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Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  1427 OF 2007

M/s Transport Corporation of India Ltd. …Appellant

Versus

M/s Ganesh Polytex Ltd. …Respondent

J U D G M E N T

Chelameswar, J.

1. This  is  an  appeal  under  Section  23  of  the  Consumer  

Protection Act, 1986 against the order dated 20th December,  

2006  of  the  National  Consumer  Disputes  Redressal  

Commission (for short “the National Commission”) in Original  

Petition No. 341 of 1993.   The opposite party/respondent in  

the above-mentioned original petition is the appellant herein.  

The sole respondent  herein was the complainant  before the  

National Commission.

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2. By  the  impugned  Order,  the  National  Commission  

allowed  a  complaint  filed  by  the  respondent  herein  and  

directed  the  appellant  herein  to  pay  an  amount  of  Rs.  

29,74,321.45 with interest @ 12 per cent per annum from the  

date of the filing of the complaint till the date of realization  

apart from the cost quantified at Rs.25,000/-.

3. The  substance  of  the  complaint  before  the  National  

Commission is as follows:-

4. Both the parties to the complaint are public companies  

under the Companies Act.   The respondent is engaged in the  

business of manufacturing and selling of yarn and export of  

fabric  of  different  specifications,  whereas  the  appellant  is  

engaged in the business of transporting goods from one place  

to the other for consideration.    

5. In the year 1992, the respondent received an indent for  

export of 100 per cent cotton yarn fabric specified therein, the  

details  of  which  are  not  necessary  for  the  purpose  of  this  

judgment.   The  said  indent  was  placed  by  one  M/s.  Aleef  

Enterprises (Trading), Dhaka calling upon the respondent to  

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export  the  goods  specified  in  the  indent  to  M/s.  Azim  

Garments Ltd. in Dhaka,  Bangladesh.   

6. According to the complaint, the respondent was required  

to  dispatch  the  entitled  goods  and  “negotiate  various  

documents including invoice, consignment copy of the goods  

received and consignment note bill of exchange etc.” through  

M/s.  Islami Bank Bangladesh Ltd.,  allegedly,  the banker  of  

M/s. Azim Garments Ltd., Dhaka.1

7. The  respondent  averred  in  the  complaint  that  it  had  

agreed to send the various documents to be negotiated with  

the  said  Islami  Bank  and  acceptance  by  the  respondent’s  

banker  i.e.  the  American Express  Bank Ltd.    It  is  further  

stated in the complaint that the said Islami Bank was entitled  

to take delivery of the goods or endorse the consignee copy of  

the  goods  receipt/consignment  note  in  favour  of  M/s  Azim  

Garments Ltd.2

1 Para  3 of  the  Complaint:  In  terms of  the  said indent,  the  complainant  was required  to  dispatch the  quantities of the said goods and to negotiate various documents including the invoice, consignee copy of  the goods receipt/consignment note, bill of exchange etc., and other documents of dispatch through M/s.  Islami Bank Bangladesh Ltd., the bank of the said M/s. Azim Garments Ltd.   2 Para 3 of the Complaint: The said documents were agreed to be sent to the said Islami Bank Bangladesh   Ltd., for negotiation and acceptance by American Express Bank ltd., the bank of the complainant.   The  said Islamic Bank Bangladesh Ltd. upon acceptance for payment of the said documents including the bill of   exchange for the price of the goods consigned, was entitled to either take delivery of the consignment of the  said goods itself or endorse the consignee copy of the goods receipt/consignment note in favour of M/s  Azim Garments Ltd.

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8. The respondent entrusted five consignments of goods to  

the  appellant  on various dates,  the  details  of  which are  as  

follows:-

Invoice  No.

Date Qty in Mtrs. Amount US $ Consignment  Note No.

Date

EXP/2 28.10.92 13982 18176.60 A 08465 28.10.92 EXP/3 05.11.92 25109 32641.70 A 08565 05.11.92 EXP/4 14.12.92 12208 15870.40 A 08658 16.11.92 EXP/5 30.01.93 16188 21044.60 A 98738 29.12.92 EXP/6 25.02.93 5447   7081.10 A 11351 15.02.93

94814.20

--- Para 4 of the complaint

9. Under  the  consignment  note,  the  said  goods  were  

required to be transported from Ahmedabad to Benapole  in  

Bangladesh.   The CONSIGNEE COPIES of the consignment  

notes of each of the five consignments mentioned above were  

handed over to the respondent.  It is admitted in the complaint  

that  the  goods  which  are  the  subject  matter  of  the  above-

mentioned five consignments are required to be delivered upon  

the  production  of  the  consignee’s  copy  of  the  respective  

consignment notes.3

3 Para 4 of the Complaint: The complainant from time to time entrusted the Respondent with various  quantities  of  the  said  goods  for  transportation  from  Ahmedabad  to  Benapole  in  Bangladesh.   The  Respondent  after  colleting  the  freight,  issued  its  consignment  notes.    The  consignee  copies  of  the   respective  consignment  notes  were  handed  over  to  the  complainant  and  the  goods  covered  by  each  consignment note were to be delivered and could be taken delivery of upon production of the consignee  copy of the respective consignment note only and not otherwise.

