9911796707
TMI Blog2014 (11) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... icence dated 22-11-1996 permitted import of 248 nos. of bearings of specified serial nos. Vide amendment sheet dated 11-5-1999, the number of bearings eligible for import was retained at 248 only but the serial nos. of the bearings were modified. In other words, as per the original licence read with the import list, only 248 nos. of bearings were physically incorporated in the export product and only these were eligible for duty free import under the said licence. From the records, it is seen that this quantity of bearings had already been imported by May, 1999. Therefore, as per the policy, no further bearings could have been allowed to be imported against the said licence. Therefore, endorsement made on 8-12-1999 by the licensing authority in the duplicate licence issued on 22-11-1999 allowing import of 4248 nos. of bearings was not permissible under the EXIM policy as it stood at the relevant time. The advance licence, which was subject to actual user condition and which had expired on 21-5-1999 and which was non-transferable was sought to be revalidated and made transferable, and items which were not permissible to be imported were sought to be included by both changing the des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suppression and wilful misstatement of facts and duty was sought to be evaded due to these reasons. Therefore, the penalty equivalent to duty under Section 114A is mandatory. Inasmuch as we have upheld the demand for duty, the penalty of equivalent amount under Section 114A is also confirmed and upheld. - licence was with an actual user condition and was non-transferable. The goods imported were seized after having been diverted. The notification stipulates use of goods in the product exported. Thus if the goods are imported in violation of the conditions of exemption and the licence issued for the purpose, they are liable to confiscation under Section 111(o) of the Customs Act and consequently penalty is also imposable - Following decision of Commissioner of Customs v. CESTAT, Chennai [2009 (4) TMI 83 - MADRAS HIGH COURT] - Decided against assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... 19-8-1999 347 2. Naman Enterprises, Navi Mumbai 8670, dated 19-8-1999 60 3. Shalin Enterprises, Thane 6586, dated 15-12-1999 78 4. Nippon Bearings Pvt. Ltd., Thane 6592 & 6577, dated 15-12-1999 240 5. Devanti Overseas 6579 and 6598 dated 15-12-1999 234 6. Ankit International, Thane 8719, 8711 & 8629, dated 19-8-1999 178 2.1 Investigation further revealed that after clearance from Mumbai, the goods had been transported to Delhi and the goods were lying in the godown of M/s. Delite Cargo Carriers, Delhi. The goods were examined by DRI, Delhi and 1018 pcs of bearings collectively valued at ₹ 1.38 Crore (Market value) found lying there was seized on 28-12-1999 under the provisions of Section 110 of the Customs Act, 1962. Another 24 pieces arrived in the godown of the said Delite Cargo Carriers and these, valued at ₹ 3.25 lakhs (Market value) were also seized under the said Section 110. Statements of the importers and other connected persons were recorded and the investigation was completed. 2.2 The investigation conducted revealed the following :- (1) Import licence No. 03014593, dated 22-11-1996 was issued for a value of ₹ 50,05,468/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty period of the licence had expired and re-validation was based on the ground that there was a delay in return of the audited DEEC book whereas the fact was that the audited DEEC book had already been returned in 1997 itself. Thus the re-validation was sought by mis-representation of facts. (6) The original licence dated 22-11-1996 covered import of 248 pieces of bearings and the amendment sheet No. 5, dated 11-5-1999 was obtained based on mis-representation with regard to the Sr. No. of the bearings. The original Sr. Nos. of the bearings used in the export product were 207, 208, 210, 212, 217, 22312, 22315, 22317 and 22318 with prefix/suffix 256 pieces bearing of Nos. 23052, 23044, 23064 and 23060 were cleared in May, 1999. The 1137 pieces of bearings imported vide 15 bills of entry mentioned in the Table in para 2 above and seized by the DRI were not covered by the amended licence either in terms of quantity or in terms of the Sr. Nos. for the bearings. (7) As per the provisions of Import Policy 1992-1997 read with Notification No. 149/95, dated 19-9-1995, only such goods as have been used in the export product can be permitted to be imported and cleared duty free. The 1137 pi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g listed in the licence had no market value and hence it will have to be amended. Thereafter, a memorandum of understanding dated 12-2-1999 was signed by Shri Mehta, Jitendra Vakharia