Lodge, J.:— This is an appeal by the Superintendent and Remembrancer of Legal Affairs to the Government of Bengal under the provisions of s. 417 of the Code of Criminal Procedure. One H.C Patel was placed on his trial before a Presidency Magistrate on three charges under s. 420 read with s. 109 of the Indian Penal Code, on the allegations that he abetted three offences of cheating the Customs Department of the Government of India and was acquitted of all three charges. Against that acquittal the present appeal has been filed.

The case for the prosecution is as follows:—

There is a firm of merchants named Curmally Jan Mahomed in Bombay, with a branch in Calcutta, and another branch in Osaka, Japan. The Calcutta Branch and the Osaka Branch are both styled Curmally & Co. The firm imports Japanese goods into India for sale in the Indian market. The respondent, H.C Patel, is the manager of the Calcutta Branch. The Osaka Branch is kept in funds by the head office in Bombay and by the branch in Calcutta, and purchases goods from Japanese manufacturers for shipment to Bombay and Calcutta.

During the year 1939, the Osaka Branch entered into forward contracts with Japanese firms for the supply of a number of articles, including tin whistles, glass beads and glass mirrors, for shipment to Calcutta, and informed the Calcutta office of the purchase and the prices at which the purchases had been made. Subsequently, the Japanese manufacturers intimated to the Osaka Branch that they could not supply the goods at the prices agreed upon and that the prices would be increased. The Osaka Branch reported this fact to the Calcutta Branch; and Patel, in reply, agreed to pay the enhanced prices. Thereupon the increase in price was paid to the manufacturers in Japan by the Osaka Branch and debited to the account of the Calcutta Branch. A debit note was sent to the Calcutta Branch for this amount. When the goods were shipped from Japan, however, invoices were sent from the Osaka Branch to the Calcutta Branch, in which the original prices accepted by the manufacturers were given as the cost of the goods and no mention was made of the subsequent increases in price paid by the Osaka Branch under instructions from Calcutta.

When the goods arrived at Calcutta, bills of entry were submitted to the Customs, giving the “real value” of the goods as the cost at which the goods were supposed to have been bought, and in support of this value, the invoices sent from Japan were produced before the Customs authorities, and representations were made to those authorities that the goods had been purchased at the prices mentioned in the invoices.

Information was received from the Censor, which led the Customs authorities to apply for a warrant for the search of the premises of the Calcutta Branch at 55, Canning Street. In the course of that search, documents and correspondence were seized and those documents, etc., have been relied on to prove the case against the respondent.

Three specific charges were framed against the respondent, the first in respect of a consignment of tin whistles which, arrived in Calcutta in March, 1940, the second in respect of a consignment of hollow glass beads which arrived in Calcutta in June, 1940, and the third in respect of a consignment of glass mirrors which arrived in Calcutta in June, 1940.

Evidence was also given in respect of a number of other consignments in which similar false declarations as to the “real value” of the consignments were said to have been made.

In a long written statement, the respondent admitted that he was the manager of the Calcutta firm, Curmally & Co., but asserted that the Osaka Branch and the Calcutta Branch operated as distinct and separate firms. He denied that he had paid anything more for the goods than the prices agreed upon in the original forward contracts and asserted that the values given in the various bills of entry were the prices actually paid by the Calcutta firm.

As stated above, the prosecution has relied almost entirely on the correspondence and documents seized on the premises of the Calcutta Firm at 55, Canning Street. If these letters and documents reveal the true state of affairs, there can be no doubt that the written statement is substantially false; that the Osaka firm and the Calcutta firm did not operate as separate and distinct entities that the respondent on behalf of the Calcutta firm did agree to pay the increased prices demanded by the Japanese manufacturers; that those increased prices were in fact, paid; and that the invoices submitted by the Calcutta firm in support of the bills of entry were false and misleading.

Consequently, the defence contended that many of the letters and documents seized were not admissible as evidence of the truth of the statements contained in them; that the letters and documents (if admitted as evidence) did not reveal the true state of affairs; and finally that if the letters and documents did reveal the true state of affairs, no offence of cheating had been committed.

In the view we take of this case, it is not necessary to decide whether the letters and documents in question are admissible in evidence as proof of the truth of the statements contained in them, nor to decide whether those letters and documents reveal the true state of affairs. We shall assume, without in any way deciding these questions, that the facts are as contended by the prosecution.