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10. According to the respondent, all the relevant documents  

including the CONSIGNEE COPIES of the consignment notes  

were  duly  communicated  by  the  respondent  through  its  

banker to the Islami Bank Bangladesh Ltd.   It is specifically  

averred  in  the  complaint  that  the  said  transaction  was  

originally covered by letter of credit opened by the said Islami  

Bank but the said letter of credit had expired.  Therefore, the  

documents mentioned above were sent to the said banker on  

collection basis4.

11. It  appears  from  the  complaint  that  the  Islami  Bank  

Bangladesh, though received all  the documents sent by the  

respondent, did not honour the same and made no payment  

for a long time.   In the said circumstances, the respondent  

through its banker recalled all the documents “in order to re-

import  the  goods  back  to  India”.  Admittedly,  the  said  

documents  were  returned  unpaid  by  the  Islami  Bank  

Bangladesh to the complainant’s banker5.

4   Para 5 of the Complaint: All the documents including, inter-alia, the invoice, the consignee copies of the  consignment notes and the bills of exchange, were duly sent by the Complainant through American Express  Bank Ltd. to Islami Bank Bangladesh Ltd. for acceptance for payment.   The said documents, although  drawn under a letter of credit opened by the said Islami Bank Bangladesh Ltd., were sent on collection   basis as the said Letter of Credit had expired.

5 Para 8 of the Complaint: Thereafter, the said documents of the aforesaid five consignments were duly  returned unpaid by the said Islami Bank Bangladesh Ltd. to the Complainant’s bank under cover of their   letter dated 16.6.93.

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12. Upon the return of the original documents by the Islami  

Bank,  the  respondent  herein,  by  its  letter  dated  12th July,  

1993, called upon the appellant to “rebook all the five consignments: for  

transportation to New Delhi and deliver the same to the complainant  at New Delhi”.  

(Para 10 of the Complaint))  In response to the said letter, the  

appellant herein, by its letter dated 22nd July, 1993, assured  

the  respondent  that  all  the  five  consignments  would  be  

rebooked  for  delivery  at  New  Delhi.   The  appellant  further  

called  upon the  respondent  “to  surrender  the  original  consignee  copies  

alongwith the invoice copies and pay one side freight and octroi at its Ahmedabad office  

for rebooking”.

13. In  reply  to  the  letter  dated  22nd July,  1993  of  the  

appellant, the respondent, by its letter dated 31st July, 1993,  

called upon the appellant to confirm inter alia “that the goods covered  

under the said consignment note were available with the respondent and the location of  

the  said  goods”.   The  appellant  replied  by  its  letter  dated  16 th  

August, 1993 without giving any information demanded by the  

respondent but only gave assurance that the goods would be  

delivered within fifteen to twenty days “after the receipt of the original  

consignee copies”.

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14. On 28th August, 1993, the respondent sent another letter  

seeking unequivocal answers to the various enquiries made by  

the respondent in its earlier letter dated 22nd July, 1993.

15. In reply, the appellant, by its letter dated 11th September,  

1993, confirmed that all the aforesaid consignments were lying  

at  the  godown  in  safe  and  sound  condition  and  further  

confirmed that upon receipt of the original consignee copies,  

the said goods would be rebooked to New Delhi.  The relevant  

portion reads as follows:

“Sub.: Ch.No.A-08465 dated 28.10.1992 Ch.No.A-08565 dated 05.11.1992 Ch.No.A-08658 dated 16.11.1992 Ch.No.A-098738 dated 29.12.1992 A-11351 dated 15.02.1993 All Ex. Ahmedabad to Benapole

We have received your letter no.RKV/M-889 dated 28th August, 1993 for  rebooking of above consignments.

We have already given you two letters for advising your clients to deposit  the original consignee copy and one side freight and other dues then only  we will  rebook the above consignements.   But,  you are asking for the  confirmation referred in your earlier letter in paras 1(a) and (b).

Please note that the above consignment is lying at our godown in safe &  sound condition.  When your client will send the D/D for our dues with  original  consignee copy to our Ahmedabad or Calcutta  office  then our  concerned office will advice to Benapole to rebook the material to Delhi  as per your advice.  You are giving unnecessary correspondence and due  to this long delay the demurrage is going on higher side day by day @ 3  paise per kg. per day.

We  hope,  you  understood  all  the  points  and  take  necessary  action  immediately.”

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16. The  said  letter  was  followed  by  another  letter  of  the  

appellant  dated  29th September,  1993,  the  relevant  portion  

reads as follows:

“Sub.: Ch.No.A-08465 dated 28.10.1992 Ch.No.A-08565 dated 05.11.1992 Ch.No.A-08658 dated 16.11.1992 Ch.No.A-098738 dated 29.12.1992 A-11351 dated 15.02.1993 All Ex. Ahmedabad to Benapole

This has reference to our earlier letter no.SBD/OPN/INM/3569/93  dated 11th September, 1993 regarding above consignments.

As  per  the  reply  received  from  our  Calcutta  office,  first  four  consignments have already been exported and the documents were  sent to the party directly.