and S.P. Shah in the presence of Shri N.K. Brahmachari. Shri Mehta paid a sum of ₹ 50,000/- by way of cheque of Nippon Bearings as advance which was later encashed on 8-4-1999 by the original licence holder. The non-transferable licence was transferred by the licence holder to M/s. Nippon Bearings India which is a partnership firm of M/s. Shalin Vohra, Ms. Namrata Shalin Vohra and Sri Ashwin Mehta. (c) The other related firms operating from the same premises of Nippon Bearings India are - (1) Nippon Bearings Pvt. Ltd. with Shri Shalin Vora, Sri Ashwin Mehta as Directors and Sri Manharlal Hakimchand Vora as Managing Director; (2) M/s. Shalin Enterprises (Bombay) with the said three persons as partners; (3) M/s. Shalin Bearings Corporation with S/Shri Shalin M. Vora, Manharlal Hakimchand Vora, Smt. Mridula M. Vora and Ms. Swati M. Vora as partners; (4) M.M. Corporation with Smt. Mridula M. Vora as proprietrix; and (5) S.N.M. Enterprises with Ms. Namrata S. Vora as proprietrix. In other words, all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Nippon Bearings and in view of non-transferability of the hcence, high seas sale agreements were entered into. The customs clearance and delivery of the goods were taken by Shri Ashwin Mehta and Sri Manharlal Vora from the CHA. (h) In order to account for the bearings on the high seas sales in the books of accounts, two debit notes dated 29-4-1999 were issued by Shri Ashwin Mehta in the name of Nippon Bearings Pvt. Ltd. and Shalin Bearings Corporation and in pursuance thereto M/s. Amrit Laxmi Machine Works issued 3 cheques in favour of M/s. Nippon Bearings and M/s. Shalin Corporation. Since the imports were actually made by the above two firms, the amount was paid back to M/s. Amrit Laxmi Machine Works by M/s. Ankit International. (i) As per the MOU dated 12-2-1999, the licence holder was to receive approx. 32% of the value plus Sales Tax from the users of the licence and the licence holder received ₹ 50,000/- as advance in April, 1999. Further payments were made by adjustments in the books of accounts. (j) In May, 1999, to make the licence transferable and to cause imports, Mr. Mehta used to drafts of letters addressed by the licence holder to the office of D.G.F.T., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate licence as also the description of the bearings eligible for importation made at the time of issue of duplicate licence was cancelled. The period of validity of the licence was only upto 21-5-1999. (o) Subsequent to the issue of duplicate licence on 22-11-1999, the licence was made transferable on 9-12-1999 in terms of para 7.27 of Handbook of Procedures 1997-92. After receipt of the licence by M/s. Amrit Laxmi Machine Works, it was transferred to M/s. Ankit International vide letter dated 14-12-1999. (p) M/s. Ankit International apart from utilising part of the licence for imports, also transferred the balance in the name of M/s. Nippon Bearings Pvt. Ltd., Shalin Enterprises, Hiral Overseas, Naman Enterprises and Devanti Enterprises. (q) Shri Y.R. Ullal, Chartered Engineer had given the certificate in 1996 as requested by M/s. Amrit Laxmi Machine Works giving the details of the bearings required for use in the export goods - that is, 248 nos. of bearings of specific serial nos. On the request of Mr. Ashwin Mehta and Mr. Ashok Jhaveri, Shri Ullal, in December, 1999, furnished another Certificate, backdating them as 28th February, 1997 and 1st March, 1997, for a quantity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 0111434, dated 22-11-1999. Importer's name B/E No. & date Quantity of bearings (nos.) CIF value in Rs. M.M. Corporation 8485, dated 20-12-1999 39 118205 -do- 8478, dated 20-12-1999 70 388432 Nippon Bearings (India) 8438, dated 20-12-1999 48 272536 Nippon Bearings Pvt. Ltd. 8443, dated 20-12-1999 100 439518 -do- 6603, dated 15-12-1999 47 261555 S.N.M. Enterprises 8497, dated 20-12-1999 50 264389 Devanti Overseas 8448, dated 20-12-1999 20 182502 8487, dated 20-12-1999 60 243322 10781, dated 28-12-1999 152 616417 10770, dated 28-12-1999 73 175089 8449, dated 20-12-1999 164 854008 Goyal Engineering & Traders 8730, dated 20-12-1999 20 424482 Hiral Overseas 8429, dated 20-12-1999 26 68614 8470, dated 20-12-1999 29 161254 8444, dated 20-12-1999 33 194177 8521, dated 20-12-1999 78 331887 8776, dated 20-12-1999 90 395567 8722, dated 20-12-1999 52 346444 8659, dated 20-12-1999 12 109495 8525, dated 20-12-1999 62 221234 10788, dated 28-12-1999 156 632638 10783, dated 28-12-1999 192 843875 10772, dated 28-12-1999 96 314135 10765, dated 28-12-1999 54 215857 Crystal Overseas 8768, dated 20-12-1999 36 2036 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 29-6-2004. Vide the said order, the adjudicating authority confiscated 2033 nos. of bearings imported under 29 bills of entry under Sections 111(d) and 111(m) of the Customs