TaxTMI 
TaxTMI 
2026 (5) TMI 1684
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....114AA of the Customs Act were also imposed upon the appellant. 2. It transpires from the record that on 24.09.2014, Director General of Foreign Trade [DGFT] issued a duty free license under Focus Market Scheme for Rs. 20,65,447/- to M/s Siddharth Corporation for registration at Chennai Port. On 30.09.2014, the license was utilized for payment of duty of Rs. 20,59,589/-. Subsequently, the said license was re-registered by the Customs Authorities at Nhava Sheva Port on 26.12.2014 under Registration No. 3000585705. The appellant had engaged a customs broker for clearance of its consignments through Bill of Entry No. 7892759 dated 05.01.2015. The appellant had purchased the said license which was registered at Nhava Sheva Port through a customs broker for valuable consideration. The Proper Officer granted the consignment an out of charge order. 3. It further transpires that in June, 2018 Special investigation and Intelligence Branch, ICD, Tughlakabad, initiated investigation and a show cause notice dated 01.01.2020 was issued to the appellant demanding customs duty of Rs. 19,79,381/-, paid by way of debit from the license by invoking the extended period of limitation contemplated....
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....r dated 15.04.2021 passed by the Joint Commissioner. The said paragraph is reproduced below: "2. The Commissioner of Customs, NS-II, JNCH, Special Investigation and Intelligence Branch, Nhava Sheva vide their letter F. No. SG/INV-34/2017SIIB(X)JNCH dated 08.09.2019, intimated that their office had received a draft local audit inspection report on the online records of EDI system for the license/duty scrips issued by the DGFT, Mumbai. It was seen from the report that license/duty scrips No. 0319008582 dated 24.09.2019 was initially registered at Chennai Port (INMAA1) and subsequently, the same found re-registered at Nhava Sheva Port (INNSA1). The license re-registered at Nhava Sheva Port had been utilized for payment of duty to the tune of Rs. 19,79,380.60/- & Rs. 85,777.30/-against two Bill of entries/RA No. 7892759 dated 05.01.2015 and No. 8311586 dated 16.02.2019 respectively at this port i.e. ICD Tughlakabad (INTKD6). Further, they requested to initiate recovery proceedings against the said bill of entries." (emphasis supplied) 11. It is also not in dispute that the said license was earlier registered at Chennai port and that duty amount had been paid by utilizing....
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....cantile transactions, as well as in those connected with real properties, the general rule undoubtedly is, that a person cannot transfer to another a right which he does not himself possesses. The rule of caveat emptor spells out two exceptions to the rule, one in cases for encouragement of commerce such as sales in market overt, and other to the transfer of negotiable instruments. Take for example, if the seller has endorsed and delivered to the buyer the Bill of Leading or any other documents of title to the goods and the buyer has endorsed and delivered it to his sub buyer, then the sub buyer, provided he has taken the document in good faith, as well as for valuable consideration, is entitled to the goods free from any right in the original seller to stop them, and thus his position is better than that of the original buyer, same is a position of sales in market-overt. Without attempting to enumerate the various rights which are assignable, either by the express act of the parties, or by the operation of law, we may observe, generally, the maxim assignatus utitur jure auctoris, i.e. an assignee is clothed with the rights of his assignor is subject to many restrictions, ....
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....that the date of import of goods would be the date on which the Bill of Entry was presented under section 46. This legal position is clear from the decision of the Apex Court as laid down in Union of India v. Apar Ltd. 1999 (112) E.L.T. 3 (S.C.) and Garden Silk Mills v. Union of India - 1999 (113) E.L.T. 358 (S.C.). The same is the view taken by the Apex Court in Sampat Raj Durgar case (cited supra). Imports against replenishment Licences were permitted duty free if the importers produced an import Replenishment Licence the goods or the materials were imported into India. In the instant cases when the goods were imported into India, and even when the Bills of Entry were filed, neither were the licences suspended nor the same cancelled. In all these cases, Bills of Entry were filed by the petitioners well before the suspension and/or cancellation of the licences in question, thus the imports were made under valid licences, the goods could not be subjected to levy of customs duty in the peculiar facts and circumstances of the cases in hand." (emphasis supplied) 15. The Division Bench also referred to the decision of the Punjab and Haryana High Court in Commissioner of Customs v....
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.....T. 587(S.C.)] The Division Bench also distinguished the decision of Punjab and Haryana High Court in Friends Trading Co. vs. Union of India [2011 (267) E.L.T. 33 (P&H)] and the decision of the Tribunal in Mercedes Bench India Private Ltd. and others vs. Commissioner of Customs, Delhi [(2022) 1 Centax 328 (Tri.-Del.)] and ultimately held: "31. What, therefore, transpires from the aforesaid decisions is that wherever the licensing authority has issued the licence/DEPB scrip on the basis of which the exemption is sought from customs duty, either by the original licence holder or by the transferee, even if the licence/DEPB scrip have been obtained by producing fraudulent/fake export documents or bank documents, then during the validity of the licence/scrip the exemption cannot be denied and the goods cannot be confiscated. This would be so, even if the licence is cancelled by the licensing authority subsequently after the imports have been effected. What is relevant is a valid licence/DEPB issued by the licensing authority and presentation of the same at the time of import of the goods and at the time of filing the Bill of Entry. 32. The position would be totally dif....