TaxTMI 
TaxTMI 
TaxTMI 
2016 (4) TMI 99
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....e of these licenses have been used by the appellant for import of gold without payment of duty. Common proceedings were initiated against various parties through show cause notice dated 31.07.2002. Notices were issued to the firms and persons involved in obtaining the REP license based on forged documents and also to importers who purchased the REP licenses and utilised the same for importing gold without payment of duty. The present appellant was one of the noticees with reference to import of gold covered by 21 REP licenses valued at Rs. 5,17,06,898/-. The duty involved which was not paid on the basis of such REP licenses is Rs. 2,38,14,129/-. The case was adjudicated by the Commissioner vide order dated 13.08.2004. In respect of the present appellant he held that the goods (gold) imported against 21 REP licenses are liable to confiscation under Section 111(o) of the Customs Act, 1962; confirmed demand of Rs, 2,38,14,129/-; appropriated the amount of Rs. 52 lakhs already deposited towards the confirmed demand and imposed a penalty equal to duty under Section 114(A) of the Act. On appeal the Tribunal vide final order No. 231/2007-Cus dated 11.04.2007 remanded the matter back to th....
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....e licence having been fraudulently obtained". 3. We find that the issue narrows down to the bonafideness of appellant in buying and utilising the REP licences which were obtained based on fabricated forged documents by others. In other words the Tribunal specifically directed whether a transferee has knowledge of fraud by which the licence was obtained from the licensing authority by the transferor, would be a question of fact, which would depend upon the material which is adduced before the adjudicating authority. It was further observed that it is the responsibility of the party who claims bonafide purchase to prove such assertion by showing the bonafide nature of transaction and producing the contemporaneous record for showing the genuineness thereof. 4. With the above position in the background we have to examine the present appeal against the findings in the impugned order. We have perused the impugned order carefully on this issue. Ld. Commissioner recorded the following findings to hold that the appellants had knowledge of licenses having been obtained by M/s Shivam Enterprises and M/s Shyam Exports fraudulently. (a) The debit notes issued by the transferers of RE....
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....d, and the travelling expenditure incurred by the employees of the appellant in delivering such goods. The original copies of all invoices, freight receipts, travel vouchers, statements of all the concerned persons, financial statement of the appellant sales vouchers and delivery receipts etc. have also been stamped by the appellants. (d) The gold was delivered by the appellants employees to Sh. Kulbhusan Sethi who admitted receipt of gold and hence there can be no question about delivery of gold for premium amount. (e) There is no unusual practice in these transactions as the primary documents of the delivery challan is the sales invoices which in the present case is authentic and genuine. The debit notes can easily be substantiated by the books of accounts. (f) Regarding the finding of the original authority about non mentioning of premium rate or amount in the debit notes it was contended that the debit notes issued by M/s Shyam Exports for twelve REP licences. The absolute amount of premium payable is mentioned. (g) Regarding delivery of gold in one case in the name of M/s Sonam Overseas account of M/s Shyam Exports it was submitted that this wa....
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....ernational vs. CC, Amritsar - 2014 (312) ELT 464 (Tri. Del.) and decision of Punjab & Haryana High Court in Friends Trading Co. vs. Union of India - 2011 (267) ELT 33 (P&H). 7. We have heard both the sides carefully and examine the appeal records. We take note that this is a second round of litigation of the same case. As already noted herein above, the first adjudication order dated 13.08.2004 was set-aside and matter was remanded back to the original authority for decision afresh in line with observations made in the final order dated 18.07.2006. We find that the remand directions narrowed down the area of dispute to a point that if a transferee is in any way associated with fraud or knowingly accepts or purchases the license with the knowledge of such fraud no benefit under the licence can be recognised in favour of such transferee. It was also observed by the Tribunal that such a knowledge of fraud would be a question of fact, even if there is no direct evidence for demonstrating such knowledge about the fraud, inference can be drawn on the basis of reliable material which is strong enough to attribute the knowledge of fraud. 8. Thus, we are not to decide the wider issue of t....
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.... find no ground for such presumption. There is no bar in payment through gold especially when the parties involved were in gold business. 11. Regarding the debit note not mentioning the premium rate and not signed by the consignee the appellants explained the position that the transactions are through their commission agent and all the sales invoices of gold towards commission has been correctly captured in all records and admitted by the commission agent as well as the person with whom the commission agent dealt with. Further, the appellants filed a detailed Chartered Accountant certificate on 15.07.2011 as per the order dated 18.05.2011 of the Tribunal. In the said certificate the quantum of commission in rupee terms for each accounting year paid to the two transferors of REP licences have been certified by the Chartered Accountant alongwith the relevant portion of ledger accounts and schedules. We find that the details of gold sold with amounts to M/s Shyam Exports and M/s Shivam Enterprises have been evidenced by the said certificate with supporting documents. 12. Regarding lack of evidence on record to the effect that either the appellant or the commission agent had made any....
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....t is not possible to say that the goods imported where those prohibited or restricted by or under Chapter IV of the Act within the meaning of Clause (8) of Section 167 of the Sea Customs Act". The Apex Court in the case of Union of India vs. Sampat Raj Dugar - 2002-TIOL-141-SC -Cus held that when on the date of import the goods were covered by a valid licence, subsequent cancellation of licence is of no relevant nor does it retrospectively render the import illegal. Again, in CC vs. Sneha Sales Corporation - 2002-TIOL-440-SC-Cus. held that licence obtained by misrepresentation or fraud does not make it non est as a result of its cancellation. As per Section 3 of the Import and Export Act misrepresentation or fraud renders a licence voidable. When the goods were imported and cleared before such cancellation, contravention of import cannot be alleged. 13. Ld. AR relied on the decision of Honble Punjab & Haryana High Court in Friends Trading Co. vs. Union of India - 2011 (267) ELT 33 (P&H) to contend that the appellant cannot escape the liability in view of cancellation of these REP licences by the competent authorities. We have perused the said decision. The Hon'ble High Court di....