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M/s Indian Acrylics Ltd and Others Versus Commissioner of Customs, Kandla

2015 (9) TMI 1316 - CESTAT AHMEDABAD

Duty Entitlement Pass Book - Use of forged DEPB Extended period of limitation it was contended that, they are bonafide purchaser of the DEPB scrips from the open market, as per the provisions of the Policy and payment was made by cheques. There is no material available of fraud, collusion etc against the Importer and therefore, the extended period of limitation cannot be invoked. - Held that:- No dispute that, appellant availed credit on basis of said DEPB scrip, which was issued by Customs .....

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y Therefore, demand of duty along with interest and penalty being barred by limitation, hereby set aside Decided in favour of Assesse. - Appeal No.C/296,298,691,692/2007; C/12315/2013 - Order No. A/10349-10353/2015 - Dated:- 22-4-2015 - Mr. P.K. Das and Mr. H.K. Thakur, JJ. For The Appellant: Shri Rakesh Jain, Advocate For The Respondent: Shri Jitendra Nair, Authorised Representative Per: P.K. Das 1. These appeals are arising out of a common order and therefore, all are taken up together for .....

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Limited (in short the exporter ) against their export. The importer imported Chemicals through Kandla Port on the basis of the said DEPB scrips, without payment of duty. In 2004, it was found that the exporter obtained the transferable DEPB scrips fraudulently by ante-dating the shipping Bill No. 2216 dated 30.03.2000, pertaining to cargo against shipping bill, which was received in CFS on 04.04.2000, when the value applicable cab to grant of DEPB for export was reduced. The said DEPB scrip was .....

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mand of duty of ₹ 12,35,362.00 alongwith interest and imposed penalty of equal amount of duty on the importer. It has imposed penalty of ₹ 12,35,362.00 and ₹ 5,00,000.00 on the exporter (M/s. Supreme Casting Limited) and its Director Shri Gurkirpal Singh respectively, and penalty of ₹ 25,000.00 each on M/s IAL Shipping Agency, Shri D.R. Ahuja (Superintendent of Central Excise), Shri M.P. Singh (Inspector of Central Excise) and Shri Vijay Madaam and Shri Quimti Lal Sharma .....

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n the various decisions as under: a) Commissioner of Customs, Bombay Vs M/s Sneha Sales Corporation - 2000 (121) ELT 577 (SC) b) Commissioner of Customs, Amritsar Vs M/s Patiala Castings Pvt. Ltd. - 2012 (283) ELT 269 (Tri-Del.) C) Commissioner of Cusoms Vs M/s Leader Valves Ltd 2007 (218) ELT 349 (P&H) upheld by Hon ble Supreme Court on merit - 2008 (227) ELT A 29 (SC). 6. He further submits that no penalty should be imposed on the Shri D.R. Ahuja under Section 112 (a) of the Act. It is sub .....

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er of C.Ex., Kanpur 2008 (225) ELT 294 (Tri-Del) b) Khem Singh Lalas Vs Commissioner of Customs, Kandla 2014 (307) ELT 718 (Tri-Ahmd) 7. The learned Authorised Representative for the Revenue strongly relied upon the decision of Hon ble Calcutta High Court in the case of ICI India Ltd Vs Commissioner of Customs (Port), Kolkata - 2005 (184) ELT 329 (Cal.). It is submitted that once it is established that the export documents are forged and the DEPB lincence was cancelled, the entire transaction is .....

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t the exporter and its Director had deliberately manipulated the date of export to avail extra benefit under DEPB scrips. It is also submitted that the CHA has not taken the reasonably steps and the penalty is rightly imposed. 8. After hearing both the sides and on perusal of the records, we find that there is no dispute on the fact that the Importer purchased the DEPB scrips from the open market on 25.08.2000. The Importer imported the Chemicals from Kandla Port without payment of duty in Septe .....

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ngs Limited had manipulated the export documents to facilitate the extra benefit under the DEPB scheme. Accordingly, the DGFT authorities cancelled that licence in November 2004. Thereafter, the Customs authorities issued a Show Cause Notice dt.18.04.2005 proposing demand of duty alongwith interest and to impose penalty on the Importer and to impose penalties on other Appellants. The main contention of the learned Advocate is that the demand is barred by limitation. Sub-section (1) of Section 28 .....