Act, 1962, read with Foreign Trade (Development & Regulation) Act, 1992. However he gave the option to the importers to redeem the same on payment of fine totaling ₹ 9.98 lakhs under Section 125 of the said Customs Act. In respect of goods imported under B/Es 8429 dated 20-12-1999, 10783 and 10770 both dated 28-2-1999, he rejected the CIF value declared and enhanced the same to US $ 2670.20, US $ 32832 and US $ 4299.90 respectively under the provisions of Section 14 of the said Customs Act read with the Customs Valuation Rules on the basis of the price list for the said bearings prevailing at the time of importation. He further denied the benefit of Notification No. 31/97 on all the 2033 nos. of bearings and ordered that the goods be assessed to duty on merits. He imposed varying penalties under Sections 112(a) and 112(b) on the noticees except four of them on whom he imposed varying penalties under Section 112(a) alone. He dropped the penal action against Shri J.K. Vakharia. 2.9 It is against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As regards revenue's contention that the validity period of the licence expired on 21-11-1999 and consequently imports made thereunder based on endorsement of transferability should not be extended the benefit of the said licence, the ld. Counsel submits in Circular No. 31/1997-98, dated 31-7-1997 it has been clarified that in a case where licence has been endorsed with transferability, the validity gets extended for a period of 6 months from the date of endorsement. Even otherwise Para 4.15 of HOP 1997-02, clarifies that where the date of expiry of a licence falls on a day before the last of the month, the licence shall be deemed to be valid for the whole of the month. (5) Ld. Counsel argues that validity of the import licence should be decided with reference to the date of shipment/dispatch of the goods from the supplying country and not the date of arrival of the goods at an Indian port. Para 15.5 of the policy provides that in case the goods are exported by sea, it is the date of Bill of lading which is to be taken as relevant date. In all the imports made in the instant case, the Bill of Lading is much prior to November 30, 1999 and consequently all imports were within the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hta and Mr. Vora. The appellant had no knowledge of such a certificate dated 5-4-1999. The appellant and Mr. Brahmachari trusted Mr. Mehta and Mr. Vora and in good faith acted as per their instructions only because of the MOU. It is also submitted that the appellant and Mr. Brahmachari requested for cross-examination of the persons involved in the scheme of enhancing the value of the licence but the same was denied by the adjudicating authority. In view of the above the ld. Counsel submits that the appeals of M/s. Amrit Laxmi Machine Works and Mr. Brahmachari be allowed by setting aside the penalties imposed on them. 3.2 The ld. Advocate for the CHA firm M/s. East West Freight Carriers Pvt. Ltd. and its director Shri S.A.K. Colombowala makes the following submissions. The CHA or is director were not concerned with obtaining of original or duplicate advance licence. They had acted in the capacity of Customs House Agent for clearance of the goods after obtaining valid IEC code and authorizations from the importers and all the declarations relating to imports were made by the concerned importer (which was attached to the bills of entry) for whom they had undertaken the clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a bona fide transferee and there is no admission or confession of knowledge. Natural justice was denied to the appellant as they were not heard before passing of the order and no intimation for personal hearing was received by them by the authority who adjudicated the matter finally. As innocent transferee, the appellant's case is covered by the decisions in Goodluck Industries [1999 (108) E.L.T. 818], Hico Enterprises [2005 (189) E.L.T. 135], Ajay Kumar and Co. [2009 (238) E.L.T. 387], Sanjay Sanwarmal Agarwal [2004 (169) E.L.T. 261]. Accordingly it is prayed that the appeal be allowed with consequential reliefs. 4. The ld. AR appearing for Revenue made the following submissions :- 4.1 This is a case of 'fraud'. Original licence was issued for 248 nos. of bearings of specified description for a total value of ₹ 50,05,468/-. Amend sheet No. 5, dated 11-5-1999 was obtained by Sri Ashwin Mehta by producing a fraudulent certificate dated 5-5-1999 issued by the Chartered Engineer Mr. J.A. Bharwada and the said certificate was obtained by Shri Shailesh Doshi. Bearings either having series nos. shown in the original list or the ones having the sr. shown in the amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orters are not bona fide purchaser of the said duplicate licence. In fact, they master minded everything and the duplicate licence was obtained fraudulently by producing false CE certificates to D.G.F.T. and by creating "front companies" for the purpose. Thus the said licence is not voidable but void abinitio. 