TaxTMI 
TaxTMI 
2026 (2) TMI 443
X X X X Extracts X X X X
X X X X Extracts X X X X
....ring the course of investigation, it was seen that M/s. M.R. & Co. the appellant herein had imported a total of 13940 kilograms of raw silk yarn totally valued at Rs.1,64,31,703/- duty free against DFRC licenses procured by him from M/s. Shee Kuberappa & Sons through Telegraphic Release Advise (TRA). Based on the cancellation of licenses by DGFT, the appellant was issued a Show Cause Notice proposing to deny the benefit of the license and to demand duty, interest etc. After due process of law, the Ld. Commissioner denied the benefit of duty exemption availed for import of a total of 13940 kgs of raw silk yarn and demanded duty of Rs.50,39,604/- along with interest and imposed equal penalty under se. 114A of the Customs Act, 1962. The goods were also held to be liable for confiscation. Aggrieved by the said order, the appellant has preferred this appeal. 3. Shri S. Murugappan, Ld. Advocate appeared for the appellant and Shri Harendra Singh Pal, Ld. Authorized Representative appeared for the respondent. 3.1 Shri S. Murugappan, Ld. Counsel submitted that the appellants are importers and traders in raw silk. They imported six consignments of raw silk by using DFRC and DFIA licenc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd have carefully considered the appeal and the rejoinder by revenue. We find that this is a case where a scrip validly issued by DGFT authorities were found to have been obtained by misstatement or misrepresentation etc by the original exporter M/s. Shree Kuberappa & Sons. We find that a similar legal issue was examined by a Coordinate Bench of this Tribunal in its order pertaining to The India Cements Ltd. Vs Commissioner of Customs, Chennai [FINAL ORDER NOS. 40844-40845/2025, Dated: 21.08.2025]. Relevant portion of the Order is extracted below: "5. Where the licence/scrip were obtained by misrepresentation and fraud by the original licence holder from the licencing authority and later sold to innocent transferee importers, which remains valid at the time of import having not been cancelled by the appropriate authority. 5.1 In Titan Medical Systems Pvt Ltd Vs Collector of Customs, New Delhi - 2003 (151) ELT 254 (SC), the Apex Court examined an appeal where CEGAT have held that the appellant - M/s. Nicolian Brothers had made a misrepresentation to the licensing authority and that licence had been obtained on the basis of such misrepresentation. The misrepresentat....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 5.3 The appellant had relied upon the judgment of the Hon'ble High Court of Bombay in the case of TAPARIA OVERSEAS (P) LTD. Vs UNION OF INDIA [2003 (161) E.L.T. 47 (Bom.)]. The facts of the case were that the petitioners had acquired 2 licences issued under the provisions of Import (Control) Order, 1955 (Order), originally issued in favour of one M/s. Suraj Textiles Traders, New Delhi. Before acquiring the licence the petitioners sough confirmation as to whether the licences were issued as per ITC regulations. The Joint Chief Controller of I.& E., New Delhi, expressly confirmed that two licences were issued to M/s. Suraj Textile Traders, New Delhi. On import of the goods, the Customs Authorities inspected the goods but did not clear the same, though they found that the goods imported were as per specification. The petitioners subsequently came to be served with the copy of an order addressed to the original licence holders; whereby the Deputy Chief Controller of I. & E., New Delhi had informed suspension of the operation of the Licences issued to the original licence holder in exercise of powers conferred under clause 9(3) of the Order on the ground that it was obtained by fraud. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be read along with Section 111 of the Act which deals with goods brought from a place outside India. This section is in Chapter XIV of the Act which provides for confiscation of goods and conveyances and imposition of penalties. Under Section 111(d) of the Act any goods which are imported contrary to any prohibition imposed by or under this Act or any other law for the time being in force shall be liable to confiscation. The goods which have been seized in this case cannot be imported into India without a licence under the Import Control Act and there is therefore a prohibition in law for the import of the goods except in compliance within Import Control Act. It is true that the goods were cleared from the Customs barrier on the basis of import licence produced by the petitioner, but the respondents' case is that the import licences, on the basis of which the goods were cleared were not genuine. The licences which were utilised by the petitioner for the purpose of clearing the goods, according to the respondents, were forged licences. If a licence is forged it is no licence at all, and any import of goods, of which the importation is prohibited by law, cannot be a valid import....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de on a licence lawfully obtained. If a licence is forged, and I wish to make it clear that in this case I do not say that it has been forged, as that would be a matter for determination in other proceedings against the petitioner, there is no licence at all. The respondents' case is that the licence used by the petitioner is a forged one, and if such forgery is proved in appropriate confiscatory and penal provisions of the proceedings, the import of the goods would be unlawful and would attract the Customs Act and other statutes. (emphasis added) 6.2 In Munjal Showa Ltd. vs. Commissioner of Cus. & C. Ex. (Delhi-IV), [2022 (382) E.L.T. 145 (S.C.)], the Hon'ble Supreme Court ruled on a case involving forged DEPB scrips and Transfer Release Advices, which were not issued by DGFT but were used to clear imports duty-free. The Apex Court held; "8. From the judgment and order passed by the Tribunal and even from the findings recorded by the Department, it has been found that the DEPB licenses/Scrips, on which the exemption benefit was availed of by the appellant(s) (as buyers of the forged/ fake DEPB licenses/Scrips) were found to be forged one and it was f....