TMI Blog1987 (6) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... s Continental Silk House, 47, 3rd Main Road, 4th Block, Rajaji Road, Bangalore, filed three bills of entry all dated 29th of September, 1986 for the clearance of 25 bales of mulberry silk in each case. The goods were imported by vessel 'VELENJI'. The vessel arrived on 27-9-1986. Messrs. Jeena Co., the clearing agents of M/s. Continental Silk House filed these three bills of entry for the clearance of 25 bales of mulberry raw silk of China origin on behalf of M/s. Continental Silk House, Bangalore (the importers). The value of each of the consignments was declared as Rs. 3,43,651/-, Rs. 3,45,910/- and Rs. 3,45,792/- on the strength of the invoices raised by Messrs. Brightex (H.K.) Corporation in their favour. Both the importer and the Customs House Agent subscribed to a declaration as to the truth of the contents in the bills of entry as provided for under Section 41(2) of the Customs Act of 1962 (hereinafter referred to as the 'ACT'). On the strength of the bills of entry, the goods were inspected and the sampling was also done. Meanwhile, information was received by respondents 1 to 5 that the said importer was not in existence, and that the licence had been obtained by fraud an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Department have stated that no import licence was sent to them for the clearance of the goods in question nor did they receive any money for payment of duty, having no suspicion regarding the bona fides of the Importers as stated in the shipment documents, in good faith, the bills of entry were filed by them to avoid the delay. Only from the details contained in the show cause notice, they came to know about the various offences involved. Any section that may be required may be taken against the goods and the Importers. 5. It is at this stage, all these three writ petitions have been filed for identical relief of mandamus directing the second respondent to receive the bills of entry covering the import of 25 bales, of Mulberry Raw Silk imported on board the ship 's.s. Velanje' and to release the goods after collecting the duty payable thereon. 6. Mr. Habibullah Badsha, learned counsel for the petitioner, would urge as follows : (i) The definition of an Importer is found under Section 2(26) of the Act having regard to the same, if the petitioner, before the goods are cleared for home consumption, would hold itself out to be the importer, it has every right to clear the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -1986 the bills of lading are only after the date of importation. At the time of importation, therefore, it was Continental Silk House who could, in law, be the importer. Therefore, the reliance placed on this definition is inappropriate, and the citation in this behalf is inapplicable. 8. The learned counsel then refers to sub-sections (1) and (3) of Section 30 of the Act and then urges that in this case as early as on 12-6-1986, the C.B.I. enquiry had been commenced. It is at this juncture that in January 1987 the petitioner claimed the release of the goods. So far as the goods are concerned, they are liable for confiscation, concerning which adjudication proceedings are pending. A show cause notice has been issued on 27-3-1987. The Department has also sent a reply to the Advocate of the petitioner on 31-3-1987. In order to circumvent the adjudication proceedings, the petitioners have ingeniously filed these bills of entry and have come upto this Court as though nothing had happened. It is incorrect to contend that no prejudice will be caused to the Department, nor again it is proper to urge that there is any arbitrariness. 9. Mr. B. Sriramulu learned counsel appearing for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... White Steam Filature (in all) M/s. Continental Silk House, 47, 32nd Main Road, Rajaji Nagar, Bangalore - (in all) It will be seen that the Importer is M/s. Continental Silk House, the holders of the bills of lading. The Customs House Agents M/s. Jeena Co., Madras fried the bills of entry with invoices dated 4-9-1986 of M/s. Brightex, Hong Kong, on 20-9-1986. The goods arrived on 27-9-1986. The bills of entry were admitted by the Department. They were assigned Nos. 5059 to 5061. They were manifested as GM-837/86 Line Nos. 150 to 152 on 29-9-1986. It came to the light of the Customs Department that M/s. Continental Silk House was not in existence and the licence itself had been obtained by fraud and misrepresentation on the strength of fabricated documents. Therefore, a complaint was lodged on 27-11-1986 by the Deputy Chief Controller of Imports and Exports with the Superintendent of Police, C.B.I. (EOW), Madras to take up investigation against the bogus firm. Accordingly, a First Information Report was prepared in Crime No. R.C. 19 of 86, dated 2-12-1986 and investigation was taken up. On 13-3-1987, the Joint Chief Controller of Imports and Expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Since, adjudication proceedings are underway, your request for noting the bills of entry in favour of your client M/s. J.B. Trading Corporation, Bombay cannot be acceded to.' 12. Mr. Habibullah Badsha, learned counsel for the petitioner strongly relies on the word 'Importer' found in Section 2(26) of the Act. The word 'Importer' is defined as follows : "Importer' in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer. In interpreting that, it is observed as follows in J.V. Gokal Co. v. Assistant Collector of Sales Tax (AIR 1960 S.C. p. 595). 'The legal position vis-a-vis the import-sale can be summarised thus : (1) The course of import of goods starts at a point when the goods cross the customs barrier of the foreign country and ends at a point in the importing country after the goods cross the customs barrier; (2) the sale which occasions the import is a sale in the course of import; (3) a purchase by an importer of goods when they are on the high seas by payment against shipping documents is also a purchase in the course of impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co., with regard to the same consignment and therefore it cannot accept any other person as the Importer for the same goods is perfectly in consonance with the Customs Law as well as the common sense. Further, the petitioner had been informed that the bills of entry against Line Nos. 150, 151 and 152 had already been filed on 29th September, 1986 by the said M/s. Jeena Co., on behalf of M/s. Continental Silk House, Bangalore. 15. The fallacy underlying the argument of the petitioner is, it is presumed on behalf of the petitioner that the goods had already been allowed for clearance and the Importer of M/s. Continental Silk House had not cleared the goods. This is far from fact. On the contrary, the matter is now in the hands of C.B.I. and a first information report has been registered in R.C. No. 19 of 1986. The licence of M/s. Continental Silk House had been cancelled by proceedings dated 13-3-1987, the import of the goods on the strength of the fake documents by fictitious firm on whom even notices could not be served would undoubtedly constitute fraud. In such a case, Section 111(d) of the Act will clearly get attracted. Consequently, the goods are liable for confiscation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is prohibited by law, cannot be a valid import under the Act. Goods so imported cannot therefore be treated to be lawfully 'imported goods' within the definition of that term in Section 2 (25) of the Act. Since the respondents' case is that the licences on the basis of which the goods were imported were forged licences, if the allegation of forgery is true, the goods must be held to have been brought into India contrary to a prohibition imposed by law as contemplated by Section 111(d) of the Act, and in that case such goods are liable to confiscation and the power to seize under Section 110(1) of the Act can be invoked by the Customs Authorities and the goods, though cleared after payment of duty can be seized under Section 110(1) of the Act. The contention on behalf of the petitioner that the goods having been imported into India for home consumption cease to be imported goods and the decision of the Customs authorities to release the goods upon payment of the duty imposed cannot be revised by any authority other than the Board in exercise of the power under Section 130(1) of the Act therefore fails and is rejected." Paragraph 36 : "The next contention of the learned counse ..... 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