1. These three appeals relate to the same issue of import of 75 bales of Mulberry Raw Silk which arrived at Madras Harbour on 27-9-1986. The supplier of the goods was Brightex (H.K.) Corporation. Appeal No. 19/88 filed by JB Trading Corporation and Appeal No. 98/88 filed by appellant Brightex (HK) Corporation are directed against the order dated 15-9-1987 passed by the Collector of Customs, Madras confiscating the consignment of raw silk absolutely under Section 111(d) of the Customs Act, 1962 read with Section 3 (2) of Import & Export (Control) Act, 1947 on the ground that import was unauthorised and without a valid import licence. Appeal No. C/384/88 is filed by appellant J.B. Trading Corporation against Order-in-Appeal dated 22-3-1988 passed by the Collector of Customs (Appeals), Madras by which he had confirmed the order of the Deputy Collector of Customs, Customs House, Madras in which the Deputy Collector had held that the Bills of entry filed for the clearance of the consignment of raw silk by appellant JB Trading Corporation as importers cannot be allowed to be noted in the Customs House under the law.
2. The facts in brief are that on 29-9-1986 M/s. Jeena & Co. Customs House agent filed three Bills of entry with invoices dated 4-9-1986 of appellant Brightex (HK) Corporation on behalf of M/s. Continental Silk House. The Bills of entry were accepted by the Customs House. The goods covered by the three Bills of entry were valued at Rs. 3,43,651/-( Rs. 3,45,910/- and Rs. 3,45,792/- c.i.f. Meanwhile information was received to the effect that the said importers were not in existence and import licence was obtained by fraud and mis-representation. The Joint Chief Controller of Imports and Exports also took action to cancel the import licence in the name of M/s. Continental Silk House by way of issue of show cause notice. Show cause notice was not served on the importers.
There was no such company on the said address. The JCCIE made further enquiries and also initiated proceedings which culminated in the cancellation of the licence issued to the said party on the ground that licence was obtained by fraud and mis-representation and forged documents. Adjudication proceedings were also initiated by the Customs House proposing to confiscate the goods under Section 111(d) of the Customs Act, 1962 read with Section 3(2) of the Import & Export (Control) Act, 1947. The show cause notice issued to the party was returned un-delivered. Meanwhile Shri LU Balani counsel for appellant JB Trading Corporation requested the Customs to note the Bills of entry filed by them namely JB Trading Corporation as they were in possession of the original Bill of lading in respect of the very same goods mentioned above. Since three Bills of entry had already been filed by M/s. Continental Silk House for the clearance of the same goods and adjudication proceedings had already been initiated by way of issue of show cause notice, the Customs House informed Counsel Balani by letter dated 31-3-1987 that the request of the party could not be acceded to and the Bills of entry filed by appellant JB Trading Corporation were not noted in the Customs House for this reason. Appellant JB Trading Corporation filed writ petition before the High Court, Madras seeking direction to the Customs House to receive the Bills of entry filed by them. The writ petition filed by them was dismissed by the High Court, and on appeal therefrom, a Division Bench of the High Court directed the Deputy Collector of Customs to receive the Bills of entry and consider whether the Bills of entry will have to be sent for further processing or not on merits and make an order if he wanted to reject the same on any ground. The High Court also made it clear that investigations in regard to the earlier Bills of entry filed by M/s.