The last  consignment i.e.  Ch.No.A-11351 is lying at our Calcutta  Godown.   If  you want  to  rebook this  consignment  to  Delhi,  you  please send the original consignee copy and our dues by D/D to our  Ahmedabad or  Calcutta Office directly  for their  necessary action.  On  receipt  of  Consignee  copy  and  D/D,  our  Calcutta  office  will  rebook this consignment to Delhi.”

17. In  the  background  of  the  abovementioned  facts,  the  

respondent herein filed a complaint under Section 21(a)(i) of  

the  Consumer  Protection  Act,  1986  before  the  National  

Commission  in  Original  Petition  No.341  of  1993  claiming  

various  amounts  totaling  to  Rs.40,98,164.04  along  with  

pendente-lite interest and future interest @ 21% per annum  

on Rs.34,74,321.45 along with costs.

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18. In response to the said complaint, the appellant herein  

filed its written statement wherein it admitted the fact that five  

consignments of goods under five distinct consignment notes  

(as specified in the complaint) were entrusted to the appellant  

for  being  transported  from  Ahmedabad  to  Benapole  

(Bangladesh).  According  to  the  appellant,  of  the  

abovementioned  five  consignments,  four  consignments  were  

infact delivered.  The relevant portion of the appellant’s written  

statement reads as follows:

“The opposite party duly cleared the consignments at Indo- Bangladesh border from Indian Customs and as per export  procedure  duly  handed  over  the  same  to  the  Bangladesh  Custom Officer which duly acknowledged the receipts of the  said 4 consignments.”  

19. It  is  further  the  case  of  the  appellant  that  the  fifth  

consignment was not exported to Bangladesh in view of the  

fact that the respondent herein had instructed the appellant to  

rebook the same to Delhi6.

20. It  is  the  case  of  the  appellant  that  as  per  the  export  

procedure, the goods (which are the subject matter of dispute)  

were required to be unloaded and delivered at the Benapole  

6 The goods covered by the consignment note No.A-11351 could not be exported to Bangladesh as in the   meantime the opposite party having received instructions to rebook the same. ….. The same consignment is  lying  in  the  godown  of  the  opposite  party  at  Calcutta  entirely  at  the  risk  and  responsibility  of  the  complainant and incurring day to day demurrage charges.  The opposite party was and still is ready and  willing to deliver the goods covered by the consignment note No.A-11351

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Customs  frontier  of  Bangladesh  after  crossing  the  Indian  

border  at  Petrapole.   The  relevant  portion  of  the  written  

statement, at para 4, reads as follows:

“The subject consignments were meant for carriage by lorry  transport from Ahmedabad/Odhav to Benapole (Bangladesh)  and as per export procedure and or as customary said goods  were to be unloaded and delivered after crossing India border  at Petrapole into the warehouse of Bangladesh customs at  Benapole.  The importer consignee was to take delivery of the  said goods after paying the customs duties after complying  with the formalities as per rules of the Bangladesh Customs  Import  and  on  submission  of  relevant  documents  to  Bangladesh Customs Authorities at Benapole.  The opposite  party’s obligation was to transport the said goods by their  lorry and to deliver  the same to the Benapole Bangladesh  Custom Warehouse as per prevalent procedure of exporting  the  materials  to  beanpole  (Bangladesh)  from  India.   The  opposite party duly transported the said four consignments  and delivered the same at Benapole.”   

21. Coming  to  the  letter  dated  11.9.1993  of  the  appellant  

whereunder (according to the respondent) the appellant agreed  

to rebook the five disputed consignments to Delhi,  it  is the  

defence7 of the appellant that (a) the said letter only explained  

the procedure for rebooking of the consignments, and (b) the  

admission regarding the custody of the five consignments was  

a mistake of fact in view of the communication gap between  

the  appellant’s  headquarter  and  its  various  branch  offices.  

7 The  opposite  party  states  that  by  its  letter  dated  22.7.93  it  never  assured  to  rebook  all  the  five  consignments for delivery at Delhi to the complainant as alleged.  On the contrary, the opposite party by its  letter dated 22.7.93 explained the procedure for rebooking of the consignments by the consignor concerned.  Thereafter,  on thorough enquiry from its concerned branch offices the opposite party by its letter dated  29.9.93 duly informed the complainant that the goods covered by the four consignment notes were exported  and delivered at the destination in terms of contract of carriage.

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Within a short period after delivering the letter the appellant  

realized its mistake and explained its position by subsequent  

letter  dated  29.9.1993  (the  contents  of  which  have  already  

been extracted earlier).

22. It is further the defence of  the appellant that once the  

goods crossed Indian customs frontier  during the course of  

export  of  such goods,  only the exporter  can bring back the  

goods by following the procedure under the law8.