4.7 The ld. AR relies, inter alia, on the following judgments in support of his above contention - (1) Denocil Crop Protection Ltd. v. CC (Exp) cited supra; (2) Apar Ltd. v. CC (Exp) vide Final order No. A/229-232/11/CSTB/C-1, dated 12-5-2011 [2012 (276) E.L.T. 534 (Tribunal)]; (3) Friends Trading Co. v. UOI [2010 (254) E.L.T. 652 (P&H)] upheld by Hon'ble Apex Court [2010 (258) E.L.T. A72 (S.C.)]; (4) Golden Tools International v. Jt. D.G.F.T. [2006 (199) E.L.T. 213 (P & H)]; (5) ICI India v. CC (Port), Calcutta [2005 (184) E.L.T. 339 (Cal.)] upheld by Hon'ble Apex Court in 2005 (187) E.L.T. A31 (S.C.); (6) Munjal Showa Ltd. v. CCE, Faridabad [2009 (246) E.L.T. 18 (P&H)]. 4.8 Ld. AR refers to the admissions made by Shri Ashwin Mehta in statement recorded under Section 108 of the Customs Act as per which Shri Mehta informed M/s. Amrit Laxmi that the bearings listed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmitted to issuing CE certificate dated 28-8-2006 without verification and also issuing similar certificates dated 1-3-1997 and 28-2-1997, without verification, at the behest of Mr. Mehta which were actually used on 5-4-1999 by Shri Mehta. 4.15 Shri Colombowalla has admitted that all the front companies involved in the transaction were managed by Mr. Vora and Mr. Mehta and was aware of the fraud. 4.16 Finally, the ld. AR submits that the goods are liable to confiscation under the provisions of Section 111(d) (for violation of Exim Policy), 111(m) (for wrong declaration of bearings in the DEEC book and Advance Licence) and 111(o) for violation of conditions stipulated in Notification Nos. 149/95 and 31/97. 4.17 He also relies on the judgment in Om Prakash Bhatia case. Accordingly the ld. AR strongly pleads for upholding the impugned order. 5. In their rebuttal to the ld. AR's submissions, the ld. Counsel for the appellant importers submits that the decisions relied upon by the ld. AR for revenue were dealing with cases where forgery was involved in respect of documents submitted for obtaining the licence. None of the said decisions related to dealing with lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 23 Total 248 The amendment further stated - "There is no change in total quantity of bearings allowed and in the total CIF value of the licence. Individual CIF value restriction shown against each import item stands deleted. Import will be made within the quantity mentioned against each import item and within the overall CIF value of the licence". The above amendment was obtained on the basis of a Chartered Engineer's certificate dated 5-5-1999 issued by Mr. J.R. Bharwada who stated the above bearings or equivalent of these have been used in the exports shipment of machines vide shipping bill No. 718767, dated 13-2-1997, 726529 dated 28-2-1997 and 818856 dated 28-2-1997. 6.6 Vide letter dated 13th May, 1999, M/s. Amrit Laxmi Machine Works had requested Sahar ACC customs for release of 160 nos. of bearings [23052 - 62 nos + 23044 - 44 nos. + 23064 - 23 nos. + 23060 - 31 nos.] of value ₹ 6,34,176/- from the advance licence dated 22-11-1996 revalidated up to 21-5-1999 as they wanted to clear the same under DEEC. Again vide another letter dated 13th May, 1999, the said Amrit Laxmi Machine Works requested for release of 80 nos. of bearings of sr. no. 23056 of value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cence, enhancement in the CIF value or amendments including re-validation shall not be allowed. (iii) Upon endorsement of transferability, a duty free licence shall be valid for the balance period of its validity or for a period of six months, whichever is later. However, licences submitted for endorsement of transferability after 30 months of the issuance of the licence shall have a validity upto a maximum period of 36 months from the date of issuance." 6.9 In the instant case, it is on record that the original licence was lost in September, 1999. Hence the said licence could not have been handed over for endorsement of transferability. Only the duplicate licence could have been handed over for transferability and the same could have been done only after its issuance, that is, on or after 22-11-1999. It is for this reason that the endorsement in the amendment sheet No. 1 was made on 9-12-1999 for transferability. Since the licence was submitted for transferability after 30 months of the issuance of the licence, the validity of the licence could have been only for a total period of 36 months from the date of issuance of the licence. That is the reason why the endorsemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. From the records, it is seen that this quantity of