R.C. Lahoti, J.
1. The petitioner is a bullion dealer in Dubai and a major exporter of bullion to India. In July, 1998 the petitioner received an order for supply of gold from Shri Ganesh Exports, New Delhi. Pursuant to the order so received, the petitioner dispatched a consignment consisting of 200 TT bars of gold. The documents were forwarded to the Punjab National Bank, Okhla Indl. Estate, New Delhi instructing the bankers to retire the documents against cash. The consignment having reached New Delhi Air Cargo Complex by Air India flight on 24.7.98, the Customs Authorities got suspicious because the telephone numbers of the Bank as well as those of the notified consignee as entered on the Airway Bill were of 6 digits. Enquiries from the Mahanagar Telephone Nigam Ltd. confirmed that the said telephone numbers were not in existence in any location of Delhi. The notified consignee was not found at the given address. The bankers were also not in a position to identify or provide the whereabouts of the consignee.
2. The Dubai exporter apprehended as having been duped by someone in sending the consignment. It instructed M/s. M.D. Overseas Ltd. of Connaught Circus, New Delhi to have the goods cleared to itself. Instructions were issued by the exporter to the bankers to retire the documents on cash against delivery In favour of M/s. M.D. Overseas who were also requested to file the bill of entry and lift the consignment. The Customs Authorities summoned Shri Satish Bansal of M/s. M.D. Overseas under Section 108 of the Customs Act. Shri Satish Bansal stated that he was claiming consignment by way filing the bill of entry at the request of the supplier with whom he had regular and long standing business relations and who had sent him an amended invoice pertaining to the said consignment alongwith a request for amendment of the airway bill and a letter stating that the original consignee was not taking delivery of the gold.
3. The Custom Authorities have seized the gold forming a reason to believe that the gold having been imported in the name of a fictitious importer was liable to be confiscated under Section 111(m) of the Customs Act, 1962.
4. M/s. M.D. Overseas Ltd. made a request on 4.8.98 followed by a request from the petitioner on 7.8.98 to the Customs Authorise that the goods lying uncleared may either be released to M/s. M.D. Overseas Ltd. or be re-exported back to Dubai. As none of the two prayers has been acceded to by the Customs Authorities, the present petition has been filed on 17.8.98 seeking a writ of mandamus to the respondents to permit clearance of the goods covered by Airway Bill No. 098- 7310-1044 and re-export the same to the country of origin i.e. Dubai or to permit resale of the goods to some consignee.
5. Mr. Pradeep Jain, the learned Counsel for the petitioner has placed implicit and forceful reliance on the law laid down by the Supreme Court in Union of India v. Sampat Raj Dugar (1992) 58ELT 163 (SC).
6. Mr. Jayant Bhushan, the learned Counsel for the respondents has opposed the petition supporting the counter filed on behalf of the respondents. He has referred to the definition of terms 'import' and 'importer' as defined in Clauses (23) and (26) of Section 2 of the Customs Act. 'Import' is brining into India from a place outside India. 'Importer' in relation to any goods at any time between their importation and the time when they are cleared for home consumption includes any owner or any person holding himself out to be the importer. Under Clause (d) of Section 111 any goods imported or attempted to be imported contrary to any prohibition and under Clause (m) any goods which do not correspondence in respect of value or any other particular with the entry made under the Customs Act are liable to confiscation.
7. Mr. Jayant Bhushan also referred to Export and Import Policy 1stApril, 1997 to 31st March, 2002 where under gold can be imported subject to special import license for gold. Accordingly, the learned Counsel submitted that the exporter should have taken care to verify that the importers i.e. Shri Ganesh Exports had a valid license with them before placing the order for the import and then only should have exported the gold to India. Inasmuch as the particulars as to the importer, as given in the Airway Bill are found to be incorrect, the same being a non-existent person and therefore certainly not having an import license, the goods are liable to be confiscated and hence have been validly seized. In any case the investigation is on and this Court would not exercise its writ jurisdiction so as to intermeddle with the statutory investigation and release the seized goods unless it be satisfied that the seizure was without jurisdiction or apparently unjustified.
8. The learned Counsel for the petitioner has on the other hand submitted that special import license for gold is a freely transferable license; it need not be in the name of a particular individual. The consignment was "cash against delivery". The exporter was not necessarily called upon to enquire about the availability of a valid license in the hands of the importer while honoring the import order received by it and it was enough if the consignment was 'cash against delivery' which would essentially require production of valid import license by the consignee while retiring the documents and submitting the bill of entry for clearance of the consignment. He also submitted that the petitioner-exporter which is a reputed bullion exporter having been duped or fallen prey to fortuitous circumstances and exported the gold to India should not be made to suffer by incurring demurrage, which is mounting de diem. The petitioner could find out another dealer in India I holding a valid license in his hands and prepared to retire the documents by 'cash against delivery' and submitting the bill of entry. He was forced to withdraw the bill of entry in view of the Customs officials having roped him also in the investigation. The title of the goods is still with the exporter and hence re-export to itself should not be denied which can be done without violating the law. The learned Counsel also submitted that the petitioner was agreeable to furnish a Bank guarantee in an amount corresponding to the value of the consignment which would protect the interest of the revenue in the event of the goods ultimately being I held liable to confiscation but that would relieve the exporter from being saddled with demurrage multiplying every day and which may on account of delay assume a disproportionate dimension.
