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TMI Blog1985 (3) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of an endorsement on the reverse of the said licence valid for import of (a) cerbaryl, (b) methyl pabathion, (c) phorate, (d) dephenylumine and (e) pentacrythritol. The said R.E.P. licence was issued to registered exporters under the Import Policy of the Government of India. Some percentage of import replenishment and materials was allowed for import against each product as well as other conditions relating thereto. The conditions under which the said R.E.P. licence is issued, are provided in Appendix 17 (Import Policy for Registered Exporters). The original import licence was issued in favour of Hindusthan Trading Company, Bombay by the respondent no. 2, the Deputy Controller of Imports and Exports, Bombay. The said import licence was transferable as per provision of paragraph 141 of Import Policy Book for the year 1984-85. The petitioners case is that the said R.E.P. licence was purchased by the petitioners for valuable consideration value in accordance with the provision of paragraphs 140-141 of the Import Policy for the year 1984-85 and that the petitioners duly paid the consideration money in respect thereof to the original licenceholder in whose favour the licence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Annexure E to the petition. 3. Mr. Bholanath Sen, learned counsel appearing on behalf of the petitioners, contended that the petitioners had not violated any of the provisions of law. The misrepresentation and/or fraud might have been committed by the original licensee for which the petitioners who were the transferee of such licence, should not be made to suffer. The licensing authority, on the face of the licence, made it clear that the licence was transferable and that when such transfer was made for valuable consideration and when actual importation of the goods have been made on the basis of such licence, it was no longer open to the respondents to refuse clearance of the goods on the allegation that the licence had been suspended by the licensing authority. Mr. Sen further submitted that if any illegal thing was done by the original licensee, namely, the Hindusthan Trading Company, the respondents were at liberty to take any penal action or any other action as contemplated under the Act against the original licensee. But the petitioners could not be penalised inasmuch as the petitioners were the transferees in respect of a licence who obtained the same at a valuable c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the import entitlement of the exporters in question. Mr. Sen submitted that such being the general condition of R.E.P. licence where the licence is suspended or cancelled is of no consequence when on the basis of the licence goods have been imported and the respondents are under a statutory obligation and duty to clear the goods which have been imported by the petitioners on the basis of the said R.E.P. licence. Mr. Sen also submitted that if it was known to the petitioners that the licence was obtained illegally, in that event, the petitioners would not have taken the licence on transfer for valuable consideration and that after the transfer of licence was made, due intimation was given to the licensing authority but the licensing authority was remaining silent over the matter and that it is the established principle of law that silence or inaction under certain conditions may constitute a representation as much as positive language or conduct for the purpose of an estoppel. It was further contended by Mr. Sen that the silence or inaction on the part of the respondents to take steps against the original licensee is concerned for cancellation of the licence, the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remedy provided under the law is that the value of the licence should be adjusted against the import entitlement of the exporter and that the respondents have also the right to proceed against the original exporter under the law for misrepresentation or fraud that might have been committed by the original exporter. It was held by the Supreme Court of India in M/s. East India Commercial Company Limited v. Collector of Customs, Calcutta reported in AIR 1962 S.C. 1893 = 1983 E.L.T. 1342 (S.C.) that nor there is any legal basis for the contention that licence obtained by misrepresentation makes the licence non est, with the result that the goods should be deemed to have been imported without licence in contravention of the order issued under S.3 of the Act so as to bring the case within Cl. (8) of S. 167 of the Sea Customs Act. 7. In the instant case the goods had already been imported and in respect of the first consignment the customs authority had accepted the customs duty and in respect of the second consignment the duty has been assessed, but the customs authority refused to accept the same on the ground that the licence in question has been suspended. The said suspension and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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