Indras Agencies Pvt. Ltd. Vs Commissioner of Customs (CESTAT Chennai)
The CESTAT Chennai allowed the appeal and set aside the duty demand raised on Indras Agencies Pvt. Ltd. for imports made under transferred DFIA licences, holding that the extended period of limitation could not be invoked against a bona fide transferee in the absence of any allegation or evidence of fraud, suppression, or wilful misstatement on its part.
The appellant had imported three consignments of patchouli oil SPX during 2012 and 2013 by utilising two DFIA licences originally issued to an exporter, M/s. Pan Parag India Ltd., Kanpur, for exports of pan masala/gutkha. These DFIA licences were validly issued by the DGFT authorities and subsequently transferred to the appellant, who used them for duty-free imports. Customs authorities had scrutinised the licences at the time of import and allowed clearance.
Subsequently, investigations were conducted into alleged irregular exports by several exporters, including the original licence holder, on the basis that DFIA licences were obtained by misrepresentation and suppression of facts relating to technical characteristics of essential oils used in exported goods. Show cause notices were issued to the exporter by Customs and DGFT authorities proposing cancellation of the licences. Relying on these allegations, the department issued a show cause notice dated 03/05–12/2014 to the appellant, invoking the extended period under Section 28(4) of the Customs Act, 1962, and demanding duty foregone of ₹25,12,280 with interest on the imports made using the transferred DFIA licences.
