TaxTMI 
TaxTMI 
TaxTMI 
2011 (1) TMI 1303
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....hich fulfilment of Export obligation was on the basis of misstatements/misdeclaration by submitting forged/fake export documents before the DGFT is to be treated as a valid and legal document? ii. Whether the import made on the authority of Advance licence obtained/transferred on the basis of forged/fake/manipulated export documents are lawful imports and exempted from payment of duty under Notification No. 204/92-Cus., dated 19-5-1992? iii. Whether the importer as defined in Section 2(26) of the Customs Act, 1962 includes the licence holder for the purpose of Notification 204/92-Cus., dated 19-5-1992 being any person holding himself to be the importer and who had obtained the Advance licence for duty free import subject to fulfilment of export obligation but for transferring the licence to a third party? iv. The letter and spirit of the impugned order is contrary to the settled principles of law. The order would convey a meaning that a fraudster, after successfully perpetrating the fraud, sells the fruit of the fraud to a third party and this transfer nets him double enrichment - that a pecuniary gain....
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....be issued to the respondents which culminated into an order made by the adjudicating authority whereby duty demand of Rs. 19,27,404/- came to be confirmed against the respondent M/s. Rajnarayan Jwalaprasad in terms of Section 28 of the Act together with interest at the rate of 24% per annum in terms of Para 128A(iii)(a) of the Export-Import Policy 1992-97. It was held that the goods being 132.3 metric tonnes of HDPE with CIF value of Rs. 29,77,027/- were liable to confiscation under Section 111(o) and 111(m) of the Act. Personal penalties under Section 112(a) of the Act came to imposed on the respondent and six other co-noticees as follows: rupees twenty-five lakhs on the respondent M/s. Rajnarayan Jwalaprasad, rupees twenty-five lakhs on Shri Sailesh Agarwal, rupees five lakhs on Shri Prakash Agarwal, rupees five lakhs on Shri Brijesh Agarwal, rupees two lakhs each on M/s. Kuppi Utpadan, Shri Balkishan Devidayal and M/s. ACT Shipping Ltd. Being aggrieved, the respondent and other co-noticees preferred appeals before the Tribunal which came to be allowed by a common order whereby the Tribunal set aside the duty demand on the respondent as well as the penalties imposed on the respon....
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....facts of the present case, though it is the case of the revenue that the endorsement on the advance licences has been obtained by submitting fraudulent documents, the licensing authority, namely, the Director General of Foreign Trade has not taken any steps for cancellation of the licence. The licence bore the endorsement of transferability made by the licensing authority and had been validly transferred in terms of the Exim Policy. The goods imported under the said licence were, therefore, imported under a valid licence and hence, the demand of duty was not justified. Inviting attention to the impugned order of the Tribunal, it was submitted that the Tribunal was justified in holding that the respondent herein cannot be held liable to import duty since no goods were imported by it. Reliance was also placed upon a decision of the Supreme Court in the case of Titan Medical Systems Pvt. Ltd. v. Collector of Customs, New Delhi, 2003 (151) E.L.T. 254 (S.C.) for the proposition that once an advance licence is issued and not questioned by the licensing authority, the customs authority cannot refuse exemption on an allegation that there was any misrepresentation. It was submitted that the....
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....icence had contravened the provisions of the notification dated 10th May, 1992 inasmuch as the advance licence covering the imports was forged to the extent, that bond waiver and transferability of the said licence was obtained fraudulently incorporating the details of export which never took place. 7. The Adjudicating Authority confirmed the duty demand against the respondent M/s. Rajnarayan Jwalaprasad in terms of Section 28 of the Customs Act, together with interest and penalty and held the goods 132.2 M Tons of HDFE with CIF value of Rs. 29,77,027/- liable to confiscation and imposed personal penalties on the above-referred co-noticees as noted earlier. 8. The Tribunal in the impugned order took note of the fact that the respondent M/s. Rajnarayan Jwalaprasad was an Advance Licence holder under the DEEC Scheme, which was transferred to M/s. Aar Vee Plastics as per the EXIM policy. It was M/s. Aar Vee Plastics who had actually filed the Bill of Entry and cleared the imported goods and sold them thereafter to Kuppi Utpadan. Therefore, since no goods were imported by it, the demand of import duty from the respondent could not be sustained. The Tribunal further held tha....
