TMI Blog2002 (7) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. On the strength of the said exports, the said firms obtained Advance Licences for the purpose of duty-free imports. The said firms transferred those advance licences for consideration to other parties. Those transferee parties made import on the basis of those advance licences and got import duty exemption. 2.2 Thereafter, it was found on investigation by Director General of Foreign Trade authorities that the exports which the aforesaid four firms claimed to have made were fraudulently made in the sense that the exports claimed were not actually made. The Commissioner of Customs (Preventive), Mumbai therefore issued a show cause notice dated 8-5-1997 (Annexure C) to the aforesaid four firms and also to the petitioner who was looking after the affairs of all the aforesaid four firms and also to other directors/partners of the above firms. By the said show cause notice, the parties were called upon to show cause - (a) why goods viz. Polyester Filament Yarn, Disperse dyes, Silicon Compound imported against Advance Licences and Duty Exemption Entitlement Certificates totally valued at Rs. 2,41,15,086/- should not be confiscated under Section 111(o) of the Customs Act, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire basis of imposing levy on the firms as well as the imposition of penalty on the petitioner had fallen to the ground and therefore, the previous order requiring the petitioner to deposit Rs. 50 lacs for the purpose of hearing the petitioner's appeal was required to be revoked or modified. The petitioner also pleaded financial hardship. The Tribunal dismissed the said application by order dated 9-3-2001 [2001 (138) E.L.T. 692 (Tri. - Bom.)]. 2.6 The petitioner thereafter preferred second modification application. The said application also came to be dismissed by the Tribunal by its order dated 23-4-2002. 2.7 The petitioner has thereupon filed the present petition for challenging the aforesaid orders of CEGAT by which the petitioner is required to deposit an amount of Rs. 50 lacs as pre-deposit for hearing of the petitioner's appeal. 3. Mr. Paresh Dave, ld. Advocate for the petitioner has vehemently contended as under :- 3.1 Once the Tribunal found that this was a fit case for granting unconditional stay in favour of the four firms and accordingly, the entire duty amount was waived, the penalty imposed upon the petitioner was also required to be waived as a necessary cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order passed by the Commissioner of Customs (Adjudication) and to the orders passed by the Additional Director General of Foreign Trade. 5. Before dealing with the contentions raised by the petitioner, we may point out the findings given by the Commissioner of Customs (Adjudication) in his order dated 7-6-1999 :- "58. (a) So far as the defence arguments enumerated above are concerned, it is revealed that the learned advocate has very meticulously avoided the main issue while commenting on the several peripheral and ancillary matters. The main issue is that the licence holder had made a claim before the licensing authority through the use of forged documents showing customs endorsements etc. thereon that the corresponding export has actually been effected, whereas the fact is that, no such export had been made by the licence holder. Paragraph 126 of Handbook Procedures Vol. 1 and (not Rule 126 as recurred to by the learned advocate), requires furnishing of a self-declaration statement signed by the licence holder showing the details of imports and exports. In this case the declaration were signed by the authorised person of the licensee firms (i.e. the petitioner herein). W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng them before the Jt. D.G.F.T. to obtain the benefits of the duty free import of imports mentioned against the respective licences. The learned Advocate is not bringing on record a single document which shows the extent of export that has been made against the said Shipping Bills." (Emphasis supplied) 6. The Commissioner of Customs also dealt with the legal contention raised by the four firms that they were original licence holders but they were not importers. That argument has been dealt with in Paras 61, 62 and 65 of the order-in-original in the following terms :- "61. (a) So far as the defence that the Licence Holders, not being the importers, they are not liable to pay any customs duty as demanded in the Show Cause Notice, is concerned, I note that the imports have been made by the transferee and not by the licensee as correctly pointed out by the Advocate. Nevertheless, the violation of terms of condition of the notification has been committed by the licence holder, at the point of exportation. In terms of the provisions contained in the Notification No. 204/92-Cus. vide the contents of format of DEEC Book Part 1 and Part 2, prescribed thereunder, the licence holder (whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rter contained in Section 2(26) of the Customs Act, 1962. 