1993 (4) TMI 80 - HC - Customs

Summary

Issues Involved:
1. Validity of the Value Based Advance Licence for importing Staple Pins.
2. Entitlement to clear goods without payment of duty.
3. Liability of goods for confiscation under Section 111 of the Customs Act.
4. Conditions imposed by the Single Judge for the release of goods.

Summary:

1. Validity of the Value Based Advance Licence for importing Staple Pins:
The petitioners purchased a Value Based Advance Licence from M/s. Rajendra Enterprises, which was originally issued to M/s. Indo International Limited. The licence did not initially include Staple Pins, but an amendment was made to include them. The respondents suspected fraud in this amendment, as it was allegedly ante-dated to avoid the implications of the redemption of the undertaking on 23-10-1992. The court found prima facie evidence of forgery, rendering the licence void ab initio for Staple Pins.

2. Entitlement to clear goods without payment of duty:
The petitioners argued that they should be allowed to clear Staple Pins without payment of duty based on the Value Based Advance Licence. The court held that the petitioners could not clear the goods without payment of duty as there was no valid licence for Staple Pins at the time of import. The goods could be imported lawfully under the Open General Licence (O.G.L.) but subject to payment of duty.

3. Liability of goods for confiscation under Section 111 of the Customs Act:
The respondents contended that the goods were liable for confiscation u/s 111(o) of the Customs Act due to non-observance of conditions for duty exemption. The court found that Section 111(o) did not apply as there was no valid licence for Staple Pins at the time of import. The goods were not exempted from duty subject to conditions but were imported without a valid licence, making them not liable for confiscation.

4. Conditions imposed by the Single Judge for the release of goods:
The Single Judge directed that the goods be cleared within 10 days from the date of payment of 50% of the duty, plus a Bank Guarantee for 25% and a personal bond for the remaining 25%. The petitioners and respondents both appealed against this order. The court upheld the Single Judge's conditions, stating that the petitioners could seek a refund if the licence's validity was ultimately upheld.

Conclusion:
The court dismissed all writ appeals, affirming that the goods could not be cleared without payment of duty due to the invalidity of the Value Based Advance Licence for Staple Pins. The goods were not liable for confiscation, and the conditions imposed by the Single Judge for their release were appropriate.