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....id licence, instead of importing the HDPE, Kuppi Utpadan agreed to purchase the same from Aar Vee Plastics and entered into an agreement to purchase a consignment of 144 MTs of HDPE from it, out of which it desired to clear 132.3 MTs against the said licence from the Customs-cum duty paid warehouse where the said 144 MTs of HDPE had been deposited after import by Aar Vee Plastics. Since high sea sale was not permissible on imported goods warehoused earlier, Aar Vee Plastics filed Ex- bond Bills of Entry for home consumption and cleared 132.3 MTS of the said goods against the said licence and the balance quantity of 144 MTs was cleared from the warehouse on payment of Customs Duty by M/s. Kuppi Utpadan. The Commissioner imposed a penalty on M/s. Kuppi Utpadan and Shri Balkishan Devidayal holding that they were beneficiaries of the manipulation as set out in Paragraph 69.1 of his order. The Tribunal was of the view that the licence had been transferred to M/s. Kuppi Utpadan and a transferee cannot be held liable to duty and in any case duty demand had not been made against M/s. Kuppi Utpadan or Balkishan Devidayal who were found liable to penalty under the provisions of Section 112(a....
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....f Rs. 19,27,404/- on the basis of value as per the High Sea Sale Agreement was not levied because the importer claimed exemption in terms of Notification No. 204/92-Cus., dated 19th May, 1992 on the basis of wilful misstatement and misrepresentation of facts by the licence holder i.e., the respondent herein. That the wilful statement and suppression of facts by the respondent resulted into endorsement of transferability on the licence by the office of Joint D.G.F.T., Mumbai whereupon the licence was transferred by the firm and the goods were imported duty free by M/s. Aar Vee Plastics, Delhi/M/s. Kuppi Utpadan. It is in the background of aforesaid facts that the duty of Rs. 19,27,404/- was sought to be recovered in terms of the proviso to Section 28(1) of the Customs Act, 1962. 11. A perusal of the record of the case indicates that the advance licence in question had been made freely transferable in terms of Para 127(1)(A) of the Handbook by the licensing authority namely, the Joint D.G.F.T., Mumbai. Thus the transfer of the Advance Licence by the respondent to M/s. Kuppi Utpadan was a valid transfer as the Advance Licence bore the endorsement of transferability made by the c....
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.... statement on the part of the importer concerned; or when it is found that the licensee has not complied with any (ii) one or more of the conditions subject to which the licence may have been issued. SCHEDULE Clauses Licensing authority Cancelling authority Clause (xiii) The Central Government. Any officer authorizes by Chief Controller of Imports and/or Govt. of India." This order, therefore, authorised the Government of India or the Chief Controller of Imports to cancel such licences and make them ineffective. The specified authority has not cancelled the licence issued in this case on the ground that the condition has been infringed. We need not consider the question whether the Chief Controller of Imports or the Government of India, as the case may be, can cancel a licence after the term of the licence has expired, for no such cancellation has been made in this case. In the circumstances, we must hold that when the goods were imported, they were imported under a valid licence and therefore it is not possible to say that the goods imported were those prohibited or restricted by or under Chapter IV of the Act within the meaning of Clause (8) of Section 167 of the Sea Cu....
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....fit under the said licence. The Tribunal was therefore, justified in setting aside the duty demand. 16. Insofar as the imposition of penalty under Section 112(a) of the Act on the respondent and other co-noticees is concerned, Section 112 of the Act provides for levy of penalty for improper importation of goods, etc. Clause (a) thereunder lays down that a person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111, or abets the doing or omission of such act shall be liable to penalty as provided thereunder. Insofar as the respondent is concerned, the facts emerging from the record indicate that it has not imported the goods in question. Hence, the question of improper importation would not arise in the case of the respondent. The penalty has been levied on the respondent on the ground that it had filed forged documents for obtaining endorsement of transferability on the advance licence in question. Obtaining endorsement of transferability of the advance licence from the licensing authority would not attract the provisions of Section 112(a) of the Act in respect of goods imported by th....