Sankar Prasad Mitra, C.J:— This is an appeal from a judgment of Sabyasachi Mukharji, J. delivered on January 20, 1971.* In an application under Article 226 of the Constitution the petitioner, United India Minerals Ltd., which is the respondent in this appeal challenged a show-cause notice dated March 8, 1967 issued by the Assistant Collector of Customs, Special Section Calcutta, the appellant No. 1 herein. The petitioner also challenged the proceedings under the said notice.

2. The United India Minerals Ltd. is a company which carries on business of mining and exporting mica. In July and August, 1964, the company exported several cases of “No. 6 Black Spotted Loose Mica Splittings” of the 1st and 2nd qualities to Italy by S.S “Malacca”. The goods were exported under four separate shipping bills. On February 4, 1964 the Joint Chief Controller of Imports and Exports issued a Trade Notice whereby exports of some varieties of Mica were prohibited and some varities were allowed to be exported subject to a minimum F.O.B price per k.g as specified in the Trade Notice. The export of Mica of varieties other than these specified in the Trade Notice could be exported without any restriction as to the be minimum f.o.b prices. “No. 6 Black Spotted Loose Mica Splittings” of the 1st and 2nd qualities were not specified in the Trade Notice. The same could be exported without any restriction as to the minimum f.o.b price. The export of the several cases of “No. 6 Black Spotted Loose Mica Splittings” of the 1st and 2nd qualities were authorised by the Joint Chief Controller of Exports, Calcutta, by endorsements made on the respective shipping bills. At the instance of the Appraiser, Customs House, Calcutta, some of the cases of the goods selected at random were checked before permitting export. It was found that the goods so selected were in conformity with the declaration made in the shipping bills, namely, that they were ‘No. 6 Black Spotted Loose Mica Splittings’ of the 1st and 2nd qualities. And the appraiser made endorsements on the shipping bills testifying the above fact.

3. On 8-3-1967 the Company was served with a show-cause notice. By this notice the Company was asked to show-cause why penal action should not be taken against it under Section 114(i) of the Customs Act, 1962. The notice has referred to various correspondence that passed between the company and the foreign buyers and thereafter, it is alleged that export of Mica from India was governed by the Provisions and/or conditions stipulated in the Trade Notice dated February 4, 1964. On reasonable belief that the documents useful for or relevant for the provisions of the Customs Act and goods liable to be confiscated were secreted therein the office premises of the company and other connected places were searched by the Officers of the Customs House in October, 1964. In course of the search certain documents were seized. It was alleged in the show-cause notice that in order to circumvent or by-pass the provisions or stipulations contained in the Trade Notice of February 4, 1964 and in the Export Trade Control Restrictions, deliberate plans and arrangements were drawn up and implemented by the company in collaboration with Italian buyers whereby the goods covered by the statements contained in the show-cause notice were exported as a result being misdescribed and misdeclared as Black Spotted Mica Splittings. The goods were not Black Spotted Mica Splittings of the 1st and 2nd qualities. It is further alleged in the show-cause notice that the declaration was made to make it appear to the concerned authorities in India that the goods belonged to a variety for which no floor prices were applicable. In the premises, the goods in question were exported and declarations to the concerned authorities were made on the basis of prices lower than the floor prices applicable to the actual goods exported. It is alleged further in the show-cause notice that there had been no declaration of the full export value that was required to be paid; and Section 12(1) of the Foreign Exchange Regulation Act, 1947 and the Notifications issued thereunder under Clause (3) of the Export Control Order, 1958 had been violated. The show-cause notice says that inasmuch as the goods which had been exported were prohibited goods, they had been exported in violation of the law and as such under the provisions of Section 113 (d) read with Section 114 (i) of the Customs Act the goods were liable to be confiscated and the company was asked to show cause why penal action should not be taken against the petitioner.

4. In the show-cause notice two charges were, therefore, levelled against the company. The first charge was contravention of Foreign Exchange Regulation Act, 1947. The second charge was that the prohibited goods had been exported without a valid order permitting the export and as such there was contravention of the relevant provisions of Section 113 read with Section 114 of the Customs Act, 1962.

