1987 (6) TMI 65 - HC - Customs

Customs - Definition of importer - Confiscation - Customs House Agent s objection - Import on licence

Issues Involved:
1. Validity of the importer's status.
2. Admissibility of bills of entry.
3. Allegations of fraud and misrepresentation.
4. Confiscation of goods under Section 111(d) of the Customs Act.
5. Legal implications of the cancellation of the import license.

Detailed Analysis:

1. Validity of the Importer's Status:
The primary issue was whether the petitioner could be considered the importer under Section 2(26) of the Customs Act, 1962. The petitioner argued that since the documents (bills of lading, invoices, etc.) were in their name, they should be recognized as the importer. However, the court held that the term "importer" refers to the person who holds the documents at the time of importation and until the goods are cleared for home consumption. Since the goods arrived on 27-09-1986 and the documents in the petitioner's possession were dated after this date, the court concluded that M/s. Continental Silk House was the importer at the time of importation.

2. Admissibility of Bills of Entry:
The petitioner claimed that they had the right to file bills of entry under Section 46 of the Act. The court noted that M/s. Jeena & Co., the clearing agents for M/s. Continental Silk House, had already filed bills of entry for the same consignments. The court found that the Department's refusal to accept the petitioner's bills of entry was justified, as the original bills of entry filed by M/s. Jeena & Co. were still valid and had not been canceled.

3. Allegations of Fraud and Misrepresentation:
The court addressed the allegations that M/s. Continental Silk House was a fictitious firm and had obtained the import license through fraud and misrepresentation. It was revealed that the Joint Chief Controller of Imports and Exports had canceled the license upon discovering the fraud. The court emphasized that the goods were imported based on forged documents, making the importation illegal.

4. Confiscation of Goods under Section 111(d) of the Customs Act:
The court referred to Section 111(d) of the Customs Act, which mandates the confiscation of goods imported in violation of any prohibition imposed by law. Since the import license was obtained fraudulently, the goods were liable for confiscation. The court cited relevant case law, including FEDCO (P) Ltd. v. S.N. Bilgrami and S. Mohammed v. Asstt. Collector, Customs, to support this conclusion.

5. Legal Implications of the Cancellation of the Import License:
The petitioner argued that the cancellation of M/s. Continental Silk House's license should not affect their right to import the goods. However, the court held that the fraudulent nature of the license invalidated any subsequent claims. The court cited East India Commercial v. Collector of Customs to underline that the cancellation of a fraudulently obtained license renders it void, and any import based on such a license is unlawful.

Conclusion:
The court dismissed the writ petitions, concluding that the petitioner could not be recognized as the importer, the bills of entry filed by the petitioner were inadmissible, and the goods were liable for confiscation due to the fraudulent nature of the import license. The court's decision emphasized the importance of adhering to legal definitions and procedures in import transactions and highlighted the severe consequences of fraud and misrepresentation in obtaining import licenses.

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