TaxTMI 
TaxTMI 
1989 (2) TMI 273
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....n against Order-in-Appeal dated 22-3-1988 passed by the Collector of Customs (Appeals), Madras by which he had confirmed the order of the Deputy Collector of Customs, Customs House, Madras in which the Deputy Collector had held that the Bills of entry filed for the clearance of the consignment of raw silk by appellant JB Trading Corporation as importers cannot be allowed to be noted in the Customs House under the law. 2. The facts in brief are that on 29-9-1986 M/s. Jeena & Co. Customs House agent filed three Bills of entry with invoices dated 4-9-1986 of appellant Brightex (HK) Corporation on behalf of M/s. Continental Silk House. The Bills of entry were accepted by the Customs House. The goods covered by the three Bills of entry were valued at Rs. 3,43,651/-, Rs. 3,45,910/- and Rs. 3,45,792/- c.i.f. Meanwhile information was received to the effect that the said importers were not in existence and import licence was obtained by fraud and mis-representation. The Joint Chief Controller of Imports and Exports also took action to cancel the import licence in the name of M/s. Continental Silk House by way of issue of show cause notice. Show cause notice was not served on the importe....
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....n on 10-9-1987. In their letter dated 19-8-1987, Shri Balani, Counsel for the appellant informed the Deputy Collector of Customs that JB Trading Corporation is the owner of the goods under reference and they should be made a party in the proceedings before the Collector on the basis of certain decisions of the Madras High Court in the case of Indian Overseas Bank v. Collector of Customs, Madras reported in 1984 TAX. L.R. 2427. The Counsel's contention was considered by the Department and he was informed by the Department that the facts and circumstances cited by him were entirely different from those of the present case and the decision of the Madras High Court was not applicable to the present proceedings and hence his request for impleading his client could not be accepted. Thereafter the Collector proceeded to adjudicate the case and held that as the importation of the goods had already taken place in the name of M/s. Continental Silk House against specific licence issued which had since been cancelled by the licensing authorities, the goods were not covered by valid licence and hence ordered absolute confiscation of the goods under Section 111(d)ofthe Customs Act, 1962. Appella....
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....e relied upon the decision of the Supreme Court of India reported in 1983 (13) E.L.T. 1342 S.C.) = AIR 1962 Supreme court 1893 in the case of M/s. East India Commercial Co. Ltd. V. Collector of Customs, Calcutta wherein it was held that licence obtained by mis-representation does not make the licence non-est and that lieence obtained by fraud is only voidable and it is good till avoided in the manner prescribed by law. He also relied upon the decision of the bombay high court in the case of Sampath Raj Dugar v. Collector of Customs, Bombay reported in 1988 (15) ECR 338 wherein the court held that confiscation of the imported goods for an offence committed by a person who is not the owner of such goods is not valid. The learned counsel urged that finding of the High Court in respect of the interpretation of the definition of the term 'importer' under Section 2 (26) in the judgment is important. The court had observed that definition of the expression importer placed the owner before the person who held himself out to be the importer, and that as between the owner and the person holding himself out to be importer, it is the former who takes the precedence. In the present case also M/....
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....6. The learned Counsel contended that such finding was untenable because there was no scope for the appellants herein to have come to know about the F.I.R. being filed against M/s. Continental Silk House as they had independently negotiated for the purchase of the goods with M/s. Brightex (HK) Corporation. 4. In respect of their appeal against order of confiscation passed by the Collector of Customs (Appeal No. C/19/88), the learned Counsel submitted that the Collector failed to appreciate that the appellants being the owner of the goods were entitled under Section 124 of the Customs Act to be heard in the matter and the adjudication order of the Collector has been passed without complying with the provisions of Section 124 of the Act. The Collector, according to the learned Counsel, was in grave error in not affording an opportunity of hearing against the confiscation of the goods. The Collector had failed to consider that M/s. Continental Silk House was never the owner of the goods and could not have therefore been the importer as defined under Section 2(26) of the Customs Act. Therefore, the learned Counsel pleaded that the appellants should be given the opportunity to put fo....
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.... to have been allowed in the light of the decisions relied upon. 6. Shri K.K. Bhatia, the learned S.D.R. appearing for the Department submitted that dealing with the appeal of M/s. Brightex (HK) Corporation, the goods have been imported without any valid licence at the time of import andattracted confiscability in terms of Section 111(d) of the Customs Act, 1962 and whether the goods are to be allowed re-reshipment or not will follow an order of confiscation and the option to be given or not to the parties seeking such a re-export is at the discretion of the adjudicating authority. It cannot be demanded as a matter of right. As for the other submission regarding appellants JB Trading Corporation, the learned S.D.R. urged that the definition of the term "import", "imported goods" and "importer" occurring in sub-section 23, 25 and 26 of Section 2 of the Customs Act, have to be considered in harmony. Import means bringing into India from a place outside India. Imported goods means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption. The term importer specifies in relation to any goods at any time between th....
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....y fraud or mis-representation that basis disappears and that it would be absolutely unreasonable that such licence should be allowed to continue. The learned S.D.R. further submitted that this finding of the High Court have not been up set by the order of the Division Bench. 7. The learned S.D.R. further had objection to the appearance of the Counsel to represent the foreign supplier Brightex (HK) Corporation. He pointed out that there was no Vakalatnama submitted as per procedure and the status of the person in the firm authorising the Counsel to put in appearance on their behalf is not clear as also where it was that the authorisation was signed. The appellants admittedly are residing abroad. Replying Shri Balani, the learned Counsel urged that the test of the ownership is not the entry in the IGM but the documents of title which appellants JB Trading Corporation possess. Provisions of Section 30 relating to the delivery of import manifest also provide for its amendment. There was an application for such amendment submitted by the Steamer agent for amending the name of the importer in favour ofJB Trading Corporation. There has been no separate order by the Department on this a....