Continental Silk House can be proceeded with. Upon the directions of the Madras High Court, the Bills of entry were received and after considering the submissions made on behalf of the appellant JB Trading Corporation, the Deputy Collector of Customs by his order dated 1-9-1987 held that they cannot be permitted to note the Bills of entry in the Customs House for further processing. The order of the Deputy Collector was also communicated to M/s. JB Trading Corporation on 10-9-1987. In their letter dated 19-8-1987, Shri Balani, Counsel for the appellant informed the Deputy Collector of Customs that JB Trading Corporation is the owner of the goods under reference and they should be made a party in the proceedings before the Collector on the basis of certain decisions of the Madras High Court in the case of Indian Overseas Bank \. Collector of Customs, Madras reported in 1984 TAX.L.R. 2427. The Counsel's contention was considered by the Department and he was informed by the Department that the facts and circumstances cited by him were entirely different from those of the present case and the decision of the Madras High Court was not applicable to the present proceedings and hence his request for impleading his client could not be accepted. Thereafter the Collector proceeded to adjudicate the case and held that as the importation of the goods had already taken place in the name of M/s. Continental Silk House against specific licence issued which had since been cancelled by the licensing authorities, the goods were not covered by valid licence and hence ordered absolute confiscation of the goods under Section 111(d) of the Customs Act, 1962. Appellant JB Trading Corporation later filed a Writ Petition before the Madras High Court and the Court in its order dated 21-12-1987 dismissed the same with the direction that the appellant JB Trading Corporation should approach the Ministry of Finance for redressal and relief. Further appeal was filed before the Hon'ble High Court of Madras and the Division Bench in its order in Writ Appeal No.243/86, dated 9-12-1988 rejected the appeal with the direction that it is open to the appellants to urge all the points before the Tribunal and that certified copy of the order of confiscation be supplied by the Customs Authorities to the appellant within two days. The High Court also stayed the order of confiscation until the final disposal of the application pending before the Tribunal. The appellant JB Trading Corporation are thus before the Tribunal with their appeals.
3. Shri Anil Balani, learned Counsel appeared for appellant JB Trading Corporation and Shri Patel, learned Counsel for appellant Brightex (HK) Corporation. Taking up first their appeal against the order of the Collector (Appeals) (Appeal No. C/384/88), the learned Counsel urged that appellant JB Trading Corporation were the owners of the goods because Bill of lading has been clearly endorsed in their name. There was also a delivery order in favour of the appellants JB Trading Corporation and the appellants have also paid for the goods and hence have clear title for the goods. On the other hand M/s. Continental Silk House were never the owner of the goods. They never had any delivery order in their name nor had they retired the documents from the Banks by paying for the goods. Mere filing of Bills of entry by M/s.
Continental Silk House would not make any difference. In this context the learned Counsel referred to the definition importer occurring in Section 2 (26) of the Customs Act, 1962 and argued that the appellants herein had filed the Bills of entry as owners of the goods before clearance of the goods for home consumption and hence were the importer under law since they were in possession of the Bank documents and Bill of Lading and Invoices which are all in their name. They had also a valid import licence. It was also submitted by the learned Counsel that the cancellation licence issued to M/s. Continental Silk House cannot be held against appellant JB Trading Corporation for which proposition he relied upon the decision of the Supreme Court of India reported in AIR 1962 Supreme Court 1893 in the case of M/s. East India Commercial Co. Ltd. v. Collector of Customs, Calcutta wherein it was held that licence obtained by mis-representation does not make the licence non-est and that licence obtained by fraud is only voidable and it is good till avoided in the manner prescribed by law. He also relied upon the decision of the Bombay High Court in the case of Sampath Raj Dugar v. Collector of Customs, Bombay reported in 1988 (15) ECR 338 wherein the Court held that confiscation of the imported goods for an offence committed by a person who is not the owner of such goods is not valid.
The learned Counsel urged that finding of the High Court in respect of the interpretation of the definition of the term 'importer' under Section 2 (26) in the judgment is important. The Court had observed that definition of the expression importer placed the owner before the person who held himself out to be the importer, and that as between the owner and the person holding himself out to be importer, it is the former who takes the precedence. In the present case also M/s. JB Trading Corporation, being the owner, should have precedence over other person who may hold himself to be the importer and may not be the owner thereof. M/s. Continental Silk House, according to the learned Counsel were never the owners. The learned Counsel further placed reliance upon the provisions of Sale of Goods Act, 1930 wherein according to Section 25 (2) relating to reservation of right of disposal, it has been laid down that where goods are shipped or delivered to a railway administration or carriage by railway and by the Bill of Lading as the case may be, the goods are deliverable to the order of the seller or his agent, the seller is prima facie deemed to reserve right of disposal. In this case, the foreign supplier had reserved to himself the right of disposal as is clear from the Bill of Lading. Referring to the reasoning given by the Deputy Collector, the learned Counsel further contended that the fact that there was no cancellation of the Bills of entry filed on behalf of M/s. Continental Silk House by the CHA could not make any difference because the Bills of entry are non-est in the eye of law and the learned Counsel further submitted that it is perfectly in order for another person to come forward as the importer of the goods which had arrived at the port. In this connection he placed reliance in the decision of the Madras High Court in the case of S. Narayanan v. Collector of Customs, Madras in Writ Petition No.1045 of 1958 decided on 20-4-1961. In that case also the consignment had arrived at Madras Harbour. The original importer thereof to whom the supplier was committed refused to take delivery on the ground that validity of the licence has expired. In such a situation another person who had a valid licence negotiated with the supplier to take delivery of the consignment at a substantially lower value. The supplier agreed and the High Court in its order held that import was valid. The learned Counsel also assailed the order of the Collector (Appeals) holding Deputy Collector's order that the appellants JB Trading Corporation had the opportunity to know about the investigations into the fraudulent action of M/s. Continental Silk House in obtaining their import licence because F.I.R. had already been filed, on 2-12-1986 itself, whereas the appellants had got the goods endorsed in their favour much later than that date in December 86. The learned Counsel contended that such finding was untenable because there was no scope for the appellants herein to have come to know about the F.I.R. being filed against M/s.