9. In Sampat Raj Dugar's case (supra), 'I', an importer in India was having an import license of raw-silk which was granted subject to a condition which was later on found to have been not fulfilled by her. 'E', an Indian national resident at Hong Kong and doing business there, exported raw-silk to 'I' and sent the requisite; documents to the bankers with instructions to deliver the same to 'I' on receiving the payment. I failed to make the payment and receive the documents. 'E' submitted that he was not a party to the misuse of earlier imports by 'I' nor was he aware of the alleged (Control) Act, 1947 and Imports Control Order, 1954 were also referred. Vide para 19 their Lordships took up the question of title to the said goods for consideration and held that since 'I' did not pay for and receive the documents of the title she did not become the owner of the said goods, which meant that 'E' continued to be the owner. The definition of Importer in Section 2(26) of the Customs Act was not really relevant to the question of title. Their Lordships further held:
"The exporter is outside the country, while the importer, i.e., the licensee is in India. It is at the instance of the licensee that the goods are imported into this country. Whether or not he is the owner of such goods in law, the Imports (Control) Order creates a fiction that he shall be deemed to be the owner of the such goods from the time of their import till they are cleared through Customs. This fiction is created for the proper and effective implementation of the said order and the Imports and Exports (Control) Act. The fiction however cannot be carried beyond that. It cannot be employed to attribute ownership of the imported goods to the importer even in a case where he abandons them, that is, in a situation where he does not pay for and receive the documents of title. It may be that for such act of abandonment, action may be taken against him for suspension/ cancellation of license. May be, some other proceedings can also be taken against him. But certainly he cannot be treated as the owner of the goods even in such a case. Holding otherwise would place the exporter in a very difficult position; he loses the goods without receiving the payment and his only remedy is to sue the importer for the price of goods and for such damage as he may have suffered. This would not be conducive to international trade. We can well imagine situations where for one or other reason, an importer chooses or fails to pay for and take delivery of the imported goods. He just abandons them. (We may reiterate that we are speaking of a case where the import is not contrary to law). It is only with such a situation that we are concerned in this case and our decision is also confined only to such a situation. Condition (ii) in Sub-clause (3) of Clause 5, in our opinion, does not operate" - to deprive the exporter of his title to said goods in such a situation."
10. It is true that the above case of Sampat Raj Dugar (supra) was a case where the import was not contrary to law. On the date of import, the goods were covered by a valid import license, which was subsequently cancelled. However, still we are of the opinion that the law laid down by their Lordships is of immense utility in guiding the decision in the case at hand. The direction to issue detention certificate as given by Bombay High Court was also maintained by Supreme Court.
11. During the course of hearing, it was not disputed at the Bar that the import of gold in India is not completely prohibited. It is permissible though under a special licence and subject to payment of duty. However, it was also not disputed at the Bar that such licence is freely transferable and anyone having a licence in hand can import the gold. During the course of hearing, we have specifically asked the learned Counsel for the respondents to show us any provision of law where under the customer was obliged to verify the availability and correctness of a licence to import the gold before accepting the order for supply of gold and dispatching the consignment to India. No such provision having been brought to our notice. In the absence of any such provision having been brought to our notice, we cannot prima facie find any fault with petitioner having exported the consignment of gold to India. Inasmuch as the documents relating to consignment were to be delivered by the bankers only on payment of cash, the title in the gold has continued to vest in the petitioner, the documents having not been taken delivery of by the consignee.
12. The petitioner is in Dubai. The importer is a fictitious person according to the respondents and is not traceable. The petitioner cannot even recover the price of gold. The petitioner had arranged for another trader agreeable to take delivery of consignment and also having a licence but he has withdrawn feeling scarred. The title in the goods is with the petitioner. To this extent Sampat Raj Dugar's case has relevance and applicability.
13. Reliance on Clause(d) of Section 111 of the Customs Act is misconceived in as much as it refers to the goods brought within the Indian Customs waters which is not the case here. Reliance on Clause (m) is also open to question inasmuch as the only thing that can be said is that the name of the consignee is fictitious. We do not propose to express any final opinion thereon. The respondents are investigating the matter and we do not consider it appropriate to scuttle the investigation just in between. At the worst it can be said that the gold may be held liable to be confiscated. However, if the value of the gold is secured for being available to the respondents, there should be no objection to the gold being re-exported at the instance of the petitioner who does have the title therein. That would save the gold from amassing the unwarranted burden of demmurage.
14. The petition is partly allowed and disposed of in terms of the following directions:
(i) The petitioner shall furnish a Bank guarantee in an amount equivalent to the value of the gold in favour of the respondent No.1 undertaking to pay the amount in the event of gold being held liable to be confiscated. The Bank guarantee shall be furnished initially for a period of four months and kept alive by being renewed from time to time in the event of the proceeding before the respondents not terminating within four months from today.
(ii) On such Bank guarantee being furnished, the gold in question shall be allowed to be re-exported to Dubai by the petitioner.
(iii) The requisite detention certificate shall be issued by the respondents to the peti-tioner.
15. The petition stands disposed of accordingly. No order as to the costs.