bearings had already been imported by May, 1999. Therefore, as per the policy, no further bearings could have been allowed to be imported against the said licence. Therefore, endorsement made on 8-12-1999 by the licensing authority in the duplicate licence issued on 22-11-1999 allowing import of 4248 nos. of bearings was not permissible under the EXIM policy as it stood at the relevant time. Further as per para 7.3, the licence could not have been made transferable since the advance licence is subject to actual user condition and it is non-transferable even after completion of export obligation. Thus the endorsement of transferability made vide amendment sheet dated 9-12-1999 was not sanctioned by law and was in complete disregard of the EXIM policy provisions as they stood at the relevant time. 6.14 Further para 7.27(i) of the Handbook of Procedures clearly excluded from the scope of transferability three types of licences, namely, Special imprest licence, advance licence with actual user condition and annual advance licence. It is for these reasons that when the discrepancies were pointed out by the DRI, the licensing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... import under the advance licence. Only materials which are physically incorporated in the export product or consumables used in the manufacture of export product is permitted to be imported under the advance licence. Therefore, the licensing authority cannot permit any items for import duty free under the advance licence which do not satisfy the above condition. If any such endorsement is made, the same violates the public policy and such endorsement is void ab initio. 6.17 The Hon'ble Apex Court had an occasion to examine and deal with fraud in Commissioner of Customs (Preventive) v. Aafloat Textiles P. Ltd. [2009 (235) E.L.T. 587]. The Hon'ble Apex Court made the following observations. "10. A "fraud" is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage. See S.P. Chengalvaraya Naidu v. Jagannath [1994 (1) SCC 1]. 11. "Fraud" as is well known vitiates every solemn act. Fraud and justice never dwell together. Fraud is a conduct either letter or words, which includes the other person or authority to take a de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f issue of advance licence is for duty free imports, subject to actual user condition as stated in paragraph 7.3(a) of the Exim Policy. Such licences are exempted from payment of Basic customs duty, Surcharge, Additional Customs Duty, Anti-dumping duty and Safeguard duty, if any. Therefore in order to avail the benefit of advance licence, such a licence should be valid at the time of assessment of customs duty. The relevant date for determination of rate of duty and customs valuation is the date of filing of bill of entry. Therefore, at the time of filing the bill of entry, a valid Advance licence in the name of the importer should exist for availing the benefit of duty free import under the said licence. 6.19 In respect of 15 bills of entry dealt by order dated 31-5-2004, it is seen that 5 out of the 15 were filed on August, 1999 and the balance 10 bills of entry on 15-12-1999. In respect of 29 bills of entry dealt by order dated 29-6-2004, 10 bills of entry were filed on 28-12-1999, 1 bill of entry on 15-12-1999 and the balance on 20-12-1999. All these bills of entry were filed by importers who are not the original licence holder but are transferees of the licence. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-Cus., dated 1-4-1997 was correct in law and we uphold the same. 6.21 The ld. Counsel for the appellant has strongly argued that the appellants are entitled for duty exemption inasmuch as the licence was made transferable and the licence stood cancelled only on 24-12-1999. Therefore, the imports made prior to this date are eligible for duty exemption. He has submitted that the licence in this case is only voidable and not void and has relied on a number of decisions of the Hon'ble Apex Court and Hon'ble Bombay High Court. In the Sneha Sales Corporation case decided by the Apex Court, relied upon by the ld. Counsel, it was held that in a case where the licence is obtained by mis-representation or fraud, it is not rendered non est as a result of its cancellation so as to result in the goods that were imported on the basis of the said licences being treated as goods imported without a licence and that fraud or misrepresentation only renders a licence voidable. However, in that a case there was a valid licence in the name of the importer at the time of importation, though obtained by fraud. Similarly in the Sampat Raj Dugar case, it was held by the Hon'ble Apex Court that if on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the goods imported under the aforesaid advance licences vide 44 Bill of Entries covered by the two orders dated 31-5-2004 and 