65……..the licence holder also comes within the ambit of the word importer as defined under Section 2(26) of the Customs Act and by being "any person holding himself to be the importer" as provided thereunder. In terms of the format of applications to be made for the Advance Licence and the corresponding DEEC Book, the applicant not only approaches the licensing authority as an "importer" but in terms of the format of the DEEC Books (Parts I II), which are a part of the statutory notification, the status of the licence holder in terms of the said statutory provisions, is legally deemed to be an "importer". A note must be taken of the fact that the DEEC proforma, is a part and parcel of the statutory notification and hence the contents thereof become a part of the statute. Therefore, the licence holder continues to be the "importer" in terms of the notification No. 204/92-Cus. and cannot escape from the liability as an importer in respect of imports made against the advance licence in question. Hence he cannot escape the liability of payment of duty on the corresponding imports made against the licence in question, especia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 and 59 of his order that the learned Advocate appearing for the four firms and the petitioner herein was not in a position to rebut the main allegation that despite no exports having been made fictitious evidence of exports was created on paper. As against such categorical finding, all that the Additional Director General of Foreign Trade has stated in his appellate orders passed in February/April, 2000 is that the Customs Authorities had not proved the case against the four firms beyond reasonable doubt. However, without going into the correctness or otherwise of the finding given by the Additional Director General, it is important to note that all that the Additional Director General has done is to pass the following operative order :- "the Order-in-Original dated 30-12-96 passed by the Dy. DGFT, Ahmedabad maintaining his earlier Order dated 17-11-1995 cancelling ab initio the two Advance Licences [(1) No. 2145367, dated 12-7-94; and (2) No. 2145368 dated 12-7-94] issued in favour of the appellants shall stand revised and withdrawn so that the bona fide imports already effected against these advance licences are not hit by such ab initio cancellation. However, these Advan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs claimed and were granted benefit of exemption in terms of Customs Notification No. 204 of 1992. Investigation made by the Department subsequent to the import revealed the fact that much of what had been claimed to be exported was not at all exported. Pursuant to such investigation, notices were issued to Jupiter Export demanding duty on the goods from the purchaser of the transferred licence as well as from Jupiter Exports and penalties were imposed. The Commissioner of Customs (Adjudication) confirmed the orders passed against Jupiter Exports and discharged the notice issued to the actual importer holding them to be bona fide transferees. Jupiter Exports, therefore, went in appeal before CEGAT. The CEGAT dealt with the argument of the Department that demand of duty from Jupiter Exports was justified since it was Jupiter Export which reaped the benefit of the sale of import licence obtained by fraudulent means and therefore, Jupiter Exports must bear the consequences after the malpractice have been detected. The Tribunal dealt with the said contention in the following words :- "7. Now this is a very fine concept in terms of equity. In those terms it is only fair that it is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, the Honourable Supreme Court has held that the jurisdiction of the High Court under Article 226 or 227 is to be exercised only for advancing justice and not for thwarting it. The Apex Court has laid down in the said decision that even if the order impugned before the Court in a writ petition suffers from any legal infirmity, the Court is not to interfere with such order if it advances justice. In the case of A.M. Alison v. B.L. Sen, AIR 1957 SC 226 also, the Honourable Supreme Court has held that the writ jurisdiction is not to be exercised merely because the order is shown to be illegal, if there is not failure of justice. 16. In view of the finding of fact given by the Commissioner of Customs (Appeals) that Advance licences were fraudulently obtained by the four firms through the petitioner by showing exports which were not actually made, we are of the view that the pre-deposit of Rs. 50 lacs ordered by the Tribunal as against the penalty of Rs. 4 crores imposed by the Commissioner of Customs on the petitioner does not call for any interference at the instance of the petitioner who is found to be instrumental in the forgery/concoction of documents as found by the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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