Continental Silk House as they had independently negotiated for the purchase of the goods with M/s. Brightex (HK) Corporation.
4. In respect of their appeal against order of confiscation passed by the Collector of Customs (Appeal No. C/19/88), the learned Counsel submitted that the Collector failed to appreciate that the appellants being the owner of the goods were entitled under Section 124 of the Customs Act to be heard in the matter and the adjudication order of the Collector has been passed without complying with the provisions of Section 124 of the Act. The Collector, according to the learned Counsel, was in grave error in not affording an opportunity of hearing against the confiscation of the goods. The Collector had failed to consider that M/s. Continental Silk House was never the owner of the goods and could not have therefore been the importer as defined under Section 2(26) of the Customs Act. Therefore, the learned Counsel pleaded that the appellants should be given the opportunity to put forth their case before the adjudicating authority. He also relied upon the decision of the CEGAT reported in 1987 (28) E.L.T. 521 in the case of Jagir Singh v. Collector of Customs and Central Excise, Chandigarh that the adjudicating authority was bound to decide the case after affording a reasonable opportunity to the person claiming ownership of the goods during the adjudication proceedings.
5. Shri Patel, the learned Counsel appearing for the appellants M/s.
Brightex (HK) Corporation submitted that the appellants had made specific request for re-shipment which has been disregarded by the Collector in his adjudication order. The learned Counsel placed reliance upon the Bombay High Court judgment reported in 1988 (15) ECR 338 in the case of Santpat Raj Dugar v. Collector of Customs, Bombay, which was also cited by the Counsel Shri Balani to contend that since the documents had not been retired from the Bank by M/s. Continental Silk House and as the title to the goods had not been passed on, re-export ought to have been allowed to the appellants who are the foreign supplier. It was further submitted that in the case decided by the Bombay High Court also the facts were similar and the contention of foreign supplier who claimed his right to have the goods re-exported was upheld by the Bombay High Court which had quashed the order of confiscation passed by the Customs authorities on the ground that the advance licence obtained by the importer in India had been cancelled for the reasons that it was obtained fraudulently. The learned Counsel further placed reliance upon another decision of the Bombay High Court in the case of PFAFF Industriamaschinen v. Additional Collector of Customs, reported in 1988 (37) E.L.T. 500 (Boom.). In that case also the goods sent by the foreign supplier on importation into India was not taken delivery of by the importer and in such a situation the foreign supplier sought re-export of the goods but the Additional Collector of Customs ordered confiscation of the goods because the import was without a valid licence and permitted re-shipment on fine.
The High Court held that such confiscation was not sustainable.
Therefore, in this case, the appellants who are the foreign supplier and in whom the ownership was vested were well within their right to ask for re-shipment of part of the goods and such a request ought to have been allowed in the light of the decisions relied upon.