The material part of the first charge against the respondent was in the following words;—

That you, H.C Patel……..aided and abetted one B.G Samaddar in committing an offence of cheating the Government of India, in its Customs Department, Calcutta, by causing a false declaration to be made of the real value of tin whistles……..dishonestly concealing the fact that an increment of 20 per cent, has been given to the makers on the said goods prior to their delivery at Calcutta, which increment formed part of the real value of the goods as defined in s. 30(b), Sea Customs Act, and thereby deceived, etc. etc.

The other two charges are in similar terms.

B.G Samaddar is said to be the clearing agent, who was himself deceived by the importer Patel.

It is obvious, therefore, that the first question for consideration is whether the respondent “caused a false declaration to be made of the real value” of the goods.

Section 29 of the Sea Customs Act requires the owner to state in his bill of entry the real value to the best of his knowledge and belief. The statement of the owner need not, however, be accepted by the Customs Officials.

Section 30 of the Sea Customs, Act, defines, ‘real value’ and reads—

30. For the purposes of this Act the real value shall be deemed to be—

(a) the wholesale cash price less trade discount, for which goods of the like kind and quality are sold, or are capable of being sold, at the time and place of importation or exportation, as the case may be, without any abatement or deduction whatever, except (in the case of goods imported) of the amount of the duties payable on the importation thereof; or

(b) where such price is not ascertainable, the cost at which goods of the like kind and quality could be delivered at such place, without any abatement or deduction except as aforesaid.

Mr. S.M Bose, for the appellant, has contended that s. 30(b) of the Sea Customs Act was clearly applied in the present case, and that, inasmuch as the importer gave as the “real value” of the goods the price said to have been paid by him, and supported his statement by producing the invoices, it was equally clear that the importer sought to have the “real value” determined under s. 30(b) of the Act. In our opinion, it was not sufficient to prove that the Custom officers in fact applied s. 30(b) of the Act, or that the importer sought to have the real value determined under s. 30(b). It was incumbent on the prosecution to prove that those conditions were fulfilled, which entitled the Customs officers to apply s. 30(b) and not s. 30(a). In other words it was incumbent on the prosecution to prove that “the wholesale cash price, less trade discount, for which goods of the like kind and quality are sold; or are capable of being sold, at the time and place of importation” was not ascertainable. No attempt was made to prove that this price was not ascertainable. Indeed the only evidence on record bearing on this point, to which our attention has been drawn, seems to suggest that such price was ascertainable. That evidence is contained in the re-examination of P.W 4. F.P.Q.I Baker and reads—

Tin whistles are staple goods. I cannot say if it (i.e, a record of prices of staple goods kept by each appraiser) will appear in the record.

It therefore follows that no attempt was made by the prosecution to prove what was the “real value” of the goods under s. 30(a) of the Sea Customs Act, nor to prove that the price mentioned in s. 80(a) of the Act could not be ascertained.

Even if it be assumed that s. 30(b) of the Sea Customs Act was applicable to the consignments in respect of which the three charges were framed, it does not follow that a false declaration of the real value must have been made. Section 3.0(b) does not lay down that the real value of imported goods is the cost at which those particular goods are delivered, but “the cost at which goods of the like kind and quality could be delivered” at that place.

It does not follow that all importers can import goods at the same cost, and it is clear from the evidence on record that the minimum cost at which goods of the like kind and quality could be delivered, is taken as the real value. It may easily happen, particularly in the disturbed conditions following an outbreak of war, that different importers import similar goods at different prices, and that one importer is willing to import at prices in excess of the “real value” in anticipation of future rises in price. It might happen that, in circumstances similar to those of the present case, some importers declined to pay “the increased prices” demanded by the manufacturers and succeeded in inducing or compelling the manufacturers to supply the goods at the contract rate.

The mere fact that an importer paid a particular price for particular goods is not sufficient to prove that price is the real value for the purposes of s. 30(b) of the Sea Customs Act. It must be shown that goods of the like kind, and quality could not be delivered at that place at a lower price.

The prosecution made no attempt to prove that other goods of the like kind and quality were not being imported into Calcutta at that particular time, or that those other goods could not be imported at the cost given by the respondent as the real value of his goods.

In other words, the prosecution made no attempt to prove what was the real value of the goods imported by the respondent, and therefore failed to prove that the respondent “caused a false declaration to be made of the real value” of the goods. All that the prosecution sought to prove was that the respondent gave an estimate as to the real value of the goods and furnished false evidence in support of that estimate. Even if the facts alleged by the prosecution are taken as proved, no offence of cheating was made out.

In our opinion, therefore, the respondent was rightly acquitted. This appeal is accordingly dismissed and the respondent is discharged from his bail bond.

Bartley, J.:— I agree.

Appeal dismissed.

A.C.R.C