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TMI Blog2014 (9) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... ansferability made on 19th August, 1999 nor the licence was made transferable. Therefore, in respect of the Bills of Entry filed on 19th August, 1999 the question of extending benefits under the exemption notification does not arise. This judgment in the case of Sampat Raj Dugar [1992 (1) TMI 103 - SUPREME COURT OF INDIA] has been rightly distinguished by the Tribunal in the case before us. The Tribunal, while dealing with the argument that the appellants were entitled for duty exemption as the licence was made transferable, but stood cancelled only on 24th December, 1999 and the imports made prior to this date were eligible for duty exemption, has rightly observed in paragraph 6.21 of the judgment that in this case there was no valid licence in the name of importers. Levy of penalty - Held that:- The justification for imposing penalty is based on the conclusion that there was no valid licence in the name of the importer. He could not have allowed filing of documents before the Customs Authorities. The licence was valid only up to 21st May 1999, yet the Bills of Entry were filed on 19th August, 1999, 15th December, 1999, 20th December, 1999 and 28th December, 1999 claiming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded over to. Mr. Vohra and Mr. Mehta for engaging a Consultant. The Consultant was, thus, engaged for applying to the Licensing Authority and for carrying out the requisite amendments in the Licence. On account of the efforts made by the Consultant, the Licensing Authority substituted the list of bearings which could be imported under the licence. It also provided that an individual CIF value restriction shown against each import item stood deleted. Thereafter, a reference is made to the consignments and which were imported by M/s. Amrit Laxmi Machine Works. 5. Mr. Jain submits that in September, 1999 the original copy of the Licence was misplaced by Mr. Mehta who also lodged the First Information Report to that effect with the Police Station. At that stage, another licence consultant was engaged for obtaining duplicate copy of the Licence, so also, for obtaining permission for transferability thereof. It is in these circumstances that on 13th October, 1999 an application for enhancement of the value of the Licence was made by M/s. Amrit Laxmi Machine Works. A duplicate licence was issued on 22nd November, 1999 by the Director General of Foreign Trade. Along with the licence, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raise any substantial question of law. There are clear findings of fact and which cannot be said to be vitiated. It is submitted that a substantial question of law as projected does not arise at all. The appellants were never taken by surprise nor there is any substance in the plea that the Tribunal has travelled beyond the show cause notice and made out a new case for the Revenue. It is submitted that all allegations which are part of the show cause notice were known to the appellants and they were aware of the case that they have to meet. This is not a matter where the licence was said to be subsisting. In fact the dates and events, as have unfolded, would go to show that a systematic fraud has been perpetrated on the Revenue and which affects a larger public interest. The design was to import the goods into India when the original Licencees were not interested in pursuing their case for renewal or revalidation. Taking advantage of such licence holders and by offering them some benefits, the parties like the appellants in connivance and in collusion have hatched a conspiracy to cheat the Revenue. That has been unearthed by the Authorities. Therefore, this is not a case where any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ieu of the original licence and valid upto 21st May, 1999, was issued on 22nd November, 1999 and revalidated upto 21st November, 1999. Thus, the duty payment challans as directed by the Director General of Foreign Trade were after these dates. These facts have been noted in both orders and hence, the Authorities concurrently found that this was not a case where against a valid and subsisting licence that the imports were effected. This was a case where investigations revealed that the licence issued in the year 1996 was operative for a term, which was already over. In the garb of its loss being reported, an application was made for issuance of a duplicate licence. The parties were fully aware that the term of licence expired in May, 1999, yet the licence was made transferable after issuance of its duplicate. Then, it was transferred to M/s. Ankit International in December, 1999 and to be precise on 14th December, 1999. M/s. Ankit International apart from utilizing part of the licence for imports, also transferred the balance in the name of M/s. Nippon Bearings Pvt. Ltd., M/s. Shalin Enterprises, M/s. Hiral Overseas, M/s. Naman Enterprises and M/s. Devanti Enterprises. It is in thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment. In this case what the Hon ble Supreme Court noted was that the second Respondent Ms. Renu Pahilaj was carrying on business in the name and style of Acquarius at Delhi. The first respondent before the Supreme Court was an Indian national residing abroad and doing business at Hong Kong in the name and style Unisilk . The second Respondent obtained an advance import licence on 20th May 1985 for importing raw silk valid for a period of 18 months from the date of its issue. The import licence was granted subject to the condition that raw silk imported should be utilized for manufacturing garments which ought to be exported by the second Respondent. Some time prior to October, 1985, the second Respondent received three consignments, but she did not fulfil the above condition, During October-November, 1985, the first respondent exported certain quantities of raw silk in four lots, deliverable to the second respondent. The requisite documents were sent to the first respondent s bankers with instruction to deliver the same to the second respondent on receiving the payment. When the said four consignments arrived at Mumbai, the second respondent appeared before the Customs Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the Letters Patent Appeal preferred by the Revenue was dismissed by the Division Bench. 12. It is in these circumstances that the findings relied upon by Mr. Jain must be noted. The Hon ble Supreme Court, therefore, in the backdrop of these peculiar findings and conclusions, held that there may be cases where the importer opens a letter of credit and makes some other arrangement ensuring or guaranteeing payment of price of imported goods. In such case, it will be open to the Exporter in case of non-payment of price or abandonment by the importer, to collect the price by invoking such arrangement. In such case, it is obvious, the Exporter will not be allowed to claim the title to and/or to re-export the goods. It is, therefore, necessary that in all such cases, the Authority should issue a notice to the importer and/or his agent before allowing the Exporter to deal with or seek to re-export the goods. Since they were all present before the Collector of Customs as well as before the High Court that the Hon ble Supreme Court held in paragraph 21 as under :- 27. The next question is whether the import of the said goods was contrary to law in any manner and whether the said g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the said goods remains free of any cloud. 13. Therefore, the observations of the Hon ble Supreme Court must be seen in this backdrop. If it was the case of the Revenue that the first respondent was party to conspiracy or other fraudulent plans sought to be implemented by the second respondent, then, different conclusions would have arisen. In these circumstances that the Hon ble Supreme Court refused to interfere with the concurrent findings of this Court and dismissed the appeal of the Revenue. 14 This judgment has been rightly distinguished by the Tribunal in the case before us. The Tribunal, while dealing with the argument that the appellants were entitled for duty exemption as the licence was made transferable, but stood cancelled only on 24th December, 1999 and the imports made prior to this date were eligible for duty exemption, has rightly observed in paragraph 6.21 of the judgment that in this case there was no valid licence in the name of importers. The observations in the case of Sampat Raj Dugar (supra) have also been properly noted by the Tribunal. However, the Tribunal observed that in all these cases there was valid licence in the name of the importers at t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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