Back
1993 Supreme(Mad) 257
High Court of Judicature at Madras
THE HONOURABLE ACTING CHIEF JUSTICE MR V. RATNAM & THE HONOURABLE MR. JUSTICE SOMASUNDARAM
East West Exporters - Appellant
Versus
Assistant Collector of Customs - Respondents
Writ Appeal Nos. 315, 316, 353 and 354 of 1993
Decided On : 29 April 1993
A forged Value Based Advance Licence, as far as Staple Pins are concerned, cannot convey any right to the petitioners even assuming that they are bona fide purchasers of the licence for value.
Headnote:
CUSTOMS ACT - SECTION 111(O) - IMPORT OF GOODS WITHOUT VALID LICENCE - LIABILITY FOR CONFISCATION - INTERPRETATION OF NOTIFICATION 203/92 - VALIDITY OF VALUE BASED ADVANCE LICENCE - FORGED DOCUMENT - BONA FIDE PURCHASER - CLEARANCE OF GOODS ON PAYMENT OF DUTY - CONDITIONS IMPOSED BY COURT.
Fact of the Case:
The petitioners, engaged in the business of export of readymade garments and import of cognate goods, purchased a Value Based Advance Licence from M/s. Rajendra Enterprises for part of the value of the licence. They imported Staple Pins from Japan under the Open General Licence, claiming exemption from payment of duty based on the Value Based Advance Licence. The respondents, suspecting fraud and misrepresentation, detained the licence and initiated investigations. The petitioners filed writ petitions seeking a writ of mandamus to direct the respondents to return the bills of entry and permit clearance of the goods without payment of duty.
Finding of the Court:
The court found that the Value Based Advance Licence produced by the petitioners was a forged document as far as the Staple Pins were concerned. The original licence did not include Staple Pins, and the entry was unauthorizedly tampered with and falsified in December 1992 to include Staple Pins as an item, ante dating it to 23-10-1992. The court held that the petitioners were not entitled to clear the goods without payment of duty and that the goods were not liable for confiscation under Section 111 of the Customs Act.
Issues: 1. Whether the petitioners were entitled to clear the goods without payment of duty based on the Value Based Advance Licence. 2. Whether the goods were liable for confiscation under Section 111(o) of the Customs Act.
Ratio Decidendi: 1. The court held that the Value Based Advance Licence produced by the petitioners was a forged document as far as the Staple Pins were concerned. The original licence did not include Staple Pins, and the entry was unauthorizedly tampered with and falsified in December 1992 to include Staple Pins as an item, ante dating it to 23-10-1992. The court held that the petitioners were not entitled to clear the goods without payment of duty. 2. The court held that the goods were not liable for confiscation under Section 111(o) of the Customs Act. The court found that the petitioners imported Staple Pins without a valid licence, and that the goods were not exempted from payment of duty subject to certain conditions that were not subsequently satisfied. Therefore, the court held that the provision of Section 111(o) of the Act did not stand attracted to the facts of the present case.
Final Decision: The court dismissed all the writ appeals. The petitioners were directed to clear the goods on payment of 50% of the duty in each case, plus furnishing Bank Guarantee for 25% of the duty and executing a personal bond for the balance 25%. If the validity of the licence, in respect of Staple Pins, was ultimately upheld in the adjudication proceedings, the petitioners could seek a refund of the duty paid by them.
SOMASUNDARAM, J
As the points involved in these writ appeals are common, they are disposed of by this common judgment.
2.These writ appeals arise out of the common order of the learned Single Judge made in W.P. Nos. 1012 and 1013 of 1993, directing that the goods in each of the cases should be allowed to be cleared within 10 days from the date of payment of 50% of the duty in each case plus Bank Guarantee for 25% of the duty and a personal bond for the balance of 25%. For the sake of convenience, the parties are referred to in this judgment as per their array in the writ petitions.
3.The petitioners in W.P. Nos. 1012 and 1013 of 1993 are two firms engaged in the business of export of readymade garments and import of cognate goods and the facts in both the writ petitions are identical. The petitioners have purchased a Value Based Advance Licence from one M/s. Rajendra Enterprises. The purchase was only for part of the value of the licence to an extent of Rs. 11, 75, 000/- in each case. The petitioners have paid a sum of Rs. 7, 40, 000/- as a premium to the said M/s. Rajendra Enterprises for the purchase of the licence. The licence, purchased by the petitioners enabled them to import and clear goods specified in the licence without payment of duty. The respondents are also bound to return the licence to the owners for transacting the balance of the licence. The petitioners have imported Staple Pins from Japan and the goods arrived by ship around December, 1992. Staple Pins can be imported under the Open General Licence. With a view to clear the goods without payment of duty, the petitioners submitted the above Value Based Advance Licence to the first respondent along with the relevant bills of entry and the advance licence had been detained by the second respondent for certain investigations. On 11-1-1993 when the petitioners approached the second respondent, they were served with summons under Section 10(B) of the Customs Act and statements were recorded from the petitioners. Even thereafter, the licence has not been returned and the goods have not been allowed to be cleared. According to the petitioners, they have acquired the licence in a legal manner paying valuable consideration and investigation cannot prevent them from clearing the goods. In the above circumstances, the petitioners filed writ petitions 1012 and 1013 of 1993 praying for the issue of a writ ofmandamusdirecting the respondents to return the respective bills of entry duly assessed and also to permit clearance of the goods, namely the Staple Pins covered by the Value Based Advance Licence without payment of duty.
4.The respondents in the writ petitions filed a counter affidavit contending that a Value Based Advance Licence dated 25-9-1992 was issued by the Joint Chief Controller, Imports and Exports in favour of M/s. Indo International Limited, Madras. The total value of the licence was Rs. 64, 89, 000/-. The licence holder was permitted to import 21 items of goods mentioned in the annexure to the licence. The licence holder had complied with the export obligations and was, therefore, enabled to transfer the licence. Actually the licence was transferred in parts to several persons and ultimately it was transferred to the writ petitioners. A bond or legal undertaking was executed by the licence holder as contemplated in paragraph 118 of the Hand Book of Procedure for 1992-97 and the same was redeemed by the licensing authority on 23-10-1992. Thereafter, there was no chance of any amendments in the licence relating to enhancement in the C.I.F. value or by way of addition to the licenced items. The original licence did not include the item of Staple Pins imported by the petitioners. However, the words "Staple Pins" have been included in the annexure by way of an amendment and suspicion arose in respect of the said amendment and investigations were initiated in this regard. The respondents further contended that, the investigationsprima faciedisclosed a fr
