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TMI Blog2002 (4) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of endorsement dated 26-6-2001. Release advises were issued by the Jawahar Customs House to Mumbai Custom House. Enquiries were made by the Custom House at Mumbai Port with the DGFT authorities concerned who informed the customs that the re-validation and transferability was in accordance with the Public Notice dated 31-3-2001. The licence was not suspended and/or cancelled till date and was valid for covering the imports. The goods, pending the dispute raised by the customs authorities in Bombay, were permitted to be removed under the provisions of Section 49 of the Customs Act on revenue deposit of equivalent to the duty thereon amounting to Rs. 18,59,945/-. Commissioner issued letter dated 5-2-2002 seeking effective representation on the following points : (i) The Advance Licence No. 3494809, dated 19-7-95 and respective DEEC Book No. 172721 dated 21-7-95 was issued to M/s. Fortuna Exports. The scrutiny of the licence appear to reveal that while discharging the export obligation under the said licence the goods exported are not as per requirement of the licence. As per the licences they were required to export polished marble slabs (manufactured out of imported mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation has come to the notice of any authority. Therefore, for the reason stated in para 1 above and in view of the conditions of the P.N. No. 2/(PN) 1997-2002, dated 31-3-2001, the collective effect could be there has been mis-representation of the facts with intention to secure logging in the export DEEC Book from JNPT Customs and Ahmedabad Customs. Therefore the said re-validation is not correct and the subject advance transferable licence is expired in terms of the para 7.27 of the Hand Book. Consequently no import under such advance licence appears permissible." 2.The matter was heard and thereafter the Commissioner passed the impugned order F. No. S/16-DEEC-7204/2001-Gr. 7//S/10-96/2002-VII, dated 27-3-2002 imposing redemption fine of Rs. 58.15 lakhs after ordering confiscation of the goods under Sections 111(d) and 111(o) and penalty of Rs. 15 lakhs under Section 112(a) of the Customs Act, 1962. Duty free clearance of the goods was denied against the DEEC licence produced. 3.We have heard the learned advocate for the appellant and considered the material as none appeared for the Revenue and find :- (a) The Commissioner, as it appears from Para 16 of the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made in regard to the facts and without appreciating and evaluating the documents. However, there is equal failure on the part of the office of the Jt. Director, Directorate General of Foreign Trade, Ahmedabad, who did not do second check on the export documents like S/Bills, export invoices, etc. in detecting the discrepancies, deficiencies etc. as discussed in paras above. The Jt. DGFT, was, therefore not to permit the re-validation and transferability of the said licence, as the conditions of P.N. No. 2/2002, dated 13-3-2001 were not fulfilled in the case. However, once the Customs at the time of verification of the"19. licence has detected the facts as discussed in paras 7 and 10 above, there cannot be any other conclusion but to hold that the re-validation and the transferability had been obtained through wilful and deliberate mis-representation, suppression of facts and by submitting misleading information and through fraudulence. It is, therefore, held that the Advance Licence No. P/K/3494809 dated 19-7-95 issued to M/s. Fortuna Exports, Ahmedabad by Jt. DGFT, Ahmedabad's Sheet No 1, dated 26-6-2001 and produced by M/s. Marmo Classic, Silvassa to cover the import of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oper and permissible cannot to be taken into account for giving abatement from MOP for determining the quantum of redemption fine. He found that while implementing any fiscal law and while seeking compliance to such law, any penalty fine or sum spent in regard to any act of omission or commission leading to contravention of a fiscal law is not given deduction or abatement. It is in this context to be held that the expenditures incurred by the importer did not fall within the legal parameters for grant of any abatement from the MOP for arriving at the quantum of redemption fine and he determined the MOP. (c) From a reading of the extracts of the Commissioner's finding, as extracted in sub-para (a) herein above, it is apparent that the Commissioner has sat in judgment over the re-validation and transferability of the licence in question in this case. This decision of the Commissioner and reasons thereof have effectively rendered the licence issued by the competent authority invalid and amounts to cancellation of the same, if not, rendering it ineffective without complying with the procedure prescribed by law for cancellation/revocation of licences under the Import Trade Cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26-6-2001 and produced by M/s. Marmo Classic, Silvassa is invalid or not proper to cover the import of rough marble blocks as mentioned by him in para (1) of the impugned order. (f) The Bombay Custom House has issued a Public Notice as far back in 24-6-1996 which clarifies that the satisfaction of the Assistant Commissioner regarding discharge of export obligation has to be arrived at by the customs authorities at the port of export by logging into the copy of shipping bills and relevant bills of lading. The salient feature of the procedure stipulated revolves around "the monitoring of export obligation by customs shall be a one point exercise". This public notice, as also other public notices, are based on the understanding of the Revenue based on the instructions from CBEC. Therefore once the logging has been accepted by the proper officers at Ports of Ahmedabad and Nhava Sheva which are beyond the jurisdiction of the Bombay Customs, the Bombay Customs authorities have no jurisdiction to come to other conclusions, without getting these orders, of logging of the said exports by the proper officers, set aside. We also find that the same licence has been admitted and clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Before parting with this case we would like to observe that the finding of the Commissioner in para 21 of the impugned order to the effect : "While implementing any fiscal law and while seeking compliance to such law, any penalty fine or sum spent in regard to any act of omission or commission leading to contravention of a fiscal law is not given deduction or abatement. It is in this context held that the expenditures incurred by the importer do not fall within the legal parameters for grant of any abatement from the MOP for arriving at the quantum of redemption fine". also not meeting our approval since it is well settled law as held in the case of Commissioner of Income-tax, Patiala v. Piara Singh - 1980 (124) ITR 40 (SC) by the Apex Court that losses from illegal activity can be offset against gains from same or other activities. We are aware that this decision was in the context of Income Tax, but this would apply, also, to the decision to be arrived at for determining MOP which is nothing but margin of profit required to be worked out on commercial basis. In this view of the matter we do not uphold the calculations on MOP as arrived at in the impugned order by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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