6. Shri K.K. Bhatia, the learned S.D.R. appearing for the Department submitted that dealing with the appeal of M/s. Brightex (HK) Corporation, the goods have been imported without any valid licence at the time of import and attracted confiscability in terms of Section 111 (d) of the Customs Act, 1962 and whether the goods are to be allowed re-reshipment or not will follow an order of confiscation and the option to be given or not to the parties seeking such a re-export is at the discretion of the adjudicating authority. It cannot be demanded as a matter of right. As for the other submission regarding appellants JB Trading Corporation, the learned S.D.R. urged that the definition of the term "import", "imported goods" and "importer" occurring in Sub-section 23,25 and 26 of Section 2 of the Customs Act, have to be considered in harmony. Import means bringing into India from a place outside India. Imported goods means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption. The term importer specifies in relation to any goods at any time between their importation and the time when they are cleared for home consumption, including any owner or any person holding himself out to be the importer. In this case, at the time of import, M/s. Continental Silk House have held themselves out to be the importer by filing the Bills of entry which have been duly noted by the Customs House and that it was found that they did not have any valid licence as the licence in their possession was cancelled, and, as such, confiscability was attracted under Section 111(d) of the Customs Act, 1962 because Section 111 relates to goods brought from outside India and Sub-section (d) thereof covers 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 under the Act or any other law. Therefore, Section 111(d) clearly refers to the time of import and at the time of import in this case, the importer was M/s. Continental Silk House. They did not produce any valid licence and the licence in fact was cancelled for having been obtained by fraud, and since it was never produced before the Customs authorities for scrutiny, the confiscation of the goods by the Collector, according to the learned S.D.R., is in order. It was further pointed out by the learned S.D.R. that Section 30 of the Customs Act, 1962 refers to the delivery of import manifest by the master of the vessel and in the related import manifest for the vessel carrying raw silk in question the name of the importer was given as M/s. Continental Silk House. There was no formal amendment to the other entries in the IGM. Therefore, the finding of the lower authority that there cannot be another noting of Bills of entry against the same serial number in the IGM is valid. The learned S.D.R. also relied upon the observation of the single Judge of Madras High Court in the case of the appellants which they took before the Division Bench in appeal. In that order the learned Judge had lucidly brought out the issue and had also relied upon the Supreme Court judgment in the case of Fedo (P) Ltd. v. SN Bilgrami, reported in AIR 1960 SC 415 wherein the Supreme Court held that the entire system of control and regulation of imports by licence was on the basis that the licence was granted on correct statement of / relevant fact and that if the grant of licence was induced by fraud or mis-representation that basis disappears and that it would be absolutely unreasonable that such licence should be allowed to continue. The learned S.D.R. further submitted that this finding of the High Court have not been up set by the order of the Division Bench.
7. The learned S.D.R. further had objection to the appearance of the Counsel to represent the foreign supplier Brightex (HK) Corporation. He pointed out that there was no Vakalatnama submitted as per procedure and the status of the person in the firm authorising the Counsel to put in appearance on their behalf is not clear as also where it was that the authorisation was signed. The appellants admittedly are residing abroad. Replying Shri Balani, the learned Counsel urged that the test of the ownership is not the entry in the IGM but the documents of title which appellants JB Trading Corporation possess. Provisions of Section 30 relating to the delivery of import manifest also provide for its amendment. There was an application for such amendment submitted by the Steamer agent for amending the name of the importer in favour of JB Trading Corporation. There has been no separate order by the Department on this application.
8. We have carefully considered the submissions made by the learned Counsels and the learned S.D.R. The issues are whether the Bills of entry filed by appellants JB Trading Corporation ought to have been received and noted in the Customs House and taken up for further processing against the documents in their possession like invoice, Bill of Lading and the import licence. This is in respect of 25 bales out of 75 bales of Mulberry raw silk manifested in the IGM for which quantity only appellants JB Trading Corporation are claiming clearance. The other issue is whether appellants Brightex (HK) Corporation would be eligible for re-export of the balance of consignment without confiscation. For this purpose, it will be necessary to consider the provisions of Section 30 of the Customs Act, 1962 which reads as follows: "30. Delivery of Import manifest or import report - (1) The person in-charge of a conveyance carrying imported goods shall, within twenty-four hours after arrival thereof at a customs station, deliver to the proper officer, in the case of a vessel or aircraft, an import manifest, and in the case of a vehicle, an import report, in the prescribed form: (a) in the case of a vessel any such manifest maybe delivered to the proper officer before the arrival of the vessel; (b) if the proper officer is satisfied that there was sufficient cause for not delivering the import manifest or import report or any part thereof within twenty-four hours after the arrival of the conveyance, he may accept it at any time thereafter.
(2) The person delivering the import manifest or import report shall at the foot thereof make and subscribe to a declaration as to the truth of its contents.
