found that the material acceptable, particularly because one o{ the letters
E
F
G
that the respondents produced had been written by the State Trading H
420
SUPREME COURT REPORTS [1996] SUPP. 4 S.C.R.
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