TaxTMI 
TaxTMI 
TaxTMI 
2011 (3) TMI 1395
X X X X Extracts X X X X
X X X X Extracts X X X X
....to enable the first respondent to effect import and that licence enables the import of Maize on or before 31-3-2011. 3. The petitioner has entered into an agreement with the first respondent on 7-10-2010 for the purpose of carrying on the trade in importing the said goods. Under the agreement, the first respondent has undertaken to import 3000 MTs of Maize (Corn) at the rate of USD 565 per MT in Chennai Port/Nheva Port at Mumbai valued at USD 16,95,000, which is equivalent to Rs. 7,89,87,000/- and the concessional rate of duty is as per the notification issued by the Government of India for the financial year 2010-2011 in Notification No. 33 of 2010, dated 12-3-2010. One of the main condition for such import is that the import must be for the utilisation of the actual user and the same has to be completed on or before 31-3-2011. 4. After getting remittance of the amount of invoice, the first respondent, who acts on behalf of the petitioner, has to clear the goods. Under the terms of the agreement, especially Clause 20, the petitioner has given an undertaking to abide by the various circulars, notifications, etc. issued by the Government of India from time to time. That ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... before marketing. 8. It is also brought to the notice of this Court that it is due to the steps taken by the second respondent, the first respondent has handed over the licence issued by the licensing authority, namely the Ministry of Commerce, to the second respondent and in view of the same, in spite of the goods reaching the port of destination, the first respondent is unable to take delivery and with the result, the contract between the first respondent and the petitioner could not be given effect to, especially when the goods are perishable in nature and the goods, as per the terms and conditions of the licence, are to be cleared on or before 31-3-2011, viz., today, failing which the very purpose of the contract of business becomes thwarted. Therefore, the petitioner has filed the present writ petition for a direction against the first respondent to retrieve the original licence handed over by the first respondent to the second respondent, so as to take delivery of the imported maize for the period 2010-2011 before 31-3-2011 in terms of the agreement dated 7-10-2010. 9. At this juncture, it is relevant to point out that when the second respondent has taken such st....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he provisions of he Act and the licensing authority must take appropriate action in the manner known to law. As per Section 28 of he Act, unless proper show cause notice is issued, which is the starting point of adjudication, in which event the petitioner will have to submit his objections by way of defence, even the licensing authority cannot take appropriate final action under Section 124 of the Act either for confiscation of the goods or to pass any order in the nature of penalty. 14. He would also submit that the term "actual user", which is the subject matter of condition under the licence is being misunderstood by the department. The term "actual user", according to him, does not mean that the petitioner itself has to use it. The actual user need not always subject the goods imported to any manufacturing process. According to him, as per the terms of the Foreign Trade Policy, even a small instance of re-packing of the goods imported would amount to processing. Therefore, as per the submission of the learned Senior Counsel, what the petitioner does is that, after import of the goods, it takes it to the godown and fills the same in smaller quantities in packages and that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-2011, viz., the consignment must be cleared before the said date and therefore, there is an urgency. 20. Under the terms of the contract between the petitioner and the first respondent, under which the first respondent is acting as an agent of the petitioner in making import, the petitioner has given an indemnity in favour of the first respondent in Clause 23, which is as follows: "23. It is further agreed by "HSS" that in the event STC is required to incur any expense for defending its interest at any forum, "HSS" undertakes to indemnify STC without any protest or demur and shall always keep STC fully indemnified and agree to hold STC harmless against any cost including taxes/duties, loss, claim, damage, demurrage, costs, penalties, liabilities, legal cost, short shipment, claims on account of quanfity/quality/making/ weight/specifications etc., of whatsoever nature." 21. That apart, it is no doubt true that the petitioner has undertaken to follow and act as per the notifications and circulars issued by the Director General of Foreign Trade from time to time. Therefore, it is not certainly open to the petitioner to say that the second respondent has no jurisdict....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-packs the same, it involves manufacture process so as to treat it as actual user. 25. Be that as it may, these rival submissions made by the respective counsel are to be ultimately decided by the licensing authority on investigation and on adjudication process being completed and it is not for this Court, at this stage, to express any opinion on the merits of the same. But the fact remains that as on date the adjudication process has not yet commenced. As it is stated earlier, it is to be reiterated that except the summons issued under Section 108 of the Act, for which the petitioner has given explanation, neither the second respondent nor the licensing authority has taken any action. It does not mean that the second respondent or the licensing authority has no jurisdiction to continue. It is always open to the licensing authority as well as the second respondent to continue the process, but that must be in accordance with law. 26. As it is seen, under Section 28 of the Act notice will be issued in respect of the short levy, erroneous refund, etc. and Section 124 of the Act enables the issuance of show cause notice by the authority concerned before confiscation of good....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rt in case of Titan Medical Systems Pvt. Ltd. v. Collector of Customs, New Delhi, 2003 (151) E.L.T. 254 (S.C.) has held that once an advance licence was issued and not questioned by the licensing authority, the Customs authorities cannot refuse exemption on an allegation that there was no misrepresentation. If there was any misrepresentation, it was for the licensing authorities to take steps in that behalf. In the present case, the licensing authority sought to cancel the licenses, but in appeal, the order was set aside and remanded for de novo consideration. No further order has been passed thereafter. In the circumstances, till today the licenses are valid. Even if the license was subsequently cancelled, the Supreme Court in the case of Sampat Raj Duggar v. Union of India, 1992 (58) E.L.T. 163 (S.C.), following East India Commercial Co. Ltd. v. Collector, 1983 (13) E.L.T. 1342 (S.C.) = 1963 (3) SCR 338 has held that on the date of the import the goods were covered by a valid import license. The subsequent cancellation of a licence is of no relevance nor does it retrospectively render the import illegal." 28. The Supreme Court in Titan Medical System Private Limited v. Coll....