(3) If the proper officer is satisfied that the import manifest or import report is in anyway incorrect or incomplete, and that there was no fraudulent intention, he may permit it to be amended or supplemented." The further position in law is given in Section 46 of the Customs Act which says - The importer of any goods shall make entry thereof by presenting to the proper officer a bill of entry for home consumption in the prescribed form. After the Import General Manifest (IGM) is accepted on delivery thereof by Steamer agent, the owner or the importer is required under Section 46 of the Act to deliver to the proper officer the Bill of entry (B/E). The procedure is that the Bill of entry (B/E) should be presented to the Customs House upon which it will be taken up for noting in the IGM. While noting the Bill of entry, the procedure followed is that the particulars in each B/E such as name of vessel, port of shipment, name of importer etc. etc. are checked with the corresponding details in the original IGM. If these are in order, the entry in the manifest along with the name of the party and its address and the Customs House Agent's name, date of presentation of the B/E is entered in the IGM. From this it is clear that only if the details furnished in the B/E agree with those in the IGM, noting will be made. Amendments in the! manifest are resorted to only in certain cases as per the provisions of Section 30 (3) of the Customs Act, 1962.
It is clear from Section 30 (3) that if the import manifest is in any way incomplete or incorrect then the proper officer has the discretion to permit the amendment, and that too if there was no fraudulent intention. Coining to the facts of the present case the Bilk of entry were filed originally in the name of M/s. Continental Silk House, on 29-9-1986. The Bills of entry were noted by the Department since the details in the Bills of entry agreed with those in the manifest. As it happened, after such noting of these Bills of entry, M/s. Continental Silk House did not take any steps for the clearance of the goods.
Meanwhile it was found on investigation that the import was made in the name of a fictitious firm and clearance was claimed against an import licence obtained by mis-representation. The licence was cancelled by the licensing authority after due process of law. Even in the proceedings for the cancellation of the licence, there was no response from M/s. Continental Silk House to the show cause notice. Meanwhile appellants JB Trading Corporation filed Bills of entry for the clearance of the goods. The Customs House did not permit noting of the Bills of entry by JB Trading Corporation, retailed reasoning for these are contained in the Deputy Collector's order dated 1-9-1987. It was found that the manifest indicated the name of the importer as M/s.
Continental Silk House as the importers and marks and number also indicated that the goods were meant for M/s. Continental Silk House.
The Bills of entry filed by M/s. Continental Silk House had also not been cancelled. The Customs House Agent Jeena & Co. had also stated during the adjudication proceedings that no import licence was sent to them nor any amount given for duty but they had filed the Bills of entry in good faith only to avoid any delay. Then comes the request for the amendment of the manifest filed by the Shipping agent. This request is dated 2-1-1987 which merely says that the manifested importers name and address be amended to the name of JB Trading Corporation. It gives no reason. Section 30 of the Act, as we have seen permits amendment only if entry is incomplete or incorrect. Application for amendment did not say the import manifest is incorrect, and the Custom House did not find the entry as incomplete for any reason. Meanwhile Custom House also had information that fraud had been perpetrated in effecting the import. In such circumstances, it has to be held that the rejection of the request for amendment of the manifest in favour of the appellants JB Trading Corporation and for receiving the Bills of entry filed on their behalf is valid. The appellants argued that appellants JB Trading Corporation held title to the part of the consignment and Bill of Lading has been endorsed in their name. They have paid for the goods and the delivery order is also endorsed in their name and as such they should be considered as the importers. This however, has to be considered in the light of the position in law. The goods arrived on 27-9-1986 on which day the import of the goods had occurred, having regard to their entry into the territorial waters of India, and the further step of filing of Bills of entry under Section 46 of Customs Act for the purpose of assessment of the goods so imported in terms of Section 15 of the Customs Act, by filing Bills of entry prescribed in terms of Section 46 thereof had also been taken at that relevant time by M/s. Continental Silk House as the importer, and all the documents indicated them as the importer. In this context, the entry in the import manifest is very relevant for the purpose of Customs Act, because after the completion of the importation upon the goods entering the territorial waters of India, and the filing of the Bills of entry, there cannot be another importer for the very same goods. The provisions of Sale of Goods Act in this context will not be of much assistance to the appellants because this Act applies to the whole of India and its provisions do not extend as in this case to a contract the terms of which were finalised admittedly outside India at Hongkong.
