TMI Blog2000 (4) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... ne M/s. Sehgal Exports (I), Ludhiana which was transferred to them. The bill of entry was assessed on 23-6-1987 by the proper officer of the Customs accepting the licence as valid to cover the import and extending the benefit of the exemption contained in Notification No. 126/85. The licence was issued in terms of app. 21 during licensing period 1985-88 and the endorsement is contained by the licence issuing authority regarding the duty free imports against replenishment licence and the quantity and the value of the material allowed to be imported and the description of the export product against which import of the materials would be allowed under the said licence. The licence is also subjected to audit by the customs house and accepted as genuine and correctly issued. Such audit is conducted with reference to the weekly bulletin issued by the office of Joint Chief Controller of Imports and Exports. The appellant had paid less on the yarn @ 0.05% amounting to 148 by cash bill No. 1162 dated 3-7-1987 and thereafter the goods were exempted and 80% of the consignment was released on 6-7-1987 to the appellant on the basis of an order of clearance made under Section 47 of the Customs A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Collector of Customs, Bombay, after considering the material available in record, has passed the order-in-original on 15-2-1989 and ordered absolute confiscation of 20% of the goods under seizure by rummaging and Intelligence Department of Preventive Collectorate and imposed the personal penalty of Rs. 1,15,000/- on the appellant, and ordered the recovery of 9,26,506/-from the appellant, as duty as per the show cause notice on 4,752 kgs. poly filament yarn cleared by them, and also imposed penalty of Rs. 50,000/- on Krishnan L. Sehgal, and Rs. 15,000 each on Shivpal Sajan, Surjeet and Naveen Jain. The appellant challenged the said order-in-appeal before the Collector of Customs (Appeals) Bombay, and it was rejected under order issued on 24-1-1990 which is the impugned order in the case. Hence the appeal. 3.The appellant has pointed out in the synopsis that it is the transferee of the import licence dated 24-7-1987. It imported and sought clearance of 5976 kgs. of polyfilament yarn of CIF value 2,93,206 by filing a bill of entry 9385 dated 22-6-1987 and claimed duty free exemption Notification No. 126/85 against the aforesaid licence. It was assessed on 23-6-1987 and 80% of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is to be considered by the licensing authority and not by the customs authorities. He has cited 1990 (45) E.L.T. 9 in the case of J.V. Trading Corporation v. UOI, Madras High Court and drawn the attention to the paragraphs 3, 5 6. He has also relied on 1993 (63) E.L.T. 128 in support of the contention that the licence obtained by fraud is void ab initio. Section 28 of the Customs Act is irrelevant as under Section 125(2) of the said Act to clear the goods, duty has to be paid. In the reply arguments, it is contended that no opportunity was given before the cancelling of the licence by the concerned authorities. 1993 (66) E.L.T. 142 is cited and also the decision in said case is pointed out in page 67 of the paper book i.e. the impugned order. 6.The point for consideration is whether there are sufficient and satisfactory grounds to set aside the impugned order. We answer in the affirmative. 7.Perused the copies of the bill of entry, invoices and bill of lading and the copies of licence together with the transfer letter and a copy of the panchnama and copy of the show cause notices dated 13-3-1988, 14-3-1988, 20-5-1988 and the orders of the lower authorities dated 15-2-199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraph 141 vide paragraph 3 to 6. 1997 (91) E.L.T 635 in the case of KK Manufacturing Company v. CC under Section 111(d) of the Customs Act, it is held in paragraph 6 that cancellation of the import licence obtained by fraud subsequent to import not to result in authorised import when subject licence valid and in force at the time of import and the confiscation is not maintainable and penalty not imposable (vide paragraph 6 and 7). 1993 (66) E.L.T. 142 the Supreme Court has only dealt with the disposal of the goods by permitting the sale of the same on condition that the sale would not be for a sum less than the price to be determined by the appellant Collector of Customs on the request of the Sneh Sales Corporation to releasing the goods during the pendency of the appeal and the importers were willing to pay a duty on the valuation of the goods as may be determined by the Customs Authorities if they were permitted to sell them in the market. Keeping in view the interest of the revenue in spite of the fraud committed by parties, the condition and sale of goods were permitted by the Supreme Court. This does not help any way in this case. In the light of the general principles lai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eded by suspension, which throws some light on the issue involved in the case, which is dealt with and discussed below. 111990 (46). E.L.T. 527 in the case of Uttamlal Exports Pvt. Ltd. v. UOI in paragraphs 3 to 6 it is held that - "REP Import licence alleged to have been obtained on wrong declaration proceedings initiated by JCCIE transfer of such licence not fraudulent - when bill of entry was filed prior to the date of suspension of such licence - goods imported during validity of import licence to be taken as legal imports - Import/Export Policy 1982-83 - paragraph 141. It also deal with how REP licenses are to be transferred. According to it, it would not require any endorsement or permission from the licensing authority and clearance of goods covered thereby would be allowed by the customs authorities on production by the transferee of only the document of transfer of licence concerned in his name. UOI contends that transfer was effected fraudulently pending proceedings initiated by the JCCIE Bombay. This is sought to be supported on the basis that the petition does not disclose when the transfer of the said licence was effected or the date of indent on the foreign supplier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department came to know about the suspension and cancellation of REP licence No. P/K/2243737 only on the date of reply dated 26-2-1988 from Dy. CCIE, Amritsar. What was the reason to address the letter dated 12-2-1988 and, on which date the reply was received by Customs Department is not made clear. Probably, the letter dated 12-2-1988 of the customs department may contain the details which is not available from the record. The orders of lower authorities do not contain any such material. The appellant is resident of Bombay and trading house. There is no material on record to show that he was also served with suspension order and cancellation order of the REP licence of which he is a transferee. The show cause notice and orders of lower authorities do not disclose that the appellant was aware of the above orders, when he sought clearance and sale of imported material to conclude that he acted in such a fast way with a mala fide intention to evade customs duty and to import unauthorisedly. As already discussed above, there is no specific and clear allegation and finding that he abetted, connived and took active part and his actual role in getting the REP licence, and its transfer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 14-3-1988 issued by Asst. Collector of Customs, SIIB, Bombay in paragraph 8(b) and 9 demands duty of Rs. 9,26,506/- on 4752 kgs. of polyester filament yarn already cleared out free of customs duty against the import licence obtained by fraud and misrepresentation and cancelled ab initio out of Rs. 11,65,151.25 leviable as customs duty on 5976 kgs. at the rate of 200% + 25% CVD of Rs. 83.75 per kg. from appellant firm, M/s. Sasme Cooperative Society Ltd., Surat M/s. Silk Mills Navasari M/s. N.M. Enterprises Navasari Amber Traders Navasari. There is no specific demand under Section 28(1) proviso of Customs Act, with the wordings therein are "by reason of collection or any wilful mis-statement or suppression of facts" by the importer. The observation in the impugned order is not correct in view of the clear and specific wordings in proviso to Section 28(1) of Customs Act attracting period of 5 years. No case of suppression is made out in the impugned order, from the show cause notice as narrated above. Impugned older concedes the contention of appellant that notice should have been issued under Section 28(1) proviso of Customs Act. In spite of this observation, the same is brushed a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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