2004 (3) TMI 80 - HC - Customs

Suspension of the transferred Advance Licence - EXIM Policy - Seizure of consignment by Customs Authorities based on alleged fraudulent transfer of Advance Licence - HELD THAT - We are in agreement with the submissions made by the petitioner that the issue in this petition is squarely covered by the judgment of this Court in the case of Taparia Overseas v. Union of India 2003 (1) TMI 127 - BOMBAY HIGH COURT and the petitioner is liable to succeed on merits. In conclusion the Court allowed the petition based on the precedent set by a previous case directing the Customs Authorities to refund the duty paid under protest and prohibiting them from taking further action against the petitioner. The Court made the rule absolute with no order as to costs.

Summary

Issues involved: Seizure of consignment by Customs Authorities based on alleged fraudulent transfer of Advance Licence.

Summary:
The petitioner, a sole proprietor dealing in import and export, challenged the seizure of a consignment by respondent Customs Authorities due to the suspension of the transferred Advance Licence, which was alleged to have been obtained fraudulently. The petitioner had purchased the licence in accordance with the Import Export Policy and transferred it to himself. The consignment was imported before the licence suspension, and the petitioner was unaware of any fraud by the original licensor. The petitioner contended that the goods' import was legal and relied on a Supreme Court judgment stating that a licence obtained by fraud is voidable until avoided as per law.

The petitioner argued that Customs Authorities cannot go beyond the scope of the Customs Act and the Import Export Policy to refuse duty-free clearance of goods covered under a valid import licence. The petitioner's contentions aligned with a previous case ruling that fraud does not vitiate transactions involving the transfer of a licence for value without notice of fraud. The Court agreed with the petitioner, citing the previous case, and held that the petitioner should succeed on merits.

During the proceedings, the petitioner was allowed to clear the goods on payment of duty under protest. The Court ordered the refund of the duty paid under protest to the petitioner since the impugned action of the Customs Authorities was set aside. The Court ruled in favor of the petitioner, setting aside the action of the Customs Authorities, declaring the imports legal, and directing the refund of the duty paid under protest with interest.

In conclusion, the Court allowed the petition based on the precedent set by a previous case, directing the Customs Authorities to refund the duty paid under protest and prohibiting them from taking further action against the petitioner. The Court made the rule absolute with no order as to costs.