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2022 (9) TMI 445 - HC - CustomsDEPB scheme - related parties or not - connection between the petitioner and the vendor from whom scrips were purchased or not - misrepresentation and suppression of facts - furnishing of forged certificates from the bank or not - bona fide purchaser who has transacted in the purchase of the scrips for valuable consideration - HELD THAT:- The original vendor has purchased the scrips in compliance of the procedure set out under the Handbook of Procedure to the Export Import Policy 1997-2002. The objectives of the Handbook are set out in para 2.1 thereof, that is, to implement the provisions of the Foreign Trade (Regulation, Development and Regulation) Act, 1992 as well as the export policy for the relevant period. It is only upon confirmation of receipt of export realisations that the scrip shall be endorsed to be non-transferable. This is what has transpired in the present case as well. Admittedly and undoubtedly, there is a presumption that the officer endorsing the scrips to be transferable would and should have satisfied himself that the conditions precedent to issuance of the scrips are in order. The endorsement of transferability was made only after such satisfaction by the officer, and the fatal error, in this case, has transpired at this stage, and not at the instance of the petitioner - Separately, the original vendor had forged the bank realisation certificates. In such an event, the fraud is attributable to the original vendor only and not to the petitioner who is a subsequent purchaser. In fact, the impugned show cause notices, in conclusion, attribute fraud only to the original vendor and not to the importer. There is an unambiguous findings of fact to the effect that the appellants in that case (the subsequent purchasers) were engaged in dubious practices and secret arrangements and the nexus between those entities and the fraudulent acts have been clearly established by the revenue in that case. This is absent in this case and in fact, there is not even an allegation of collusion, willful misstatement or suppression of facts in the present case. In the instant case, the scrip had been obtained on the strength of a forged Bank Realisation Certificate (BRC). However, while the scrip itself stands vitiated, the Department had clearly been remis in not just issuing the scrip, but in enforcing the same as 'transferable' six months after the issuance thereof. Moreover, the petitioner has admittedly obtained the scrip, bonafide and for valuable consideration and only after an endorsement of transferability was made upon it by the officers. No fraud has been attributed to it, and rightly so, as it had entered into the transaction with the legitimate expectation that the scrip was genuine, with an endorsement/stamp of departmental approval. Thus, by stating that the exporter had obtained the scrip by misrepresentation and making a misstatement before the authority and thereafter proceeding to make a clear distinction between the exporter and the importer, i.e., the noticee in the present case, the officer makes it abundantly clear that the petitioner has no role whatsoever to play in this transaction and was an innocent and bonafide bystander/ victim in the proceedings. Petition allowed.
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