23. The appellant  also  took a  defence that  the  respondent  

availed the duty drawn back credit under the Customs Act on  

the strength of the fact that the goods in dispute had been  

exported.   Therefore,  it  is  not  open  to  the  respondent  to  

complain  that  the  appellant  has  either  misappropriated the  

goods or made a wrong delivery.9

24. In support of its defence, the appellant relied upon three  

sets of documents i.e. Annexures X, Y and Z, running into 8, 2  8 The  complainant  is  also  well  aware  of  the  fact  that  there  is  no  ‘Trade  treaty’  between  India  and  Bangladesh for rebooking of the consignment by the transporter against the consignment notes issued in  India.   Only  the  Exporter  can  through  his  Clearing  Agent  at  Bangladesh  re-import  the  exported  consignments  according  to  ‘back  to  India  Bangladesh  Customs  procedure’.   …  After  exporting  the  consignments to Bangladesh it is the owner of goods who after completing all the formalities can clear the  consignments from Bangladesh Customs and it is only then the same can be brought back to India.  The   opposite party as a carrier cannot of its own bring back the exported consignments in its country under the   Law. 9 The  complainant  being  fully  aware  of  the  fact  that  the  said  4  consignments  were  duly delivered  at   beanpole (Bangladesh) in terms of contract of carriage duly applied for duty drawback as provided under   Section 74/75 of Customs Act, 1962 which is export-oriented benefit given by the Government of India.

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and 6 pages respectively.  Annexure ‘X’ consists of copies of  

four invoices and copies of four consignment notes covering  

four consignments of goods in dispute.

25. The  National  Commission  recorded  a  finding  that  the  

copies  of  the  invoices  produced  under  Annexure  ‘X’  by  the  

appellant  herein and the copies of  the invoices filed by the  

complainant do not tally with each other and, therefore, the  

documents produced by the appellant herein are “bogus”.10  

26. The  National  Commission  also  examined  two  letters  

dated  08.04.2002  and  10.04.2002.   These  two  letters  were  

sent  by  the  Customs  authorities  of  Petrapole,  Kolkata  and  

Benapole (Bangladesh) respectively in response to the letters  

dated  14.03.2002  and  12.03.2002  respectively  of  the  

appellant.   The  National  Commission  recorded  a  finding,  

“therefore, neither these two letters nor the endorsements and seals of  

Cargo Officer alongwith signatures on said invoices or the statement of  

Mahafuzur  Rehman  are  of  any  help  to  the  opposite  party  on  the  

controversy  on hand”.  The Commission, therefore,  allowed the  

complaint.  The operative portion of the order is as follows: 10 Reading of two sets of invoices together would show that the number of cartons, measurement of fabrics  and dates as recorded in invoices at pages 61, 63, 65 and 67 are substantially different from the invoices at  pages 15, 18, 21 and 24 for which no satisfactory explanation has been offered by the opposite party.  Also  considering the submission referred to above advanced by Shri Virmani, the invoices filed by the opposite  party must be held to be bogus and they cannot be exhibited and read in evidence.

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“Complainant is thus entitled to the value of consignments  in  question  of  Rs.29,73,321.45  alongwith  interest  thereon  which we quantify  at  12% p.a.  from the dates of  booking  upto the date of filing complaint and pendentilite and future  interest  at  the  said  rate  from  the  opposite  party.   Since  interest  has  been  awarded  to  the  complainant  it  is  not  entitled to any damage separately.

Accordingly,  the  complaint  is  allowed  and  opposite  party is directed to pay Rs.29,74,321.45 with interest @ 12%  p.a. from the dates of book upto the date of filing complaint  and  pendentilite  and  future  interest  at  the  said  rate.  Opposite party will also pay Rs.25,000/- as costs.”

27. Hence, the appeal.

28. Elaborate submissions are made by the learned senior  

counsel appearing for either side in support of their respective  

cases virtually reiterating their respective pleadings.

29. Since the case arises out of a contract for transport of  

goods by the appellant to a foreign country, an examination of  

the relevant provisions of the Customs Act, which deal with  

export of goods, is necessary. Import and export of goods into  

or out of India is regulated by the Customs Act, 1962 and the  

Rules and Regulations made thereunder.  Section 5011 of the  

said Act stipulates that the exporter of any goods by land is  

11 Section 50. Entry of goods for exportation.—(1)  The exporter of any goods shall make entry  thereof by presenting electronically  to the proper officer in the case of goods to be exported in a  vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a bill of export  in the prescribed form.”

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required to make an entry12 thereof by presenting to the proper  

officer  BILL  OF EXPORT.13  Under  Section 5114,  the  proper  

officer on receipt of a BILL OF EXPORT (contemplated under  

Section 50) if satisfied that the exporter has paid the duty and  

other charges under the Act, if any, and that such goods are  

not prohibited goods, may make an order permitting clearance  

and loading of the goods for exportation.

30. Under Section 40, a person-in-charge of a conveyance is  

not permitted to load export goods at a customs station unless  

a BILL OF EXPORT duly passed by the proper officer has been  

handed over to the person-in-charge of the conveyance by the  

exporter.   

31. The relevant portion of Section 40 reads as follows:

“40. Export goods not to be loaded unless duly passed by  proper  officer.—The  person-in-charge  of  a  conveyance15  shall not permit the loading at a customs station—

12 Section 2(16) “entry”, in relation to goods means an entry made in a bill of entry, shipping bill or bill of   export and includes in the case of goods imported or to be exported by post, the entry referred to in section  82 or the entry made under the regulations made under section 84. 13 Section 2(5) “bill of export” means a bill of export referred to in section 50. 14 Section 51. 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 loading of the goods for exportation.

