2008 (1) TMI 54 - AT - Customs

Custom authorities have no power to challenge & sit on the judgment taken by the DGFT to amend the license moreover, licensing authorities (DGFT) even have no power to amend any license retrospectively reference to larger bench is answered accordingly

Summary

Issues:
1. Whether DGFT has powers to amend the license, including revalidation, and if such amendments can be retrospective?
2. Whether customs authorities can challenge the amendments made by DGFT, regardless of their correctness?

Issue 1:
The judgment addressed the first issue regarding the powers of the Directorate General of Foreign Trade (DGFT) to amend licenses, including revalidation, and the retrospective nature of such amendments. The Tribunal analyzed Rule 8 of the Foreign Trade (Regulation) Rules, 1993, which empowers the licensing authority to amend licenses as necessary. The Tribunal concluded that DGFT indeed has the authority to amend licenses, which includes revalidation, based on a plain reading of the rule. The appellants argued for retrospective amendments citing previous Tribunal decisions, but the Tribunal referred to a High Court judgment which held that licensing authorities do not possess the power to amend licenses retrospectively. Therefore, the Tribunal answered the first question in the negative, stating that licensing authorities do not have the power to amend licenses retrospectively.

Issue 2:
The second issue involved whether customs authorities can challenge the amendments made by DGFT, irrespective of their correctness. The Tribunal cited a Supreme Court case and various High Court judgments to establish that customs authorities do not have the power to scrutinize or challenge the licensing authorities' decisions regarding license amendments. The Tribunal emphasized that until licenses are canceled by the licensing authority, they are deemed valid, and customs authorities cannot refuse exemptions based on allegations of misrepresentation. The Tribunal concluded that customs authorities do not have the power to challenge the licensing authorities' amendments to licenses. Therefore, the second question was answered in the negative, stating that customs authorities do not have the power to scrutinize or challenge DGFT's license amendments.

In conclusion, the Tribunal answered both references by stating that licensing authorities do not have the power to amend licenses retrospectively and that customs authorities cannot challenge the licensing authorities' power to amend licenses. The judgment provided a detailed analysis of relevant rules, precedents, and legal principles to support its conclusions, ensuring clarity on the powers and limitations of both DGFT and customs authorities in license-related matters.