9911796707
TMI Blog2010 (3) TMI 1068X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case, the Hon'ble CESTAT is right in coming to the conclusion that the licences in question were not forged even though 15 out of 22 licences were already submitted to the DGFT authority for cancellation? [iii] Whether, in the facts and circumstances of the case, the Hon'ble CESTAT is right in coming to the conclusion that the respondent is not liable to pay duty under Section 28 of the Customs Act, 1962? [iv] Whether, in the facts and circumstances of the case, the Hon'ble CESTAT is right in coming to the conclusion that the respondent had acquired licences in open market even though the original licence holders have denied the sale of licences to the respondent? [v] Whether, in the facts and circumstances of the case, the Hon'ble CESTAT has rightly applied the principle in-holder in due course?" 3. The respondent in Tax Appeal No.467 of 2009 i.e. M/s H. Kumar Gems Inc. was, inter alia, engaged in the business of gems. The said respondent imported twelve consignments of gold bars and three consignments of silver during the period 24.5.1996 to 20.6.1997 by availing of the benefit of concessional rate of duty in terms of Notification dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or through any broker and that the original licence holders had not received any consideration for disposal of the licences. Out of the 22 licences, 15 licences had been submitted to the DGFT authorities for the purpose of cancellation and had, in fact, been cancelled and defaced. As such, there was no reason for these licences to be available on the market. It is submitted that obviously, some fraud had taken place leading to the licences being available in the market. From the evidence of the original owners, it has come on record that they had not sold the licences and that M/s H. Kumar Gems Inc. had fraudulently acquired the said licences through intermediary. Since the twenty two licences presented to the customs authorities for the purpose of clearance of goods valued at ₹ 28 crores were obtained fraudulently and were not valid for the purpose of availing exemption under the notification, the respondent cannot be allowed to obtain the benefit of the fraud. It is, accordingly, submitted that in the facts and circumstances of the case, the adjudicating officer was justified in confirming the demand of duty along with interest and penalty as well as in imposing penalty o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allegedly involved were aware of the fact of cancellation of the licences, if at all. Not only were the licence numbers appearing in the list of validly issued licences in the monthly bulletins published by DGFT, there was no indication to show that the licences were cancelled. (viii) The transfer letters bear all the details which are normally contained in a transfer letter which had also been admitted by one of the witnesses after seeing the transfer letters in question. That no format of a transfer letter has been prescribed in any statute and the same is a creation of trade and commerce. One witness had admitted in cross-examination that the transfer letters were in accordance with the normal trade practice through brokers. No verification of the transferor is normally required, especially when transfer letters bear the seal and signature of the bank verifying the signature of transferor and the payment is made through banking channels. Transfer letters generally bear the signature verification stamp of the bank which the transfer letters in question also bear. The record does not show whether any inquiries were made with the bank to ascertain the genuineness of the signature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent - H.Kumar Gems Inc. has not acquired a clear title to the licences in question. In the event of any defect in title, it is open to the person claiming to be the original owner of the licences to sue H.Kumar Gems Inc. for loss or damage to him. However, insofar as the customs authorities are concerned, if a licence which is not forged is produced for clearance of goods, and is otherwise valid to cover the goods in terms of description, quantity, value and all other material particulars, they have no jurisdiction to sit over a dispute to title to the said licence. (vi) Notification No.117/94-CUS. which is the relevant notification in the present case, provides for exempting goods when imported against Special Import Licences and, therefore, it follows that so long as the licences produced are valid, the goods should be allowed to be cleared by the "importer" producing the same. 6.2 The Tribunal accordingly held that the non-appearance of any endorsement on the licences as regards their cancellation would frustrate the very purpose of their cancellation inasmuch as the said cancellation can be performed in the way prescribed and at least by showing the cancellation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noted hereinabove, the letter does not disclose the date of cancellation of the licences. Shri Sohan Chand has not put in appearance, despite summons having been issued to him. Thus, in absence of the author of the letter in question, appearing as a witness and proving the contents thereof, or permitting the other side to cross examine him in relation to the same, the contents of the said letter cannot said to have been proved so as to attach any evidentiary value to the same. The said letter is, therefore, not admissible in evidence. Apart from the said letter, there is no evidence worth the name coming forth to indicate that the said licences were indeed cancelled and defaced by the DGFT. It is perturbing to note that though it is the categorical case of the revenue that the licences in question had been cancelled and defaced, revenue is not in a position to produce any material whatsoever to substantiate the said fact. The Tribunal has recorded that the Exim Policy and the Handbook of Procedures, does not prescribe any procedure for cancellation of licences, however, if there is a provision for cancellation of licence, there must be some procedure which must have been followed p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act is concerned, the Tribunal has found, as a matter of fact, that there is no suppression or willful misstatement on part of the importer. That the licences had been procured bonafide in the ordinary course of its business and that the importer had no knowledge that the licences were cancelled. Thus, it is apparent that the ingredients for invoking the extended period of limitation under the proviso to section 28(1) of the Act have not been satisfied. In the circumstances, the Tribunal has rightly held that the demand is barred by limitation.
11 In view of the findings of fact recorded by the Tribunal after appreciating the evidence on record for the purpose of arriving at the conclusion that the Special Import Licences were valid and that, there was no suppression or willful misstatement on part of the respondent so as to attract the provisions of the proviso to section 28 of the Act, it cannot be stated that the impugned order of the Tribunal suffers from any legal infirmity so as to warrant interference.
12 In absence of any question of law, much less any substantial question of law, the appeals are dismissed with no order as to costs. X X X X Extracts X X X X X X X X Extracts X X X X
|