15 Section 2(9) “conveyance” includes a vessel, an aircraft and a vehicle.     Section 2(42) “vehicle” means conveyance of any kind used on land and includes a railway  

vehicle.

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(a) of export goods, …. unless a … bill of export,  … duly passed by the proper officer, has been  handed over to him by the exporter;

(b)    ….. …...”

32. Section 41 of the Act mandates that the person-in-charge  

of  a  conveyance  carrying  export  goods  shall  deliver  to  the  

proper officer an EXPORT REPORT in the prescribed form in  

the case of an export by vehicle.   

“41. Delivery of export manifest or export report.—(1)  The  person-in-charge of a conveyance carrying export goods  shall,  before  departure  of  the  conveyance  from  a  customs station, deliver to the proper officer in the case  of  a  vessel  or  aircraft,  an  export  manifest  by  presenting  electronically and  in  the  case  of  a  vehicle,  an  export  report in the prescribed form.”

33. In  exercise  of  the  power  conferred  under  Section 157,  

read with Sections 50 and 60, of the Customs Act, 1962, the  

Central  Board  of  Excise  and  Customs  made  regulations,  

namely, Shipping Bill and Bill of Export (Form) Regulations,  

1991 by a notification No.61/91 (N.T.)-Cus., dated 29.8.1991.  

Regulation 3 thereof stipulates as follows:

“Regulation  3.  Bill  of  Export.—A  bill  of  export  to  be  presented  by  an  exporter  of  goods  be  in  the  form  specified in Annexure V, Annexure VI, Annexure VII or  Annexure VIII (Se Forms 97, 98, 99 and 100 in Part 5),  as  the case may be, appended to these regulations.”  

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34. Regulation 4 prescribes the specifications of the BILL OF  

EXPORT form.16

35. By a notification No.422/76 dated 23.10.1976 which was  

subsequently  amended  by  another  notification,  the  Central  

Board  of  Excise  and  Customs  made  regulations  known  as  

Export Report (Form) Regulations, 1976.  Regulation 3 thereof  

stipulates that every EXPORT REPORT shall  be delivered in  

duplicate and cover all goods carried in a vehicle.   

36. Regulation 4 prescribes the form:-

“Regulation  4.  Form  of  Export  Report.—(1)  The  export  report to be delivered under section 41 of the Customs  Act,  1962  (52  of  1962)  by  the  person-in-charge  of  the  vehicle  carrying  export  goods  shall  be  in  the  appended  form (See Form 73 in Part 5) to these regulations.

(2) It shall be printed on white paper of size 21.5 cms x  34.5 cms of durable quality.”

37. Thus, the movement of goods in the course of export is  

meticulously regulated and recorded.   16 Regulation 4. Specifications of Shipping Bill and Bill of Export (Form).— The Shipping Bill and Bill of  Export forms specified in Annexures 1 to VIII shall be in accordance with the following specifications,   namely:-

(a) the forms shall be printed on foolscap size of paper measuring 34.5 cms by 21.5 cms and  shall have the following margins namely:- (i) top – 1.5 cms, (ii) bottom – 1.5 cms, (iii) left – 1.8 cms, (iv) right – 0.5 cms

The layout of the forms and the size of the boxes shall be as per the layout and boxes  shown in the Annexures;

(b) the forms shall be printed on paper of grammage 70 to 85 grams per square metre; the  paper should be stable in conditions of 50 to 60 per cent relative humidity;

(c) the captions inside the boxes of the forms should be printed in 6 pt. mono sans-serif and  should be located as near as possible to the top left of the boxes;

(d) the forms shall be filled in by using a typewriter only.

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38. The appellant,  who claims to have exported 4 of  the 5  

consignments handed over to it by the respondent, could not  

have loaded the goods at Petrapole Customs station without  

having obtained a BILL OF EXPORT duly passed by the proper  

officer and the person-in-charge of the conveyance owned by  

the appellant could not have either loaded the goods in the  

vehicle  or  departed from Petrapole  Customs station without  

delivering  to  the  proper  officer  an EXPORT REPORT in  the  

prescribed form contemplated under Section 41.   

39. The best proof of the case of the appellant that it had in  

fact  transported  the  goods  in  dispute  beyond the  Petrapole  

Customs  station  and  out  of  the  customs  frontier  of  India  

would  have  been  to  produce  the  abovementioned  two  

documents i.e. copies of the BILL OF EXPORT and EXPORT  

REPORT  pertaining  to  the  four  consignments  in  dispute.  

There  is  no  pleading  on  behalf  of  the  appellant  before  the  

National Commission nor any discussion in the order under  

appeal  regarding  the  existence  of  the  abovementioned  two  

documents  vis-à-vis  the  four  consignments  in  questions.  

