TMI Blog2014 (5) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue has to be allowed so far as recovery of duty is concerned. No exports, on the basis of which DEPB scrips were issued, had actually taken place and there was no entitlement to DEPB benefit even to the party to which the DEPB scrip was originally issued on the basis of forged documents. The Revenue, therefore, cannot be made to suffer the consequence of a transaction where no exports actually took place and duty entitlement was secured on the basis of forged documents - Decided partly in favour of assessee. - Appeal No. C/687/2007-SM - FINAL ORDER NO.58531/2013 - Dated:- 10-12-2013 - Mr. Manmohan Singh, J. For the Appellant : Shri B.B. Sharma, DR For the Respondent : Shri Vikrant Kckria, Advocate JUDGEMENT PER: MANMOHAN SINGH; This matter is coming up before this Tribunal for the second time in pursuance to the order of the Hon'ble High Court of Punjab Haryana dated 29.7.2013. 2. The brief facts of the case are as under: The brief facts of the appeal relevant for its disposal are as under: The respondents had purchased DEPB scrips to avail exemption from payment of customs duty on consignment imported by them under N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not in dispute that furnishing of bank certificate of exports and realization of export proceeds was a pre-requisite for issue of DEPB. Admitedly, the bank certificates furnished were fabricated documents. The observations of the former Lord Chief Justice of England, Sir Edward Coke, more than three centuries ago, that fraud avoids all judicial acts, ecclesiastical or temporal, noticed by the Supreme Court in S.P. Chengalvaraya Naidu v. Jagannath, AIR 1994 SC 853, are apt for the instant case. The Apex Court has also observed that an act of deliberate deception with the design of securing something by taking unfair advantage of another is a fraud . Fraud is a cheating intended to get an advantage. A person whose case is based on falsehood has no right to seek relief in equity. Recently in Commissioner of Customs v. Essar Oil Ltd. - 2004 (172) E.L.T. 433 (S.C.) = (2004) 11 SCC 364, their Lordships of the Supreme Court have observed that it is a fraud in law if a party makes representations, which he knows to be false, and injury enures therefrom although the motive from which the representations proceeded may not have been bad. Therefore, at the outset, we reject the stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants further contended that the extended period of limitation could be invoked in cases where the DEPB licences have been found to be forged and fake. Such documents are null and void ab initio. 6. On the other hand, the assessee contested that the extended period of limitation is not invokable against the bonafide purchase of DEPB which has been cancelled on subsequent date. They referred to the provisions of section 28 which reads as under:- Provided that where any duty has not been levied or has been short-levied or the interest has not been charged or has been part-paid or the duty or interest has been erroneously refunded by reason of collusion or any willful mis-statement or suppression of facts by the importer or the exporter or the agent or the exployee of the importer or the exporter, provisions of this sub-section shal heave effect as if four the words one year and six months , the words five years were substituted. 7. Ld. Advocate has relied upon the judgment of Hon ble Punjab Haryana High Court in the case of CC Vs. Leader Valves Ltd.-2007 (218) ELT 349 (P H) which has been upheld by the Supreme Court reported as 2008 (227) ELT A-29 (SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid by the Respondents by utilising DEPB scrips, I find that the Commissioner (Appeals) has dropped the demand relying upon the judgment of the Hon'ble Punjab Haryana High Court in the matter of Commissioner of Customs v. Leader Valves Ltd. as reported in 2007 (218) ELT 349 (P H) which was later maintained in Commissioner v. Leader Valves Ltd. - 2008 (227) ELT A 29 (SC). 12. I find that the issue of demand of duty under identical circumstances had come up before the Hon'ble Punjab Haryana High Court in the case of Friends Trading Company v. CC, Jalandhar - 2011(267) ELT 33 (P H) in the context of the decision of this Tribunal in Friends Trading Company v. CC, Jalandhar - 2011(267) ELT 57 (Tri. - Delhi.). The Tribunal observed as under on the question of liability of the transferee to duty and interest: 8. Evidence gathered by Revenue unambiguously proved that the DEPB scrips used by the appellant for discharge of customs duty were fraudulently obtained by the transferor and were transferred to the appellant. The appellant did not make any enquiry from JDGFT to ascertain genuineness of the same. It is established principle of law that fraud and justice are sworn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t still then one would be liable to pay the duty and interest and for other statutory consequences which one cannot avoid. This decision of Hon ble Calcutta High Court was affirmed by Apex Court in appeal by ICI India Ltd. as reported in 2005 (187) E.L.T. A31 (S.C.). 