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....l of entry (B/E). The procedure is that the Bill of entry (B/E) should be presented to the Customs House upon which it will be taken up for noting in the IGM. While noting the Bill of entry, the procedure followed is that the particulars in each B/E such as name of vessel, port of shipment, name of importer etc. etc. are checked with the corresponding details in the original IGM. If these are in order, the entry in the manifest along with the name of the party and its address and the Customs House Agent's name, date of presentation of the B/E is entered in the IGM. From this it is clear that only if the details furnished in the B/E agree with those in the IGM, noting will be made. Amendments in the manifest are resorted to only in certain cases as per the provisions of Section 30 (3) of the Customs Act, 1962. It is dear from Section 30 (3) that if the import manifest is in any way incomplete or incorrect then the proper officer has the discretion to permit the amendment, and that too if there was no fraudulent intention. Coming to the facts of the present case the Bills of entry were filed originally in the name of M/s. Continental Silk House, on 29-9-1986. The Bills of entry were ....
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....en endorsed in their name. They have paid for the goods and the delivery order is also endorsed in their name and as such they should be considered as the importers. This however, has to be considered in the light of the position in law. The goods arrived on 27-9-1986 on which day the import of the goods had occurred, having regard to their entry into the territorial waters of India, and the further step of filing of Bills of entry under Section 46 of Customs Act for the purpose of assessment of the goods so imported in terms of Section 15 of the Customs Act, by filing Bills of entry prescribed in terms of Section 46 thereof had also been taken at that relevant time by M/s. Continental Silk House as the importer, and all the documents indicated them as the importer. In this context, the entry in the import manifest is very relevant for the purpose of Customs Act, because after the completion of the importation upon the goods entering the territorial waters of India, and the filing of the Bills of entry, there cannot be another importer for the very same goods. The provisions of Sale of Goods Act in this context will not be of much assistance to the appellants because this Act appli....
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....t and that the licence obtained by mis-representation is voidable and not void. It may be noted that in that case, at the time of import, the importer namely M/s. East India Commercial Co. had produced the import licence which had been scrutinised by the Customs and clearance of the goods allowed. It is also to be noted that while giving its decision in that case, the Supreme Court also noted that on 1-5-1948, the Govt. of India issued orders authorising the Govt. of India or the CCI&E to cancel the licences obtained by mis-representation and to make them ineffective. The Supreme Court observed, "The specified authority has not cancelled the licence issued in this case on the ground that the condition has been infringed." Therefore, it is seen that M/s. East India Commercial Co. case is not on all fours with the present case because, firstly, the licence issued to M/s. Continental has never been produced for scrutiny by the Custom House in this case and the goods had not been allowed clearance at all. Secondly, there was in fact an order by the competent licensing authority to cancel the licence because it had been obtained fraudulently. On the other hand, the facts of the Fedco ca....
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....d clearance of the goods as importer thereof. It is noted in the case of Sampat Raj Dugar, the importer of the goods against advance licence claimed right to take delivery of the goods, and when the proceedings were initiated against him by the Customs authorities, he abandoned the goods, where-after the foreign supplier of the goods came on the scene and participated in the adjudication proceedings to stake his claim as owner of the goods for re-export thereof. In the present case the Bills of entry filed by the importer M/s. Continental Silk House was never cancelled and nor was there any abandonment of the goods by the importer, and the foreign supplier did not at all make himself a party to the adjudication proceedings as owner of the goods and is hence distinguishable. In the other case, S. Narayanan v. Collector of Customs, Madras, the question whether the original importer having not come forward to clear the goods, another importer can take that place, was never an issue before the High Court. On the other hand the whole issue therein was with reference to valuation of the goods as the Court addressed to itself the question involved in that case namely whether valuation of ....
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....making ingenious attempts to clear the goods which have been illegally imported into India by a fictitious firm on the strength of forged documents concerning which R.C. No. 19 of 1986 is pending. There is absolutely no scope for the petitioner to claim the right of an 'Importer'; more so, after the first information report came to be filed on 2-12-1986 while the invoices of the petitioner bear the dates 15-12-1986 and 16-12-1986. 'Fraud is infinite in its variety and this is one such variety". In the circumstances, on a total consideration of the evidence, the findings of the lower authority that Bills of entry filed by appellants JB Trading Corporation could not in law be permitted to be noted and further processed is well founded and upheld. 9. The case of the appellant Brightex (HK) Corporation is that as the owner of the goods, re-shipment requested for by them ought to have been acceded to, as they were the owner of the goods as the supplier who had not parted with the title thereof for-the part of the consignment. The learned S.D.R. raised preliminary objection that there was no Vakalatnama in respect of this appellant. Examining this objection we find that proviso to Rul....
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....y served with a notice, did put in an appearance during the adjudication proceedings through counsel and was heard his contentions dealt with by the Collector in his adjudication order and his specific request for re-export dis-allowed. There was not such participation in the adjudication proceedings before the Collector in the present case by the appellants Brightex (HK) Corporation. It is seen from the records that even in October 86 through their own Bankers, the appellantsBrightex (HK) Corporation came to know that M/s. Continental Silk House did not exist in the address given, and yet the appellants did not take any efforts to find out whether Bills of entry have been filed for the clearance of the goods or to notify the Customs, and it was only on 4-2-1988 a letter was addressed to the Collector of Customs, Madras containing their request for re-export of the goods. By that time the Collector had already adjudicated the case by his order dated 15-9-1987. The conduct of the appellants is somewhat strange considering the value of the goods involved. It is equally strange that they had not reacted immediately because we find that the order placed by M/s. Conttnental Silk House d....