Except  making  a  bald  assertion  in  the  written  statement  

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before  the  National  Commission  that  the  appellant  had  

delivered 4 consignments out of the 5 consignments entrusted  

to it at Benapole (which is already taken note of at para 4 of  

this  judgment,)  the  appellant  did  not  make  any  specific  

pleading regarding the actual dates of the:

1. permission  by  the  proper  officer  under  Section  51  for  

loading the goods for exportation; or the

2. delivery by the appellant of the EXPORT REPORT under  

Section 41 with reference to each of the 4 consignments which  

are  allegedly  transported  and  delivered  at  the  Benapole  

Customs Station Warehouse of Bangladesh.

40. We are conscious that the production and proof of the  

abovementioned  documents  may  not  be  the  only  possible  

evidence to establish that the appellant stood discharged of its  

legal obligation.

41. It  is  the  pleaded  case  of  the  appellant  that  its  legal  

obligation  as  transporter  ends  on  its  delivering  the  goods  

entrusted to  it  at  Benapole  Customs station.   Unloading  of  

imported goods at any customs station in this country is also  

regulated by the provisions of the Customs Act, 1962.  We are  

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sure  that  it  must  be  equally  regulated  by  the  law  of  

Bangladesh.  What exactly the law of Bangladesh is in this  

regard  and  how  the  factum  of  delivery  of  goods  allegedly  

carried and delivered by the appellant  at  Benapole  is  to be  

proved are two distinct and different matters.   It is a settled  

principle of private international law that foreign law is always  

a question of fact which is required to be pleaded and proved  

by the party whose rights or obligations flow from such foreign  

law.  There is no pleading or proof in this regard in the instant  

case.

42. The appellant did not plead as to what is the procedure  

prescribed under the law of Bangladesh for the unloading of  

the imported goods at its  Customs Stations?  Nor does the  

appellant give the details of the dates of the actual delivery of  

each of the 4 consignments at Bengapole.

43. However, the appellant placed heavy reliance on a letter  

dated  11.04.2002  allegedly  written  by  some  officer  of  the  

Customs  Department  of  the  Republic  of  Bangladesh  at  

Beanpole  addressed  to  the  Joint  Commissioner,  Customs  

Department, Benapole – Jessore (Bangladesh). It refers to four  

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bills  of  entry  dated  9.1.1993,  13.12.1992,  20.12.1992  and  

11.02.1993.  The relevant portion of the document reads as  

follows:

“1) Bill of entry No. – 14305 dated 9.1.1993 of shipping  bill  No.4949/DB  dated  28.12.1992  has  been  accepted  by  M/s. Azim Garments Limited Dhaka – Bangladesh. Goods –  fabrics 21 bales and name of shipping agent M/S. Mun Mun  Shipping – Benapole.

2) Bill of entry No.2267 dated 13.12.1992 of shipping bill  No.3833/DB dated  2.11.1992  has  been  accepted  by  M/s.  Azim  Garments  Limited,  Dhaka  –  Bangladesh.   Goods  –  fabric  30  bales  and  name  of  shipping  agent  Their  Green  (Mun Mun) Benapole.

3) Bill  of  entry No.12516 dated 20.12.1992 of  shipping  bill No. – 3834/DB dated 2.11.1992 has been accepted by  M/s.  Azim  Garments  Ltd.  Dhaka  –  Bangladesh.   Goods  fabrics  30  bales  and  name  of  shipping  agent  M/s.  Madeezuddin (A-29).

4) The  goods  of  shipping  bill  No.699/DB  dated  11.02.1993 has not been accepted by the party.  The goods  have been auctioned.”

44. It  is  rather  difficult  to  understand  the  content  of  this  

document, apart from the other problems with the document  

which shall be discussed later.  It speaks about three bills of  

entry  having  had  been  “accepted”  through  three  different  

shipping agents of M/s. Azim Garments Ltd., Dhaka.  Of the  

4th bill  of  entry having not  being accepted,  the goods were  

auctioned.  It is difficult to understand what exactly is meant  

by ‘accepting a bill of entry’.  At least, insofar as the Indian law  

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is concerned, a bill of entry is a document, under Section 4617  

of the Customs Act, which is required to be presented by the  

importer.   Section 47 stipulates that  on receipt  of  a  bill  of  

entry, the proper officer, on being satisfied about the legality of  

the import and the factum of payment of the appropriate duty  

on the import of such goods, is required to clear the goods.  

Assuming that the law of Bangladesh is similar to the law of  

Customs in India,  it  is  therefore difficult  to  understand the  

content of the said letter.  It speaks about acceptance of three  17 46. Entry of goods on importation. – (1) The importer of any goods, other than goods intended for   transit or transhipment, shall make entry thereof by presenting electronically to the proper officer a bill of  entry for home consumption or warehousing in the prescribed form :

Provided that the Commissioner of Customs may, in cases where it is not feasible to make entry  by presenting electronically , allow an entry to be presented in any other manner:  

Provided further  that if  the importer makes and subscribes to a declaration before the proper   officer, to the effect that he is unable for want of full information to furnish all the particulars of the goods   required under this sub-section, the proper officer may, pending the production of such information, permit  him, previous to the entry thereof (a) to examine the goods in the presence of an officer of customs, or (b)   to deposit the goods in a public warehouse appointed under section 57 without warehousing the same.  

