1992 (5) TMI 125 - AT - Customs

Summary

Issues Involved:
1. Jurisdiction of the Collector of Customs, Bombay.
2. Validity of the import licenses at the time of import.
3. Inclusion of the value of returnable bobbins in the assessable value of the imported goods.
4. Allegations of fraud and misrepresentation in obtaining the import licenses.

Detailed Analysis:

Issue 1: Jurisdiction of the Collector of Customs, Bombay
The appellants contended that the Collector of Customs, Bombay, lacked jurisdiction to seize the goods and pass the adjudicating order because the goods were cleared for home consumption in Delhi. They argued that the cause of action arose in Delhi, and thus, only the Delhi Collectorate had jurisdiction. The Tribunal referred to previous decisions, including Singh Radio and Electronics v. Collector of Customs and Ramnarain Vishwanath v. Collector of Customs, which supported the view that the jurisdiction lies with the Collectorate where the goods were initially cleared. The Tribunal concluded that the Bombay Collectorate had no jurisdiction to pass the adjudicating order and should have informed the Delhi Collectorate to take appropriate action.

Issue 2: Validity of the Import Licenses at the Time of Import
The appellants argued that the goods were imported and cleared for home consumption before the licenses were canceled. The licenses were canceled on 18-12-1986, while the imports occurred on 31-10-1986 and 23-10-1986. The Tribunal noted that a license obtained by fraud is voidable and remains valid until voided in the manner prescribed by law. Since the cancellation of the licenses was subsequent to the imports, the cancellation did not affect the imports, and the imports could not be declared unauthorized.

Issue 3: Inclusion of the Value of Returnable Bobbins in the Assessable Value
The appellants contended that the value of returnable bobbins should not be included in the assessable value of the imported goods. The Tribunal found that the Collector had not provided any reasons for including the value of returnable bobbins, except for extracting the Show Cause Notice. The Tribunal concluded that the finding of mis-declaration of value was based on no evidence.

Issue 4: Allegations of Fraud and Misrepresentation in Obtaining the Import Licenses
The Show Cause Notices alleged that the licenses were obtained based on fabricated documents showing exports far in excess of the actual exports. The Tribunal referenced Supreme Court decisions, including East India Commercial Co. Ltd. v. Collector of Customs and Fedco Private Limited v. S.N. Bilgrami, which held that a license obtained by fraud is voidable and remains valid until voided. The Tribunal concluded that the cancellation of the licenses did not operate retrospectively and, therefore, did not affect the imports made before the cancellation.

Separate Judgment:
One member of the Tribunal, P.C. Jain, disagreed with the finding on the question of jurisdiction. He argued that the facts of this case were distinguishable from the cases relied upon by the appellants. He believed that the taint of illegal importation attached to the goods when they were in Bombay, and thus, the Bombay Customs authorities did not exceed their jurisdiction. However, he agreed with the finding that the cancellation of licenses takes effect from the date of cancellation and not retrospectively. He also agreed with the finding on the question of valuation.

Conclusion:
The Tribunal set aside the order of the Collector of Customs, Bombay, and allowed the appeals, concluding that the imports were not unauthorized and the inclusion of the value of returnable bobbins in the assessable value was unjustified.