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2015 (9) TMI 1316 - CESTAT AHMEDABAD

2015 (9) TMI 1316 - CESTAT AHMEDABAD - 2015 (325) E.L.T. 753 (Tri. - Ahmd.) - 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, appe .....

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eir gain and therefore, it would not come within ambit of imposition of penalty 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 .....

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08.2000 from open market, which was originally issued to M/s. Supreme Castings 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 a .....

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ugned Adjudication order, the Commissioner of Customs, Kandla confirmed the demand 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 ( .....

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therefore, the extended period of limitation cannot be invoked. He relied upon 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 .....

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He also relied upon the various decisions as under:- a) P.N. Ram Vs Commissioner 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 docum .....

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xporter and its Director are justified. It is established from the records that 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 Imp .....

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ana. 9. During investigation, it was found that the exporter M/s Supreme Castings 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 Advo .....

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ion 28 of the Act provides that where any duty has not been levied or has been 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 cas .....

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and interest and other statutory consequences which cannot avoid and the demand 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 t .....

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ad paid full price and availed the benefit and merely because at a later stage, 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 .....

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is ground, the DGFT cancelled the DEPB scrips in 2004. The Hon ble Gujarat High 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 docu .....

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ent is good one and can even give a good title to the holder in due course for 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 .....

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f cases. Similarly, reliance over the judgment of the Supreme Court in the case 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 applic .....

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ense should not be made liable. It may not be out of place to mention here that 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 .....

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o the facts of the present case. In the present case, there is no dispute that 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. .....

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d not come within the ambit of imposition of penalty under Section 112 (a) of 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. .....

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harged to have involved themselves in fraudulent export and there is no proof 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 levi .....

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