We, therefore, hold that the goods on completion of their import into India were not covered by valid import licence. The importer was found to be fictitious firm and licence issued to them was one fraudulently obtained, and in these circumstances, therefore, Section 111 of the Customs Act, 1962 gets attracted, because the goods in question had admittedly been brought from outside India, and in terms of Sub-section (d) thereof these goods had been brought into Indian waters for the purpose of being imported contrary to the prohibition imposed as there was no valid import licence. In this context the argument has been put forth that even if the import licence was found to be obtained by mis-representation or by fraud is only voidable and that import effected against such licence is not vitiated. Reliance has been placed in this connection in the decision in the case of East India Commercial Co. v. Collector of Customs, Calcutta -1983 (14) E.L.T. 1893 (S.C.) decided by the Supreme Court. As against this the learned S.D.R. had drawn attention to the decision of the Supreme Court in the case of Fedco (P) Ltd. v. SN Belgrami wherein the Supreme Court held that where an import licence obtained by fraud, it is not a licence at all We have carefully perused the two decisions of the Supreme Court. In the East India Commercial Co. case, the facts were that the appellants therein were granted import licence for import of fluorescent tubes with the condition that the goods were to be utilized only for consumption as a raw material or accessories in the factory of the licence holder and no part thereof would be sold to any party. After clearance of the goods the licensing authorities found on enquiry that the appellants therein had sold part of the goods in the market. Therefore, proceedings were simultaneously instituted by the Collector of Customs also for confiscation of the goods on the ground that the condition in the licence stipulated has been violated by the appellants and that import was unauthorised. By a majority judgment, the Supreme Court held that breach of condition imposed in the licence issued to the importer is no breach of an order made under Section 3 of the Import & Export Control Act and that the licence obtained by mis-representation is voidable and not void. It may be noted that in that case, at the time of import, the importer namely M/s. East India Commercial Co. had produced the import licence which had been scrutinised by the Customs and clearance of the goods allowed. It is also to be noted that while giving its decision in that case, the Supreme Court also noted that on 1-5-1948, the Govt. of India issued orders authorising the Govt. of India or the CCI&E to cancel the licences obtained by mis-representation and to make them ineffective. The Supreme Court observed, The specified authority has not cancelled the licence issued in this case on the ground that the condition has been infringed." Therefore, it is seen that M/s. East India Commercial Co. case is not on all fours with the present case because, firstly, the licence issued to M/s. Continental has never been produced for scrutiny by the Custom House in this case and the goods had not been allowed clearance at all. Secondly, there was in fact an order by the competent licensing authority to cancel the licence because it had been obtained fraudulently. On the other hand, the facts of the Fedco case would be of relevance, in our view, to the facts of the present case. In that case, decided by a Constitution Bench of five judges, the Supreme Court was dealing with a case where the licensing authority found that certain import licences had been issued fraudulently by forgery. On coming to know about this, the licensing authorities issued notice to the party to whom the licences had been issued and cancelled them. The party to whom the licences were issued had also effected certain imports against those licences which were pending clearance and they moved the Supreme Court. It is in this context that cancellation of the licence was contested and the Supreme Court held that "entire scheme of control and regulation of imports by licence is on the basis of the licence granted on a correct statement of relevant facts and that basis disappears if the grant of licence is induced by fraud or mis-representation.... It will be absolutely unreasonable that such licence should be allowed to continue". In the present case, the licensing authorities found that both M/s.
Continental Silk House which obtained the licence and their supporting manufacturer were fictitious firms, and on this basis issued notices for cancelling the licences for which there was no response and the notice was returned undelivered, and ultimately cancelled the licence.