29-6-2004 and part of which was seized at Delhi on 28-12-1999 and 3-1-2000 are liable to confiscation under the provisions of Section 111(d), 111(m) and 111(o) of the Customs Act, 1962 as held by the adjudicating authority. Under Section 111(d) any goods which are imported or attempted to be imported or are brought within the Indian Customs waters for the purpose of being imported contrary to any prohibition imposed by or under this Act or any other law for the time being in force shall be liable to confiscation. Section 111(m) deals with goods which do not correspond in respect of value or any other particular with the entry made under this Act shall be liable to confiscation and 111(o) deals a situation where any goods exempted subject to any condition from duty or in prohibition in respect of the import thereof under this Act or any other law for the time being in force in respect of which the condition is not observed, unless the non-observation of the condition was sanctioned by the proper officer, shall be liable to confiscation. From the facts n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rates of the duty, demurrages incurred and after taking into account these facts into consideration, he has imposed a redemption fine which is approximately 10% of the CIF value of the goods. Considering the fact that bearing is an item which fetches high premium in the market, the redemption fine imposed by the adjudicating authority in the instant case cannot be said to be unreasonable. Therefore, we uphold the redemption fine imposed by the adjudicating authority in lieu of confiscation in the above two orders. 6.25 The adjudicating authority has also confirmed the demand of differential duty amounting to ₹ 65,78,106/- in respect of the 15 bills of entry covered in order dated 31-5-2004 by denying the benefit of Notification No. 149/95, dated 19-9-1995 on the ground that the importers did not have a valid advance licence covering the said imports. He has also demanded interest at the applicable rates on the duty short paid. We have already had that the appellants did not have a valid advance licence at the time of importation of the goods and were not eligible for duty free imports under Notification No. 149/95, dated 19-9-1995 and 31/97, dated 1-4-1997. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to confiscation under Section 111. The penalty imposable in the case of dutiable goods other than prohibited goods is an amount not exceeding the duty sought to be evaded on such goods or ₹ 5,000/- whichever is greater. The penalties imposed on the various persons involved are much less than the ceiling prescribed. Since it is a case of organized racket in advance licensing scheme with an intent to evade huge amount of Customs duty by suppression and fraud, we are of the view that no leniency needs to be shown in the instant case with respect to the quantum of penalty imposed on the appellants. Accordingly, we uphold the penalties imposed on all the appellants under Sections 112(a) and 112(b) of the Customs Act, 1962. The importers (transferees of the licence) in this case very well knew that the original licence issued was a licence with an actual user condition and the same is not transferable. Yet by manipulation and misrepresentation, the licence was made transferable and ineligible items were got incorporated in the list of imports. The importers also knew that the licence was valid only up to 21-11-1999 as per the endorsement on the duplicate licence issued on 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent therein imported four consignment of copper scrap totally weighing 86.963 MTs in four containers and availed benefit under Notification No. 48/99-Cus., dated 29-4-1999 which permitted import duty free under the annual advance licence with actual user condition. The licence was obtained by fraud inasmuch as the appellant did not have any factory for manufacture of goods as envisaged in the licence. The respondent contested that the goods are not liable to confiscation under Section 111(o) as there is no misdeclaration in the import documents and consequently there is no liability to penalty. The adjudicating authority held the goods liable to confiscation and imposed fine and penalty. The same was challenged before the Tribunal which held that the goods are not liable to confiscation under Section 111(o) and importer not liable to penalty on the ground that contract was never void and is only voidable. The revenue challenged the matter before the Hon'ble High Court and the court held as follows. "For the purpose of obtaining such licence with actual user condition, it is mandatory that the importer should be a manufacturer-exporter. The importer made a false declara ..... X X X X Extracts X X X X X X X X Extracts X X X X
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