5. So far as contravention of Section 12(1) of the Foreign Exchange Regulation Act is concerned, in view of the decision of the Supreme Court in (Union of India v. Shreeram Durgaprasad) (1969) 1 SCC 91 : AIR 1970 SC 1597, the learned trial Judge has held that the notice is without jurisdiction. No arguments have been advanced before us disputing this decision of Sabyasachi Mukharji J. The contentions before us were confined to Sections 113, 114 and other relevant sections of the Customs Act, 1962.

6. Mr. Baioria, appearing for the respondent company, has drawn our attention to Section 167(8) of the Sea Customs Act, 1878. The provisions ran thus:

Offences Section of this Act to which the offence has reference Penalties (1) If any goods, the importation or exportation of which is for the time being prohibited or restricted by or under Chapter IV of this Act be imported into or exported from India contrary to such provision or restriction, or if any attempt be made so to import or export any such goods; 18 and 19 Such goods shall be liable to confiscation; and any person concerned with any such offence shall be liable to a penalty not exceeding three times the value of the goods or not exceeding one thousand rupees.

* * * * * * * * *

7. The above provisions have created, inter alts four offences for violation of relevant laws viz.,

(i) importation of prohibited or restricted goods,

(ii) exportation of prohibited or restricted goods,

(iii) attempt to import prohibited or restricted goods and

(iv) attempt to export prohibited or restricted goads.

8. These provisions with alterations, we shall presently notice, have been introduced into the Customs Act of 1962. The relevant provisions of the latter Act are as follows:—

“Sec. 111. Confiscation of improperly imported goods, etc.- The following goods brought from a place outside India shall be liable to confiscation:—

** ** **

(d) any goods which are imported or attempted to be imported or are brought within the Indian Customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force.”

(Sec. 112 provides for penalty for improper importation of goods, etc. We are not setting out the provisions of this section as they are not relevant for this appeal).

“Sec. 113. Confiscation of goods attempted to be improperly exported, etc.- The following export goods shall be liable to confiscation:—

** ** **

(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 time being in force;”

“Sec. 114. Penalty for attempt to export goods improperly, etc.- Any person who, in relation to army goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 113, or abets the doing or omission of such act shall be liable,—

(i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding five times the value of the goods or one thousand rupees whichever is the greater;”

9. “Export goods” referred to in Section 113 has been defined in Section 2(19) of the Act, “‘Export goods’ means any goods which are to be taken out of India to a place outside India.”

10. Comparing the relevant provisions of the Sea Customs Act, 1878 with those of the Customs Act of 1962, Mr. Bajoria has argued that the latter Act makes a distinction between attempt to import or export and the actual importation or exportation. The scheme of the old Act is continued in the new Act so far as the import aspect is concerned, but while dealing with export actual exportation which was provided for in the old Act was omitted in the new Act. The intention to leave out actual exportation is clear from the opening words of Section 113 as contrasted with those of Sec. 111 read with the definition of “Export goods” in Section 2 (19). Section 111 (d) speaks of goods imported or attempted to be imported. Section 113 (d) merely speaks of goods attempted to be exported and deliberately drops out goods actually exported. A comparison of the two section, according to the learned counsel, leads to the conclusion that the words “attempt to export” contemplate a case in which exportation has not taken place. In other words, it contemplates a case of unsuccessful attempt-an attempt which has not resulted in actual exportation. A successful attempt cannot be brought within the scope of Section 113 (d) Lastly, Mr. Bajoria submitted that the Customs Act being a penal Statute and the proceedings thereunder being quasi-criminal, an interpretation favourable to the subject based on strict construction should be adopted. In this view of the matter, according to the learned counsel for the respondent since the exportation in instant case had already taken place, no proceedings under Section 113 read with Section 114 of the Customs Act, 1962 could be taken against the respondent.

11. The show-cause notice was issued under Section 124 of the Customs Act, 1962. The relevant portions of the section run thus:

“Sec. 124. Issue of show-cause notice before confiscation of goods, etc.- No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person—

(a) is given a notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty;

(b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein: and

(c) is given a reasonable opportunity of being heard in the matter:

Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may, at the request of the person concerned, be oral.”

12. As we have seen, penalty for attempt to export goods improperly is imposed under Section 114. By Section 122, the adjudicating officers have been empowered to order confiscation of goods and also to impose penalties. The charge levelled against the respondent is that the respondent has exported goods of one quality misdescribing it as goods of another quality. In other words, the goods exported were not covered by the extort licence referred to in the shipping bills. (Vide, paragraphs 9, 11 and 12 of the show-cause notice at pages 84 and 85 of the Paper Book).

