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TMI Blog2016 (12) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... ods. Hon'ble apex court in the case of East India Commercial Co. Ltd. [1962 (5) TMI 23 - SUPREME COURT OF INDIA] has examined the issue in similar set of facts, where it was held that Nor is there 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 Section 3 of the Act so as to bring the case within Clause (8) of Section 167 of the Sea Customs Act. Assuming that the principles of law of contract apply to the issue of a licence under the Act, a licence obtained by fraud is only voidable: it is good till avoided in the manner prescribed by law. In the inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. It was alleged that the appellant had purchased the said licences at a premium of 3-4% which was less than the market rate of premium which was 6%. On these grounds, it was alleged that the appellants were aware of the doubtful nature of the licences. The diamonds imported against REP licences were held to be liable to confiscation and various redemption fines were imposed on the appellants. Penalties under Section 112 of the Customs Act were also imposed on the appellant. Aggrieved by the said order, the appellants are before the Tribunal. 2. Shri T. Viswanathan, Advocate appeared for M/s. Suraj Diamonds Jewellery Ltd. and Shri Anil Balani, Advocate appeared for M/s. Chandan Gems. Nobody appeared for other appellants. The matter w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel also argued that goods cannot be confiscated and redemption fine cannot be imposed as the goods are not available for confiscation. For these arguments ld. counsel relied on the decision of the Hon'ble High Court of Bombay in Finesse Creation Inc. 2009 (248) ELT 122 which has been confirmed by the apex court in 2010 (255) ELT A120 (SC). 3. Ld. AR relied on the impugned order. In the written submission, ld. AR reproduced certain para of the impugned order. Ld. AR relied on the decision of the Hon'ble Apex Court in the case of Aafloat Textiles (I) P. Ltd. 2009 (235) ELT 587 (SC ). He argued that in view of the decision of the apex court no benefit of such licence can be granted to such appellant. Ld. AR also relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iples of law of contract apply to the issue of a licence under the Act, a licence obtained by fraud is only voidable : it is good till avoided in the manner prescribed by law. The decision of the Hon'ble apex court has been interpreted by the Hon'ble apex court in Sneha Sales Corporation (supra). The said decision while interpreting the decision of East India Commercial Co. Ltd. observed as follows:- 5.In the aforementioned decision of this Court it has been clearly laid down that in a case where the licence is obtained by misrepresentation 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 and being treated as goods impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... original authority extensively quoted and relied on the decision of Hon'ble Supreme Court in CC (Prev.) vs. Aafloat Textiles (I) P. Ltd. 2009 (235) ELT 587 (SC) = 2009-TIOL-42-SC-CUS. We have perused the said decision. The Hon'ble Supreme Court in that case was dealing with a Special Import Licence (SIL) which was forged and was never issued by the DGFT. The signature and security seal of the authority was forged. Now in the present case, the REP licences were issued by the competent authority and as such were genuine documents. However, the original parties/ exporters made fraudulent representation by giving forged documents to obtain such REP licences. As such there is a clear difference in facts between the case decided by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of licence is of no relevant nor does it retrospectively render the import illegal. Again, in CC vs. Sneha Sales Corporation - 2002-TIOL-440-SC-CUS held that licence obtained by misrepresentation or fraud does not make it non est as a result of its cancellation. As per Section 3 of the Import and Export Act misrepresentation or fraud renders a licence voidable. When the goods were imported and cleared before such cancellation, contravention of import cannot be alleged. 6. In the instant case the goods which were imported against the licence have been processed and disposed of by the appellant. The goods are not available for confiscation. The goods have not been seized or released against a provisional bond. In these circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X
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