In such a context it was found by the Collector that there was no valid licence for the import and hence he ordered confiscation of the goods which had already arrived into the Indian waters and for clearance of which Bills of entry were also filed by the importer. We also note that before the learned Single Judge of the Madras High Court, in the Writ Petition filed by appellants herein both these cases, namely, East India Commercial Co. Ltd. and M/s. Fedco had been cited, and the Court had quoted with approval the decision in the Fedco case while concluding that the goods imported by M/s. Continental Silk House whose licence had been cancelled as having been obtained fraudulently is unauthorised and the goods confiscable under Section 111(d) of the Customs Act. Reliance has also been placed on the Bombay High Court decision in the case of Sampat Raj Dugar, 1988 (15) ECR 338 and in the case of S. Narayanan v. Collector of Customs, Madras to contend that as owner of the goods appellants JB Trading Corporation should be allowed clearance of the goods as importer thereof. It is noted in the case of Sampat Raj Dugar, the importer of the goods against advance licence claimed right to take delivery of the goods, and when the proceedings were initiated against him by the Customs authorities, he abandoned the goods, where-after the foreign supplier of the goods came on the scene and participated in the adjudication proceedings to stake his claim as owner of the goods for re-export thereof. In the present case the Bills of entry filed by the importer M/s. Continental Silk House was never cancelled and nor was there any abandonment of the goods by the importer, and the foreign supplier did not at all make himself a party to the adjudication proceedings as owner of the goods and is hence distinguishable. In the other case, S. Narayanan v. Collector of Customs, Madras, the question whether the original importer having not come forward to clear the goods, another importer can take that place, was never an issue before the High Court. On the other hand the whole issue therein was with reference to valuation of the goods as the Court addressed to itself the question involved in that case namely whether valuation of imported goods for assessment to Customs duty will have a link with face value of the import licence. Therefore, these decisions are distinguishable. Further, the appellants contention that they could not have been in the know of the CBI enquiry into the affairs of the Continental Silk House is also not tenable in the light of the fact that as early as 12-6-1986 the CBI enquiry had been commenced and the appellants had come on the scene much later. It is difficult to imagine that during the initiation of their transaction with the supplier the appellants expressed no curiosity to find out the reason as to why the consignment already arrived in India for another importer had not been cleared especially considering that the import of the goods in question was allowed on condition of fulfilling export obligation. The argument is put forth that they had title to the goods as the B/L is endorsed in their name and hence as owners they are the importers. However in this context the observation of the Calcutta High Court while interpreting the provisions of the Indian Bills of Lading Act, 1856, are relevant.
The Court observed "The property does not pass by the mere fact of endorsement on the Bill of Lading but the contract and the context in which the endorsement is made must always be taken into consideration to see for what purpose the endorsement was made" - ILR (1970) 1 Cal.
459. The Bill of Lading in this case was originally endorsed in favour of M/s. Continental Silk House which was later struck off and again endorsed in the name of appellants JB Trading Corporation. In examining the context, the observations of Hon'ble Madras High Court while dealing with the appellants' writ petition before the learned Single Judge are pertinent, when the Court observed "If the contention of the petitioner is to be accepted whenever any consignment is liable for confiscation for some violation, the importer could be substituted by some other person to file the Bill of entry for clearance. It is almost certain that having come to know of the proceedings, the petitioner, with a view to circumvent the same, is claiming itself as 'Importer' in order to set at naught the adjudication proceedings and the confiscation of the goods. It is rather surprising that when the petitioner has accepted that its payment is against D/P basis, instead of refusing to retire the documents, it is making ingenious attempts to clear the goods which have been illegally imported into India by a fictitious firm on the strength of forged documents concerning which R.C. No. 19 of 1986 is pending. There is absolutely no scope for the petitioner to claim the right of an 'Importer'; more so, after the first information report came to be filed on 2-12-1986 while the invoices of the petitioner bear the dates 15-12-1986 and 16-12-1986.
