1996 (3) TMI 137 - HC - Customs

Summary

Issues Involved:
1. Duty-free clearance of imported goods against specific licences.
2. Transferability and validity of the licences.
3. Liability for payment of duty if conditions are not met.
4. Competency of Customs authorities to demand duty.
5. Allegations of misrepresentation and fraud by NALCO.

Summary:

1. Duty-free clearance of imported goods against specific licences:
The petitioners, Fair Exports Private Ltd. and M/s. Raj Exports, sought a writ for duty-free clearance of goods imported against specific value-based advance licences. They argued that the goods should be cleared duty-free as the licences were endorsed as transferable by the Director General of Foreign Trade (D.G., Foreign Trade).

2. Transferability and validity of the licences:
The petitioners claimed that the licences purchased from NALCO were valid and transferable. They contended that any defect in the procurement or transfer of the licences should result in the duty being recovered from NALCO, not the petitioners. NALCO had reversed Modvat concessions, thus, there was no defect in the transfer of the licences.

3. Liability for payment of duty if conditions are not met:
The Customs authorities opposed the petitions, arguing that the petitioners had no locus standi as they were not the importers. They contended that the licences had been transferred multiple times and the final transferee, Hindustan Lever Ltd., was the importer. The authorities claimed that NALCO had availed Modvat concessions, violating the conditions of the licences, and thus duty exemption was not applicable. NALCO had also misdeclared that they had not availed Modvat credit, which was later reversed.

4. Competency of Customs authorities to demand duty:
The court held that the Customs authorities were competent to demand duty as the exemption notification u/s 25 of the Customs Act, 1962, and the EXIM Policy conditions were not fulfilled. The court found that NALCO had availed Modvat credit, which was a violation of the conditions for duty exemption under Notification No. 203/92.

5. Allegations of misrepresentation and fraud by NALCO:
The Customs authorities argued that NALCO had misrepresented and misdeclared facts to obtain the licences and their transferability. The court agreed that the Customs authorities were justified in demanding duty due to the violations. The court also noted that the dispute between the petitioners and NALCO regarding payment of duty should be resolved in an appropriate forum, not in the writ jurisdiction.

Conclusion:
The court dismissed the writ petitions, upholding the Customs authorities' demand for duty. It emphasized that the petitioners could seek relief against NALCO in a proper forum for any claims regarding the transfer of licences and payment of duty. The court also highlighted the need for the Customs and Foreign Trade authorities to resolve such disputes efficiently to avoid unnecessary litigation.