The easy profit motive led numerous exporters to prepare invoices showing the value of exported goods far above the market or companytractual price there of in order to obtain import licences for the inflated amounts.
He added that in their companyfessional statements dated the 7th of April, 1965 made in reply to the show cause numberices served on them and in their pleas at the hearing, the two firms had pleaded guilty to the charges framed against them.
The documents seized as a result thereof and the statement of the exporter companyfirmed the information earlier received by the Directorate.
From the Judgment and Order dated 4 6 1969 of the Mysore High Court in Writ Petition Nos.
Two of such exporters were M s. K. O. Krishnaswamy the respondent in Civil Appeal No.
of Amount Amount as shown in ship repatriated outstanding the GR.
2596 of 1969 and the proceedings held against them under section 19 2 of the Foreign Exchange Regulation Act, 1947, hereinafter referred to as the Act by the Director revealed that in between them they had exported 53 companysignments of textile goods and handicrafts to Singapore and other places as per details given below Name Value of export No.
Since exporters were able to earn a handsome profit ranging in some cases between 200 and 300 per cent of the face value by sale of such import licences, the Scheme brought into existence a mushroom growth of textile exporters and parties acting benami on behalf of established exporters.
In companysequence numberices were issued to almost all the textile and handicrafts exporters in the State of Madras calling upon them to explain the reasons for number realising the entire amount shown in the invoices submitted by them as the price of the goods exported to various parties outside India.
441 and 443/66.
The facts giving rise to the two appeals may be briefly stated.
2595 of 1969 and M s. Nagaraja Overseas Traders respondent in Civil Appeal No.
1.forms ments M s. K.O. 21,97,046.62 31 1,01,165.70 20,95,880.92 Krishnaswami M s. Naga 17,06,159.00 22 38,510.25 16,67,648.75 Overseas Traders The Director arrived at the finding From the above statement, it will be clear that, as regards that the first two firms, the total sum shown as outstanding which is number existent and hence number repatriable, due to deliberate over invoicing, is Rs 37,63,529.67.
CIVIL APPELLATE JURISDICTION Civil Appeal Nos.
Finding both of them guilty under section 12 2 of the Act, the Director, by his order dated the 27th May, 1965, imposed on each of them a penalty of Rs.
Genl, R. B. Datar and Girish Chandra for the Appellants.
Shyamala Pappu, Vineet Kumar and A. K. Srivastava for the Respondents.
2595 and 2596 of 1969 in each one of which the Director, Enforcement Directorate, Ministry of Finance, Department of Revenue, Government of India hereinafter referred to as the Director challenges an order of the Mysore High Court dated the 4th of June, 1969, allowing two petitions preferred by the respondents for the issuance of writs under article 226 of the Constitution of India.
Additional Sol.
Getting scent of the practice the Enforcement Directorate carried out a surprise search of the premises of one of the leading textile exporters of Madras State in March, 1965.
2595 and 2596 of 1969.
K. Banerjee.
The Scheme envisaged the issuance of import licences solely on the basis of the declared value of the exported goods.
Most of the exporters had abroad their own branches or representatives who acted as companysignees of the goods exported from 1094 India.
The Judgment of the Court was delivered by KOSHAL, J. By this Judgment we shall dispose of Civil Appeals Nos.
The Government of India promulgated an Export Promotion Scheme under which exporters of textile goods and handicrafts were issued licences for import of raw materials on the basis of their export performance.
3 lakhs and it was that order which each of the two companyvicted firms challenged as illegal in a petition under article 226 of the Constitution of India.
