TMI Blog2011 (3) TMI 1370X X X X Extracts X X X X X X X X Extracts X X X X ..... ke care as envisaged under sub-rule(2) of Rule 7 of the Cenvat Credit Rules, situation would have been different, Petitions therefore, fail. Same are dismissed - 16269 of 2010, 814 of 2011 and 16270-16271 & 16304 of 2010, - - - Dated:- 31-3-2011 - Akil Kureshi and Sonia Gokani, JJ. Shri R.J. Oza, for the Petitioner. S/Shri Paresh M. Dave and P.R. Nanavati, for the Respondent. [Judgment per : Akil Kureshi, J. (Oral)]. These petitions filed by the Commissioner of Central Excise, Surat raise similar questions of law and facts. They are therefore, being heard together and disposed of by this common order. In all material aspects since facts are common, for the sake of convenience, we may note such facts as emerging from record of Special Civil Application No. 16269/2010. 2. Respondent M/s. Roman Overseas is an exporter. It had purchased certain materials for its manufacturing activity for the purpose of export from one M/s. Unique Exports. Necessary documents and invoices etc. were found to be in order at the relevant time when respondent M/s. Roman Overseas made such purchases. Significantly, such documents revealed that the goods supplied by M/s Unique Exports ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voices issued by the non-existing units and passed on such Cenvat credit vide invoice No. 07 to 12 all dtd. 5-5-04 for claiming the Rebate claim. Therefore, the whole credit circulated by the non-existing firm which have been declared bogus and the manufacturer of the goods have passed on such inadmissible Cenvat credit to the Exporter for availing the Rebate claim shall be inadmissible. In addition to above conclusions the Competent Authority also relied on Rule 9(3) of the Cenvat Credit Rules, 2004 which requires the manufacturer or producer taking cenvat credit on inputs or capital goods to take all reasonable steps to verify that such goods or inputs are such on which appropriate duty of excise has been paid. Before the competent authority, though respondent M/s. Roman Overseas denied any involvement in such fraud and claimed to be bona fide purchaser, did not dispute that M/s. Unique Exports had not paid duty at the time of clearance of goods. On behalf of respondent M/s. Roman Overseas, it was contended that department is at liberty to proceed against suppliers but not against M/s. Roman Overseas. One more significant aspect that emerges from the order in original is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. 47 (Bom.), wherein Bombay High Court found that all the petitioners had obtained licenses for valuable consideration without any notice of the fraud alleged to have been committed by the original license holders. In that background, it was observed that concept that fraud vitiates subsequent transactions would not apply. The Court allowed exemption of duty on goods imported. (2) In Tax Appeal No. 1263/2006 dated 27-1-2006 wherein the Division Bench of this Court was considering the effect of purchase of advance license under DEEC scheme, which was found to have been obtained on forged or false export documents before DGFT, the Bench confirmed the view of the tribunal holding that eventual purchaser cannot be denied the benefits, making following observations : 15. The aforesaid decisions would apply with full force to the facts of the present case, inasmuch as the endorsement of transferability had been made by the licensing authority. It is not the case of the licensing authority that the endorsement was fraudulently obtained, nor has the licensing authority taken any steps to cancel the said licence. In the circumstances, the Customs authorities could not have refused to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the goods were duty paid. (7) In fact, the Commissioner (Appeals) as well as Government both have on facts come to the conclusion that respondent M/s. Roman Overseas had taken all necessary care. 6. On basis of above facts emerging on record, we have to decide whether Commissioner (Appeals) as well as Government committed any error in holding that respondent M/s. Roman Overseas is entitled to claim rebate. 7. Rebates, in case as present, are governed by Rule 18 of the Central Excise Rules which reads as under : 18. Rebate of duty.- Where any goods are exported, the Central Government may, by notification, grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification. 8. Additionally, such rebates are governed by conditions laid down in the notifications issued by the Government of India from time to time. In the present case, Notification No. 19/2004 would be relevant which lays down conditions for claiming such rebates. Relevant condition is condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deal with the judgements cited by the counsel for the department (1) Reliance was placed on decision in case of New India Assurance Co. Shimla v. Kamla and Others reported in (2001) 4 Supreme Court Cases 342. In that case a driving license upon its expiry was presented for renewal Authorities unmindful of the defects, renewed the same. The Insurance claim repudiated the claim citing the reason that the original license was forged. It was contended that even if previously license may have been forged, upon renewal would be rendered valid. It was in this background that Supreme Court observed that What was originally a forgery would remain null and void forever and it would not acquire legal validity at any time by whatever process of sanctification subsequently done on it. Forgery is antithesis to legality and law cannot afford to validate a forgery. (2) Reliance was placed on decision of Punjab and Haryana High Court in case of Golden Tools International v. Joint DGFT, Ludhiana reported in 2006 (199) E.L.T. 213 (P H). It was however, a case where the petitioners themselves had imported duty free item on the basis of DEPB allowance which was found to have been fraud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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