13. Now, the proposition that the Customs Authorities have no jurisdiction to inflict personal penalty in a case where the goods have already been exported from the country, does not appear to us to be tenable on the following grounds:—

(i) Under Section 114, it is the doing of or an omission to do any act which is relevant for the purpose of penalty and not the existence or non-existence of the goods at the time the show-cause notice is issued or the adjudication is made.

(ii) The offence contemplated in Section 114 is an offence which arises under Section 113 and which are the ingredients of Section 114.

(iii) Section 113 applies to export goods as defined in Section 2 (19). An offence is committed under Section 113 (d) before the export.

(iv) It is not the intention of the Act to pursue the goods after export. The Act contemplates punishment of the offender for the offence committed before the export. From this point of view the omission of actual exportation in the new Act is understandable. A liability to confiscation must be distinguished from physical possibility of confiscation. Goods already exported cannot be physically confiscated.

(v) If the offence is committed before the export, the actual export of the goods cannot wipe out the offence. According to the Act the offence under Section 113 (d) can be committed only when the goods are within the country. This is in accord with the definition of “export goods” in Section 2 (19). Therefore, if the offence of “attempt to export” is complete when the goods are within the country, subsequent exportation cannot put an end to that personal liability of the exporter. The question, therefore, to be considered is whether the goods would be liable to fiscation for offence committed if the goods were within the country and had not been exported. Incidentally in Appeal No. 29 of 1969 (I.J Rao v. Bibhuti Bhusan Bag), a Division Bench of this Court observed:—

“Mr. Banerji contended that even if the findings of Mr. Justice Ghose are correct his order quashing the entire proceedings against the respondent is wrong. He argued that for many of the offences under the Customs Act, the Customs Authorities can proceed against the goods as well as against the persons who have contravened Customs laws. Thus the Customs Authorities often impose a penalty and at the same time order confiscation of the goods. In the present proceedings even if the detention of the goods by the Customs authorities be found illegal and if the petitioners get an order for return of the goods to them, there is no reason why the entire proceedings should be quashed. The Customs Authorities still have jurisdiction to initiate proceeding's against the petitioners and impose upon them personal liability by way of the fine. This contention of Mr. Banerji is quite correct.”

This view of the Division Bench was supported by another Division Bench of this Court in Appeal No. 122 of 1969 (Shaikh Mohammed Sayeed v. Assistant Collector of Customs for Preventive (I)).

(vi) The words “would render such goods liable to confiscation” in Section 114 have been used in a notional or hypothetical sense. The expression “would render” refers to the time when the goods are brought into the Customs area for export or an attempt is made to export. In this sense the words “would render liable” do not seem to be inappropriate as export of goods always include an attempt to export goods; whether the attempt is successful or unsuccessful makes, in our opinion, no difference.

(vii) Unless we construe Section 113 (d) in this manner, we shall land in absurdities. For instance, let us take a case in which goods are brought within the Customs area in an attempt to export illegally and the exporter faced with the possibility of detection tries to escape with the goods and while he is escaping, the goods fall into the river or the sea. Can it be paid that the exporter cannot be punished for attempt to export? Obviously answer is in the negative.

14. For all the reasons aforesaid we are of the view that an attempt to export is punishable under Section 114 irrespective of the fact that exportation has already taken place. Moreover the notice in the instant case is a notice both under Section 113 (d) as well as under Section 113 (i), which is as follows:—

“Sec. 113. Confiscation of goods attempted to be improperly exported, etc.—

The following export goods shall be liable to confiscation:—

** ** **

(i) any dutiable or prohibited goods which do not correspond in any material particular with the entry made under this Act…………………”

15. The case of the Customs Authorities in the instant appeal is that the respondent has committed an offence under Section 113 (i) also. And in view of what we have stated above, it seems to us that it is possible to bring this case within Section 113 (i).

16. Mr. Bajoria then invited our attention to Section 51 of the Customs Act, 1962. Section 51 is in the following terms:—

“Clearance of goods for exportation,- Where the proper Officer is satisfied that any goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance and leading of the goods for exportation.”