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short-levied or erroneously refunded, or interest payable has not been paid by reason of, collusion; or any wilful mis-statement; or suppression of facts, by the importer or the exporter or the agent or employee of the importer or exporter, the proper officer shall, within five years from the relevant date, serve notice on the person chargeable with duty or interest which has not been levied so. 10. In the present case, we find that the Adjudicating authority had not given any finding that the .....

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nd of duty for the extended period of limitation was confirmed. In the present case, at the time of importation of the goods, the DEPB licence was valid, which was cancelled after about 4 years. The Tribunal in the case of M/s Patiala Castings Pvt. Ltd (supra), in the identical situation, dismissed the appeal filed by the Revenue. It has been observed that there is neither any allegation nor any evidence to show that the Appellant had knowledge about the fraudulent mis-representation of the expo .....

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, DEPB found to be fabricated and taken on the basis of BCER, the assessee could not be deprived of benefit which are legitimately available to them. The decision of Hon ble Punjab & Haryana High Court was upheld by the Hon ble Supreme Court as reported in 2008 (227) ELT A 29 (S.C.) 11. The Revenue strongly relied upon the decision of Hon ble Calcutta High Court in the case of ICI Limited (Supra). In that case, it has been held that the credit available on the strength of a valid DEPB only a .....

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h Court in the case of M/s Prayagraj Dyeing & Printing Mills Pvt. Ltd. Vs UoI - 2013 (290) ELT 61 (Guj.), had distinguished the document void and voidable. The relevant portion of the said decision is reproduced below:- 10. In this connection, we find substance in the contention of Mr. Parikh, the learned senior advocate appearing on behalf of the appellants, that there is a marked distinction between a forged document and a document issued by practising fraud. If it appears that a document .....

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valuable consideration. At this juncture, we may profitably refer to the observations of the Supreme Court made in the case of CCE v. Decent Dyeing Co., reported in 1990 (45) E.L.T. 201 = (1990) 1 SCC 180 wherein, the Supreme Court held that it would be intolerable if the purchasers were required to ascertain whether excise duty had already been paid as they had no means of knowing it. It was further pointed out that duty of excise is primarily a duty levied on a manufacturer or purchaser in re .....

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e of Commissioner of Customs (Preventive) v. Aafloat Textiles (I) P. Ltd. reported in 2009 (235) E.L.T. 587, cannot be supported as Afloat case is one pertaining to a forged document but not in respect to a document otherwise genuine, issued by practising fraud. The facts stated in the case of Afloat indicated that the same was a case of a forged invoice and thus, the principles laid down therein cannot have any application to an invoice which is, otherwise, genuinely issued by a manufacturer re .....

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t the Tribunal, in its judgment, reported in 2006 (205) E.L.T. 747 indicated in paragraph-7 as follows : if that be so, the concept that a fraud vitiates everything would not be applicable to cases where a transaction of transfer of license is for value consideration without notice, arising out of mercantile transactions, governed by common law and not provisions of any statute. .... .... .... .... .... .... 14.7.1 In the case before us, we have already pointed out that the Revenue has not alleg .....

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the Importer imported the goods on the basis of the documents, which were valid at the time of importation and therefore, such document is valid, till it is not set-aside, extended period cannot be invoked. The demand of duty along with interest is not sustainable as barred by limitation. As the demand of duty is not sustainable, imposition of penalty is also not warranted. 12. Regarding the appeal filed by Shri D.R. Ahuja, we find from the Adjudication Order that the Adjudicating authority obs .....

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the Act. There is no evidence that the Appellant was involved in any manner in respect of manipulation of the export documents. We also find that on the identical situation, in the Appellant s own case, the Tribunal set aside the penalty and allowed the appeal filed by the Appellant. The relevant portion of the said decision D.R. Ahuja (supra) is reproduced below:- 6. It appears from the statement of the appellant No. l that he has denied ante-dating of the examination report or out of charge re .....

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of extraneous consideration for their action and for imposition of penalty under Section 114 ibid is set aside. It has been held that the case may be dereliction of duty on the part of the Superintendent of customs, on which penalty cannot be imposed under Section 114 of the Act. In the case of P.N. Ram v. CCE, Kanpur (supra), the Division Bench of the Tribunal held that penalty under Section 114 of the Act is not leviable on Customs Officer for negligence and dereliction of duty without any con .....

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