(2) Save as otherwise permitted by the proper officer, a bill of entry shall include all the goods  mentioned in the bill of lading or other receipt given by the carrier to the consignor.

(3) A bill of entry under sub-section (1) may be presented at any time after the delivery of the  import manifest or import report as the case maybe :

Provided that the Commissioner of Customs may in any special circumstances permit a bill of  entry to be presented before the delivery of such report :

Provided further that a bill of entry may be presented even before the delivery of such manifest if   the vessel or the aircraft by which the goods have been shipped for importation into India is expected to  arrive within thirty days from the  date of such presentation.  

(4) The importer while presenting a bill of entry shall at the foot thereof make and subscribe to a  declaration as to the truth of the contents of such bill of entry and shall, in support of such declaration,  produce to the proper officer the invoice, if any, relating to the imported goods.

(5) If the proper officer is satisfied that the interests of revenue are not prejudicially affected and  that there was no fraudulent intention, he may permit substitution of a bill of entry for home consumption  for a bill of entry for warehousing or vice versa.

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bills  of  entry  on  different  dates  by  three  different  shipping  

agents  of  M/s.  Azim Garments  Ltd.   No explanation in the  

pleading as to what exactly is the implication of the statement  

extracted  above  is  available.   Assuming  for  the  sake  of  

argument, the letter seeks to convey that the bills of entry for  

three  different  consignments  had  been  presented  by  the  

shipping agents of M/s. Azim Garments Ltd. and cleared the  

goods covered by those bills of entry, there is nothing in the  

letter to indicate that the goods covered by the said bills of  

entry are the goods which are covered by the four consignment  

notes which are in issue in this appeal.

45. The  document  purports  to  be  the  internal  

correspondence  between  the  two  officers  of  the  Customs  

department of Bangladesh, no doubt purportedly with a copy  

marked  to  the  appellant  herein.   There  is  no  pleading  

explaining the occasion for such a correspondence.  The proof  

of  public  documents is  required to be made in the manner  

specified under Section 78 of the Evidence Act.   Sub-section  

(6)  stipulates  the  mode  of  proof  of  public  documents  other  

than those mentioned in sub-section (4) of a foreign country.

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“Section 78. Proof of other official documents.—The following  public documents may be proved as follows.—

(1) to (3) x x x

(4) The  acts  of  the  Executive  or  the  proceedings  of  the  Legislature of a foreign country,—

by  journals  published  by  their  authority,  or  commonly  received in that country as such, or by a copy of certified  under  the  seal  of  the  country  or  sovereign,  or  by  a  recognition thereof in some Central Act;

(5) x x x

(6) Public  documents  of  any  other  class  in  a  foreign  country,—

by the original,  or  by a copy  certified  by the legal  keeper  thereof, with a certificate under the seal of a Notary Public,  or of an Indian Consul or diplomatic agent, that the copy is  duly certified by the officer having the legal custody of the  original, and upon proof of the character of the document  according to the law of the foreign country.”     

46. There  is  nothing  on  record  to  establish  that  the  

abovementioned  letter  has  been  duly  proved  in  accordance  

with Section 78 of the Evidence Act.   

47. For all the above-mentioned reasons, the defence of the  

appellant based on the letter  dated 10.04.2002 (supra)  that  

the appellant had delivered four consignments entrusted to it  

by  the  respondent  at  the  Benapole  Customs  Station,  

Bangladesh cannot be accepted.

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48. The other submission of the appellant that in view of the  

fact that the respondent herein claimed a duty drawback on  

the strength of the export of the goods which are the subject  

matter  of  dispute  in  this  appeal,  the  respondent  cannot  

dispute the fact that the goods were duly exported, i.e. duly  

transported beyond India customs frontier and delivered at the  

Benapole Customs station at Bangladesh.

49. The subject of drawback is dealt under Chapter X of the  

Customs Act 1962.  The expression ‘drawback’ is not defined  

under the Act.  Sections 74 and 75 create a right to claim a  

‘drawback’.   Section  7418 entitles  an  exporter  to  claim  the  

repayment/return  (drawback)  of  98%  of  any  duty  paid  on  

material imported into India when again exported out of India  

18  74. Drawback allowable on re-export of duty-paid goods. – (1) When any goods capable of being  easily identified which have been imported into India and upon which any duty has been paid on  importation, -

(i) are entered for export and the proper officer makes an order permitting clearance and  loading of the goods for exportation under section 51; or

(ii) are to be exported as baggage and the owner of such baggage, for the purpose of clearing  it, makes a declaration of its contents to the proper officer under section 77 (which declaration shall   be deemed to be an entry for export for the purposes of this section) and such officer makes an order   permitting clearance of the goods for exportation; or

(iii) are entered for export by post under section 82 and the proper officer makes an order   permitting clearance of the goods for exportation,ninety-eight per cent of such duty shall, except as  otherwise hereinafter provided, be re-paid as drawback, if -

(a) the goods are identified to the satisfaction of the Assistant Commissioner of Customs or  Deputy Commissioner of Customs as the goods which were imported; and

(b) the goods are entered for export within two years from the date of payment of duty on  the importation thereof :

Provided that in any particular case the aforesaid period of two years may, on sufficient   cause being shown, be extended by the Board by such further period as it may deem fit.

