TMI Blog1999 (9) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... in question along with some other licence issued to Overseas Enterprises and subsequently cancelling the import licences on the basis of ground that the licence was obtained on the basis of fraud and misrepresentation of facts and that the firm itself is fictitious. 2. Accordingly, notice was issued to the appellant proposing confiscation of the goods on the ground that the licence was not valid for their clearance. Penalty was also proposed on the ground that it acted in collusion with Shyam Bihani and other persons in obtaining the import licence. Shyam Bihani was a broker, through whom the licence was obtained and apparently known to A.G. Khan of Overseas Enterprises. Notice alleged that importer was well aware that bona fide of Mr. Khan and its firm are doubtful; and purchased the licence at rates much cheaper than the rates prevailing in the markets. Adjudicating on the notice the Collector in the impugned order, has held the goods not to be covered by the licence produced and ordered their classification. He has not imposed any penalty on its employee. 3. Mr. Harikumar, Export Manager of the appellants contends that the goods were imported when the licence was valid. Any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ixtures. The application for licence mentioned that goods were used for its own use and are only raw material and accessories; stated that the goods were required for the mill at Yellore in Madras for updating lighting system. The licence was issued on condition that the goods were to be used as accessories in the factory, no portion was to be sold after importation. Proceedings were commenced against the importer on the ground that part of the goods imported had been sold. The notice also alleged that the condition according to which the licence was granted that the goods will be utilised as raw material or accessories in the factory was contravened and the licence had been caused to be issued by fraudulent means and hence the goods were liable to be confiscated. Discussing these aspects, the Court in its majority view held that there was no legal basis for the contention that licence obtained by misrepresentation makes the licence non est, with the result that the goods should be deemed to have been imported without licence. The Court, on the assumption that the principles of law of contract apply to the issue of a licence under the Act, said that the licence obtained by fraud is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the basis of the grant of licence has disappeared. It will be absolutely unreasonable that such a licence should be allowed to continue. We are therefore of opinion that the provision that licence may be cancelled, if it is found, after giving a reasonable opportunity to the licensee to be heard, to have been obtained by fraud or misrepresentation is a reasonable restriction in the interests of the general public on the exercise of the fundamental rights of a citizen guaranteed under Article 19 (1) (f) and 9 (g) of the Constitution. The cancellation being under a valid law there can be no question of any right under Article 31 of the Constitution having been infringed. 8. We are unable to find from this extract and anywhere else in the judgment any support for the proposition put forth by the Departmental Representative. 9. The question before the Bench of the Tribunal which decided Kanta International v. C.C. - 1997 (92) E.L.T. 487 was the same as in East India Commercial Company v. Collector and Fedco Pvt. Ltd. v. S.N. Bilgrami i.e., whether import of goods claimed under a licence prior to its cancellation would be covered by the licence or not? The Tribunal was of the vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cally for cancellation, ab initio, nor did they contain any provision that the effect of a cancellation is to invalidate right from the date of issue, a licence that had been issued and thus render unauthorised any imports that may have been made already, prior to such cancellation. 12. On the contrary, there are many decisions of the Tribunal taking the opposite view, stating categorically that the consequences of cancellation of licence do not reach back so as to affect the imports during the currency of licence. Some of these are K.K. Manufacturing Co. v. C.C. - 1997 (91) E.L.T. 635; Sneh Sales Corporation v. Union of India - 1993 (63) E.L.T. 128. The Bench deciding Kanta International v. C.C. - 1997 (92) E.L.T. 487 noticed Sneh Sales Corporation. However, it distinguished it on the ground that the seizure of the goods took place (in the matter before it) after they were cleared from the Customs. It took the view, that if the goods have already been cleared the Bench itself might have taken a different view. This aspect had been embodied in paragraph 5.3 of its order. With the greatest possible respect we are unable to understand this reasoning. If it is held (as the already T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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