13. The Tribunal took into account the ratio of the judgment of the Hon'ble Punjab Haryana High Court to arrive at the conclusion that the benefit of the High Court judgment in the case of CC v. Leader Valves Ltd. - 2007 (218) ELT 349 (P H) which has been approved by Hon ble Supreme Court as reported in CC v. Leader Valves Ltd. - 2008 (227) E.L.T. A29 (S.C.) would not be available in the absence of proof of bona fide on the part of the transferee. This decision of the Tribunal in Friends Trading was affirmed by the Hon'ble Punjab Haryana High Court as reported in 2011 (267) ELT 33 (P H). 14. Further, identical issue was also dealt with by the Tribunal in the case of Friends Trading Company v. CC, Amritsar - 2006 (202) E.L.T. 611 (Tri. - Del.) which was affirmed by the Hon'ble Punjab Haryana High Court as reported in 2010 (254) E.L.T. 652 (P H) and further maintained by the Hon'ble Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the present case. 7.Further, we find that the Hon ble Supreme Court in the case of New India Insurance Co. (supra) has held as under:- The observation of the Division Bench of the Punjab and Haryana High Court in National Insurance Co. Ltd. v. Sucha Singh (supra) that renewal of a document which purports to be a driving licence, will robe even a forged document with validity on account of Section 15 of the Act, propounds a very dangerous proposition. If that proposition is allowed to stand as a legal principle, it may, no doubt, thrill counterfeiters the world over as they would be encouraged to manufacture fake documents in a legion. 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. 7. While affirming the order the decision of the Tribunal the Hon'ble Punjab Haryana High Court - 2010 (254) E.L.T. 652 (P H) made the following observations: 3.We examined an identical issue in our recent order dated 1-9-2007 in CUSAP No. 27 of 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The Tribunal noticed that the firm with whom the appellant entered into the transaction was not traceable. The appellant itself had come to the conclusion that the documents were forged. In these circumstances, if further opportunity has been given to the appellant on its own asking and for its own benefit, we do not find any error in the course adopted by the Tribunal so as to give rise to substantial question of law sought to be raised. 4. We also made a reference to? judgments of the Hon ble Supreme Court in S.P. Chengalvaraya Naidu v. Jagannath, AIR 1994 SC 853 and Commissioner of Customs v. Essar Oil Ltd. - 2004 (172) E.L.T. 433 (S.C.) = (2004) 11 SCC 364 and judgments of this Court in Golden Tools International v. Joint DGFT, Ludhiana - 2006 (199) E.L.T. 213 and The Commissioner of Customs, Commissionerate, The Mall, Amritsar v. M/s. Parker Industries, Jalandhar - 2007 (207) E.L.T. 658. 5. In view of above, we do not find any ground to interfere with the order upholding demand of duty on goods in respect of which exemption had been availed of on the basis of DEPB Scrips obtained against forged documents. This judgment was maintained by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Even if case of criminal liability or penalty may stand on different footing, purchaser or successor of fraudulently obtained DEPB stands in the same position as his predecessor. If the extended period of limitation could be invoked against the original holder of fraudulent or forged DEPB, the same could be invoked against successor or purchaser. The judgments relied upon on behalf of the petitioner are distinguishable. The matter is covered by view taken by this Court earlier which has been followed by the Tribunal. Thus, we are unable to hold that any substantial question of law arises. 17. The ratio of the aforesaid judgment is squarely applicable in the present circumstances. I have also perused other judgements quoted by Revenue and find that contents of these judgments elucidate the principles laid down in above judgement Accordingly, I hold that the extended period of limitation has correctly been invoked in the present case. Issue No. 3 18. On the question of imposition of redemption fine the Respondents have pleaded that since the goods were neither available physically nor was any Bond executed, there was no ground for imposition of redemption fine. I find force ..... X X X X Extracts X X X X X X X X Extracts X X X X
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