17. Mr. Bajoria says that in the present case the proper Officer has permitted clearance of the goods and loading of the goods for exportation. Under Section 130 of the Act the Central Board of Revenue had powers of revision of the order of the ‘proper officer’ but that power had to be exercised within two years under sub-section (2) of Sec. 130, which had expired. In this view of the matter Mr. Bajoria contends that no other penal action can be taken against the respondent. Secondly, the goods which have already been exported pursuant to an order made under Section 51 cannot be deemed to be “export goods” within the meaning of Section 2 (19): vide Jute Investment Co. v. S.K Srivastava, (1973) 77 Cal. W.N 501.

18. Similar arguments were advanced before us in Appeal No. 47 of 1973 : (Reported in AIR 1975 Cal 368) (Collector of Customs and Central Excise, West Bengal v. Hindusthan Motors Ltd.) with reference to Section 47 of the Customs Act, 1962. The language of Section 47 is similar to that of Sec. 51. Sec. 47 is as follows:—

“Clearance of goods for home consumption - Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same the proper officer may make an order permitting clearance of the goods for home consumption.”

19. It was argued before us that once the proper officer has permitted clearance of the goods for home consumption no other penal proceedings could be taken against the party concerned. We have negatived this contention relying esspecially on a judgment of the Privy Council in Maritime Elec. Co. Ltd. v. General Dairies Ltd., (1937) AC 610 : (AIR 1937 PC 114) : The New Brunswick Public Utilities Act prohibited any public utility company from making any greater or less charge for its services than that prescribed for the time being under the Act. By the negligence of its servants the Electricity Company rendered an account and was paid an amount based upon erroneous meter reading so that the consumers were charged for only one-tenths of the electricity actually used. In an action to recover the balance of ninetenths the Privy Council rejected a plea of estoppel. Lord Maugham delivering the judgment of the Privy Council has observed:

“………Where, as here, the statute imposes a duty of a positive kind, not avoidable by the performance of any formality, for the doing of the very act which the plaintiff seeks to do, it is not open to the defendant to set up an estoppel prevent it. This conclusion must follow from the circumstances that an estoppel is only a rule of evidence which, in certain special circumstances, can be invoked by a party to an action; it cannot, therefore, avail, in such a case to release the plaintiff from an obligation to obey such a Statute, nor can it enable the defendant to escape from a statutory obligation of such a kind on his part. It is immaterial whether the obligation is onerous or otherwise to the party suing. The duty of each party is to obey the

20. It may be that the Customs Authorities failed to perform their statutory duties by allowing goods not covered by a valid licence to be exported relying on the respondents representations as to quality and the result of the random checking they had carried out. But that did not exonerate the respondent from doing its duty under the law. The law prohibited export of goods excerpt under a valid licence. If export has been made contrary to the provisions of the licence, the export is illegal and to the extent the export is illegal the respondent has failed to obey the law. Clearance under Sec. 51 does not, in our opinion, prevent the authorities from taking other steps open to them under the statute.

21. Secondly, the contention that the goods had ceased to be “export goods” cannot be upheld inasmuch as the offence in question was committed before the goods were exported away.

22. Thirdly, the order under Sec. 51 is passed by “a proper officer.” In Section 2(34) of the Act “proper officer” has been defined. “Proper Officer,” in relation to any function to be performed under this Act means the Officer of Customs who is assigned those functions by the Board or the Collector of Customs. These proper Officers are inferior to Officer who conduct adjudication proceedings under Section 122 of the Act, and exercise powers given to them by Chapter 14 of the Act.

23. These superior officers cannot be bound by any decision taken by Officers inferior in rank. From this point of view as well, an order under Sec. 51 cannot be an impediment to adjudication under the provisions of Chapter 14 of the Act.

24. In the result, we are of opinion that the notice to show-cause dated March 8, 1967 in so far as it alleges contravention of Section 113 read with Section 114(i) of the Customs Act, 1962 is valid, and the appeal is allowed to this extent. The Rule issued by the learned trial judge in respect of contravention of Sec. 113 read with Sec. 114 (i) is discharged, and all interim orders in respect thereto are vacated. There will be no order as to costs. There will be a stay of operation of this order for six weeks.

25. S.K Datta, J.:— I agree.

26. Order accordingly.