'Fraud is infinite in its variety and this is one'such variety". In the circumstances, on a total consideration of the evidence, the findings of the lower authority that Bills of entry filed by appellants JB Trading Corporation could not in law be permitted to be noted and further processed is well founded and upheld.9. The case of the appellant Brightex (HK) Corporation is that as the owner of the goods, re-shipment requested for by them ought to have been acceded to, as they were the owner of the goods as the supplier who had not parted with the title thereof for the part of the consignment. The learned S.D.R. raised preliminary objection that there was no Vakalatnama in respect of this appellant. Examining this objection we find that proviso to Rule 13 of the Customs, Excise & Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 requires that where an authorised representative is a legal practitioner document of authorisation shall be a duly executed Vakalatnama. In the case of the present appellant, what is presented is a simple document appointing M/s. C.R. Patel & Co. Advocates to act and appear and plead on behalf of the appellant. Although it could be said that such a document is not a duly executed Vakalatnama envisaged in the CEGAT (Procedure) Rules, 1982, we do not think it necessary to sustain the objection which is at best technical. It was argued that for them also notice ought to have been issued hi terms of Section 124 of the Customs Act, 1962 by the Collector. We are unable to agree to this proposition. It is clear from the discussions above that confiscability of the goods is clearly attracted in terms of Section 111(d) of the Customs Act, 1962 when once it was found that the import licence produced by the importer who filed Bills of entry for the clearance of the imported goods was found to be fraudulently obtained and cancelled, and hence, at the tune of import, there was no valid licence and also that no such licence hi fact was produced at all in this case for the scrutiny of the Customs. In this context, it is relevant to refer to the decision of the High Court of Calcutta in the case of Sheo Pujan Raj Indrasan Rai Ltd. v. Collector of Customs, AIR 1952 Cal. 789. The Court observed "The offending contraband goods are subject to forfeiture, if the Customs authorities are of the opinion that goods are imported goods and importation has taken place at a time when there was prohibition against such importation. It is not essential for confiscating the goods that the person who actually imported the goods has to be found out, tried and convicted. If, of course, such person can be detected, and his implication is established then personal pecuniary penalty can be imposed upon him also". Reliance was also placed by the appellants on the decision of the Bombay High Court in the case of Sampat Raj Dugar and also in the case of PFAFF Industriamaschimem to urge that the re-export of the goods to the foreign supplier should be allowed without confiscation, as the onwer of the goods. However, as we have already seen, in the case of Sampat Raj Dugar, the foreign supplier though not formally served with a notice, did put in an appearance during the adjudication proceedings through counsel and was heard his contentions dealt with by the Collector in his adjudication order and his specific request for re-export dis-allowed. There was not such participation in the adjudication proceedings before the Collector in the present case by the appellants Brightex (HK) Corporation. It is seen from the records that even in October 86 through their own Bankers, the appellants Brightex (HK) Corporation came to know that M/s. Continental Silk House did not exist in the address given, and yet the appellants did not take any efforts to find out whether Bills of entry have been filed for the clearance of the goods or to notify the Customs, and it was only on 4-2-1988 a letter was addressed to the Collector of Customs, Madras containing their request for re-export of the goods. By that time the Collector had already adjudicated the case by his order dated 15-9-1987. The conduct of the appellants is somewhat strange considering the value of the goods involved. It is equally strange that they had not reacted immediately because we find that the order placed by M/s. Continental Silk House dated 15-6-1986 on the appellants does not refer to any previous correspondence or telephonic conversation in pursuance of which the order was placed and it does not even spell-out the name and status of the signatory who had signed the order "for M/s. Continental Silk House". The case of PFAFF Industriamaschinen is also not on all fours with the present case. In that case when the consignment of Industrial Sewing Machines shipped by a foreign supplier arrived in India beyond the last date stipulated in the letter of credit, the importer in India refused to retire the documents and refused to clear the goods. Thereafter the foreign supplier requested the Shipping Agent to file B/E in respect of the goods for the purpose of reexport of the goods on their own. The Additional Collector confiscated the goods as having been imported without licence but allowed re-shipment on fine. The High Court however, set aside the order of confiscation and allowed re-shipment.
Here again the foreign supplier had himself caused the B/E to be filed in the Custom House for seeking re-export and was party to the adjudication proceedings, whereas no such similar action has been taken by the appellants in the present case. Not having participated in the adjudication proceedings, merely requesting to re-export the goods saying that they have not parted with the ownership thereof is not of any avail to the appellants when once import of the goods into the Indian waters has taken place and the goods thus have become imported goods as defined under the Customs Act, 1962 for which no valid import licence was also produced and thereby the imported goods had become prohibited goods as defined under the Customs Act attracting confiscability under Section 111(d) thereof. The Supreme Court decision in the case of Gramophone Co. of India Ltd. v. B.B. Pandey (AIR 1984 SC 667) is also supportive of this view. The Supreme Court in that case interpreted the meaning of "import" occurring in Section 53 of the Copyright Act, 1957 with reference to the definition of the term "import" in Section 2(23) of the Customs Act, 1962 and held that the meaning of import in Section 53 of the former Act was exactly the same as defined in the Customs Act. The Supreme Court accordingly held meaning of import included importation for transit across India and any such goods whose import is prohibited in India would become confiscable under the Customs Act, 1962 even in the case of goods in transit.
Therefore, on a total consideration of the evidence on record, we find that the orders passed by the lower authorities in this case are well founded and these orders are accordingly upheld and the appeals rejected.