1993 (1) TMI 148 - AT - Customs

Summary

Issues:
1. Confiscation of imported goods under the Customs Act, 1962 based on fraudulently obtained license.
2. Validity of import license obtained through fraud.
3. Rights of appellants to clear goods against fraudulently obtained license.
4. Interpretation of legal precedents regarding fraudulently obtained licenses and import regulations.

Issue 1: Confiscation of imported goods under the Customs Act, 1962 based on fraudulently obtained license:
The appeal was filed against the order of confiscation of a consignment of ball bearings under Section 111(d) read with Section 111(j) of the Customs Act, 1962. The goods were seized due to inquiries revealing that the import license was fraudulently obtained, and the goods were restricted under the Import Policy 1985-88. The Collector ordered confiscation but allowed the refund of customs duty paid by the appellants.

Issue 2: Validity of import license obtained through fraud:
The appellants argued that the license, even if obtained fraudulently, remains valid until suspended, citing legal precedents. However, the department contended that the license was void ab initio due to fraud, making it invalid for import purposes.

Issue 3: Rights of appellants to clear goods against fraudulently obtained license:
The appellants sought clearance of goods based on the import license obtained with a letter of authority. However, the Tribunal found that the license was fraudulently obtained, making it void since inception, and the goods were considered offending goods liable to confiscation.

Issue 4: Interpretation of legal precedents regarding fraudulently obtained licenses and import regulations:
The Tribunal referred to various legal precedents, including Supreme Court and High Court decisions, to determine the validity of licenses obtained through fraud. The Tribunal held that licenses obtained fraudulently cannot confer rights for clearance of goods, and the confiscation of goods in such cases is justified under the Customs Act.

In conclusion, the Tribunal rejected the appeal, upholding the confiscation of goods imported against a fraudulently obtained license. The decision was based on legal precedents establishing that licenses obtained through fraud are void from inception and do not confer rights for import clearance. The department's contention that the goods were offending goods liable to confiscation was upheld, emphasizing compliance with import regulations and the Customs Act.