TMI Blog2005 (10) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... fraudulent export of Auto Parts viz. Crank Shaft for high speed compressors by misdeclaring the same as Timing Shaft for Mercedes Truck and had availed of higher export incentives in the shape of Duty Entitlement Pass Book. The exporter had obtained DEPB licences on the strength of forged documents. The DGFT issued transferable DEPB Scrips amounting to Rs. 56,96,174/- in favour of the exporter, which were got registered through CFS (OWPL), Ludhiana. Since exporter had obtained these DEPB Scrips by substituting/forging documents to avail of higher export benefits, the Jt. DGFT was requested to cancel them and they came to be cancelled by the Order-in-Original issued on 28-11-2001 by the concerned authority. The exporter had in the meanwhile transferred DEPB Scrips to the appellants, which were utilized by the appellants to discharge the import duty liability in respect of the goods imported vide Bill of Entry No. 484, dated 26-9-2000. According to the Revenue, since the DEPB Scrips were cancelled ab initio by the Jt. DGFT, Ludhiana, they were no longer legally valid documents to discharge duty liability on imported goods. According to the Revenue, in terms of Notification No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mporter of the goods on the strength of the DEPB scrips purchased by the importer from such exporter. The Commissioner, therefore, passed the impugned order against the noticees including the present appellants. 3. The learned Counsel appearing for the appellants contended that the extended period of limitation could never have been invoked against the appellants because, the fraud committed by the exporter could not have been attributed to the importer. There was no allegation that the appellants who were importing the goods in collusion with the exporter or that they had made mis-representation or committed fraud by availing the benefit of scrips purchased by them from the exporter. It was also argued that the credit of import duty was already availed of by the appellants in September, 2000 while the DEBP licence was cancelled by the authority as on 28-11-2001 It was submitted that such a cancellation could not have any retrospective effect and the finding given by the Commissioner that the DEPB licence on being cancelled became void ab initio, was erroneous. He submitted that order of cancellation of licence was made nearly one year after the import was made and it could, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the date of the import, the goods were covered by a valid import licence. (c) The decision of this Tribunal in K. Uttamlal (Exports) Pvt. Ltd. v. Union of India reported in 1990 (46) E.L.T. 527 (Bom.) was cited for the proposition that fraud has to be established and even if it is established, a licence obtained by fraud is voidable and is good till avoided. The Tribunal followed the ratio of the decision in the case of East India Commercial Co. Ltd. (supra). (d) The decision of the Supreme Court in Collector of Customs, Bombay v. Sneha Sales Corporation reported in 2000 (121) E.L.T. 577 (S.C.), was cited to point out that in paragraph 4 of the judgment, the Supreme Court rejected the contention that since the licence had been cancelled by the Dy. Chief Controller of Imports and Exports, ab initio, the Collector was right in holding that there was no valid authorisation for the import of the goods and that the goods were imported in contravention of the provisions of the Import (Control) Order, 1955 read with Imports and Exports (Control) Act, 1947. The Supreme Court relied upon the ratio of the decision in East India Commercial Co. Ltd. (supra), holding in Paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal principle, which is enshrined in Section 17 of the Limitation Act that fraud nullifies everything. 5. It is clear from the record that the exporter, M/s. Tiwari Brothers (who has not challenged the impugned order), was engaged in fraudulent export of auto parts and availed of higher export incentives in the shape of Duty Entitlement Pass Book, and had obtained DEPB licences on the basis of fake documents. The concerned authority had issued transferable DEPB scrips amounting to Rs. 56,96,174/- to the exporter. Some of the scrips were transferred to the present appellants for a total value of Rs. 21,35,333/-, as stated in the show cause notice. It is not disputed before us that the benefit was fraudulently obtained by the exporter. It is, however, contended that importer cannot be visited with the consequences of fraud that may have been committed by the exporter. This contention was raised in order to emphasise that extended period of limitation could not have been invoked against the appellants on the basis of the fraud committed by the exporter. 6. Section 28 of the said Act contemplates issuance of notice on the person chargeable with duty which has not been levied requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw will be frustrated and fraud will be encouraged if the stand suggested by the learned Counsel for the appellants is to be accepted. Such a course will subject the provision to frequent abuse. There is, therefore, no substance, prima facie, in the contention that the extended period of limitation could not have been invoked in this case. 7. We may also note here that the order made by the Jt. DGFT under Section 9 of the Foreign Trade (Development and Regulation) Act, 1992 was never challenged by the appellant, who was clearly the person aggrieved, though an appeal under Section 15 thereof could have been filed against such an order by any person aggrieved. The cancellation of licence under Section 9 on the ground of fraud became final. No legal benefit accrued to the exporter on the basis of fraudulently obtained duty-credit. The courts cannot recognise validity of a licence which has been cancelled on the ground of its having been fraudulently obtained, for any purpose. The decision of the Supreme Court in East India Commercial Co. Ltd., on which reliance was placed was in the context of imports made during the currency of the import licence and has no bearing on the question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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