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subject to the various conditions specified under the Section  

and the Rules made thereunder.

50. Section 7519 provides for a drawback to be paid to the  

exporter of  any goods who used any imported material  of  a  

class or description notified by the Government of India in the  

manufacture or processing of the goods which are sought to be  

exported, subject to other conditions stipulated under the said  

Section and the Rules made thereunder.

51. Once again in the case on hand, it is not clear from the  

pleadings  of  the  appellant  whether  the  respondent  herein  

claimed a drawback either under Section 74 or under Section  

19  75. Drawback on imported materials used in the manufacture of goods which are exported. –  (1) Where it appears to the Central Government that in respect of goods of any class or description  

manufactured, processed or on which any operation has been carried out in India , being goods which have  been entered for export and in respect of which an order permitting the clearance and loading thereof for  exportation has been made under section 51 by the proper officer, or being goods entered for export by post  under section 82 and in respect of which an order permitting clearance for exportation has been made by  the proper officer, a drawback should be allowed of duties of  customs chargeable under this Act on any  imported materials of a class or description used in the manufacture or processing of such goods or carrying  out any operation on such goods, the Central Government may, by notification in the Official Gazette,  direct that drawback shall be allowed in respect of such goods in accordance with, and subject to, the  

rules made under sub-section (2).  Provided that no drawback shall be allowed under this sub-section in respect of any of the  

aforesaid goods which the Central Government may, by rules made under sub-section (2), specify, if the  export value of such goods or class of  goods is less than the value of the imported materials used in the  manufacture or processing of such goods or carrying  out any operation on such goods or class of goods, or  is not more than such percentage of the value of the imported  materials used in the manufacture or  processing of such goods or carrying out any operation on such goods or class of  goods as the Central  Government may, by notification in the Official Gazette, specify in this behalf :

Provided further that where any drawback has been allowed on any goods under this sub-section  and the sale proceeds in respect of such goods are not received by or on behalf of the exporter in India  within the time allowed under the Foreign Exchange Management Act, 1999 (42 of 1999), such drawback  shall except under such circumstances or such conditions as the Central Government may, by rule, specify  be deemed never to have been allowed and the Central  Government may, by rules made under sub-section  (2), specify the procedure for the recovery or adjustment of the  amount of such drawback.

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75.  Be that as it may.  In either case, the right to a drawback  

accrues to the exporter once the exporter makes an entry for  

export of the goods under Section 50 of the Act and on the  

making of  an order  by  the  proper  officer  under  Section 51  

permitting clearance and loading of the goods. The scope of  

both of these sections has already been examined earlier in  

this judgment.    

52. Rules are made by the Government of India from time to  

time in this regard.  The Rules currently in vogue are known  

as  the  “Customs,  Central  Excise,  Duty  and  Service  Tax  

Drawback Rules, 1995”, which are made in exercise of the rule  

making  authority  conferred  under  the  various  enactments  

including  the  Customs  Act.   However,  these  rules  are  

subsequent to the export transaction in question.  Neither the  

relevant rules governing the situation on the date when the  

respondent claimed the drawback are placed before us nor is  

there any clear pleading by either party as to the relevant date  

on which such a claim for drawback could be made.  We are  

not sure whether under the rules applicable to the transaction  

in question, whether it is the date of the actual delivery of the  

goods in the foreign country which entitles the exporter to file  

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an application claiming drawback or is it the date of the entry  

of  the  goods for  export  from India.   In  the  absence  of  any  

material on record such as the one indicated above, the mere  

fact that the respondent did claim (the respondent admitted  

that  they  did  claim  a  duty  drawback  as  alleged  by  the  

appellant) a duty drawback does not necessarily lead to the  

inference that the appellant had duly delivered the goods in  

question at Benapole Customs station.

53. Under  the  1995  Drawback  Rules,  which  are  in  force  

today, Rule 13 stipulates that the claim for a drawback can be  

filed  on  the  date  when  the  proper  officer  makes  an  order  

permitting clearance and loading of the goods under Section  

51 of the Act.  We refer to Rule 13 not because it is applicable  

to the facts of the case, but only to demonstrate that the law  

clearly  provides  for  the  date  and  event,  the  happening  of  

which, entitles the exporter for seeking the drawback.

54. In  view  of  the  fact  that  the  appellant  admitted  the  

entrustment of goods by the respondent to the appellant for  

transportation to Benapole (Bangladesh), the burden to prove  

that the appellant satisfactorily discharged his legal obligation  

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to deliver the goods at Benapole (Bangladesh) in accordance  

with law is on the appellant which burden the appellant failed  

to  discharge.   In  our  opinion,  therefore,  the  National  

Commission rightly allowed the claim of the respondent.  We  

do not see any reason to interfere with the same.  Appeal is  

dismissed.  No order as to costs.

………………………….J.                                                           (J. Chelameswar)

………………………….J.       (A.K. Sikri)

New Delhi; November 05, 2014.  

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