TaxTMI 
TaxTMI 
2016 (12) TMI 378
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....tion 36/96-Cus. The appellant had obtained the said REP licence after it had changed hands many times by open market transactions without involving office of DGFT. Notices were issued to the appellants seeking to confiscate the goods and impose penalty under Section 111 or 112 of the Customs Act. It was alleged that the appellant had purchased the said licences at a premium of 3-4% which was less than the market rate of premium which was 6%. On these grounds, it was alleged that the appellants were aware of the doubtful nature of the licences. The diamonds imported against REP licences were held to be liable to confiscation and various redemption fines were imposed on the appellants. Penalties under Section 112 of the Customs Act were also ....
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..... counsel argued that the notice is barred by limitation as the same has been issued after the period of five years. Ld. counsel argued that the maximum limitation period of five years which is applicable under Section 28 will also apply to the case of confiscation and penalty. Ld. counsel also argued that goods cannot be confiscated and redemption fine cannot be imposed as the goods are not available for confiscation. For these arguments ld. counsel relied on the decision of the Hon'ble High Court of Bombay in Finesse Creation Inc. 2009 (248) ELT 122 which has been confirmed by the apex court in 2010 (255) ELT A120 (SC). 3. Ld. AR relied on the impugned order. In the written submission, ld. AR reproduced certain para of the impugned o....
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....with the result that the goods should be deemed to have been imported without licence in contravention of the order issued under Section 3 of the Act so as to bring the case within Clause. (8) of Section 167 of the Sea Customs Act. Assuming that the principles of law of contract apply to the issue of a licence under the Act, a licence obtained by fraud is only voidable : it is good till avoided in the manner prescribed by law." The decision of the Hon'ble apex court has been interpreted by the Hon'ble apex court in Sneha Sales Corporation (supra). The said decision while interpreting the decision of East India Commercial Co. Ltd. observed as follows:- 5.In the aforementioned decision of this Court it has been clearly laid down tha....
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....on. This is clear from the fact that the fraudulent submission of forged bank document/ shipping bills by the original exporters who obtained the REP licence was unearthed much later by the detailed enquiry of the officers. We find the original authority extensively quoted and relied on the decision of Hon'ble Supreme Court in CC (Prev.) vs. Aafloat Textiles (I) P. Ltd. 2009 (235) ELT 587 (SC) = 2009-TIOL-42-SC-CUS. We have perused the said decision. The Hon'ble Supreme Court in that case was dealing with a Special Import Licence (SIL) which was forged and was never issued by the DGFT. The signature and security seal of the authority was forged. Now in the present case, the REP licences were issued by the competent authority and as ....
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....7 of the Sea Customs Act. The Apex Court in the case of Union of India vs. Sampat Raj Dugar -2002-TIOL-141-SC-CUS-LB 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." 6. In the instant case the goods which were impor....