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2016 (11) TMI 753 - CESTAT MUMBAI

2016 (11) TMI 753 - CESTAT MUMBAI - TMI - DEPB scrip - fraudulent availment of DEPB scrip on the strength of forged shipping bills and BRCs - Held that: - M/s. Sun Chemicals has purchased the DEPB scrips from market. The said DEPB scrips were obtained by submitting forged shipping bills and BRCs to the office of DGFT by Shri R.C. Jain. Appellants have strongly relied on the decision of the Tribunal in the case of Sumit Wool Processors (2015 (10) TMI 329 - CESTAT MUMBAI). On the other hand, reven .....

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scrips was obtained as a result of racket of forgery of export documents which is not so in the case of Sumit Wool Processors. In the instant case, we find that the DEPB scrips have been obtained by forging the shipping bill and BRC and therefore, the decision of Sumit Wool Processors can be distinguished on that count. We find that in identical circumstances where DEPB scrips purchased by the importer appellants were obtained by using forged shipping bills/BRCs, the recovery of duty was upheld .....

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ping bill before the DGFT and obtaining the DEPB scrips from DGFT. Ld. counsel for Shri R.C. Jain has relied on the decision of the Hon'ble High Court of Gujarat in the case of Shah Alloys [2010 (3) TMI 781 - GUJARAT HIGH COURT] where it was held that - penalty against Shri R.C. Jain cannot be sustained. - Appeal allowed - decided in favor of appellant. - C/1120 & 1171/04 - Dated:- 17-10-2016 - Shri M.V. Ravindran, Member (Judicial) And Shri Raju, Member (Technical) Shri D.H. Nadkarni, Advoc .....

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. The goods imported by M/s. Sun Chemicals was confiscated and ₹ 3,92,000/- was imposed in lieu of confiscation. Penalty of ₹ 6,49,929/- was imposed under Section 112A of the Customs Act, 1962. Penalty of ₹ 3,14,000/- was imposed on Shri R.C. Jain under Section 112A of Customs Act. Penalty was also imposed on other people involved in the transaction. Appeals have been filed by M/s. Sun Chemicals and Shri R.C. Jain against the aforesaid order. 2. Ld. counsel for M/s. Sun Chemica .....

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2015-TIOL-2090-CESTAT-MUM wherein under similar circumstances benefit was granted to the purchasers of DEPB scrip. Ld. counsel also relied on the decision of the Hon'ble High Court of Punjab & Haryana in the case of Leader Valves Ltd. 2007 (218) 349 (P&H) confirmed by the Supreme Court as reported in 2008 (227) ELT A29(SC). 2.1. Ld. counsel argued that they were not involved in any fraud and therefore they cannot be held liable for any penalty under the Customs Act. Ld. counsel reli .....

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e goods were unconditionally released and therefore no confiscation could be ordered in view of the decision of the Hon'ble High Court of Bombay in CCE vs. Finesse Creation Inc. 2009 (248) ELT 122 which was upheld by apex court as reported in 2010 (255) ELT A120 (SC). 3. Ld. counsel for Shri R.C. Jain argued that they have not committed any fraud under the Customs Act if any forgery or fraud has been committed the same has been committed before DGFT and not before customs. In this regard, he .....

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ipping bills and BRCs as in the instant case. He further argued that the decision of Sumit Wool Processors was cited before the Kolkata bench in Eastern Silk Industries Ltd. 2016-TIOL-457-CESTAT dated 22.12.2015 and in that case this decision of Sumit Wool Processors was held to be per incurim as it had overlooked various Supreme Court decisions. Ld. AR further argued that the case of Alpha Chemie is of no precedent value because submissions of AR on behalf of the revenue has not been recorded i .....

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y the apex court in 2012 (281) ELT A106(SC). Ld. AR also relied on the decision of the Tribunal in the case of Apar Ltd. 2012 (276) ELT 534 wherein Tribunal had held that an importer is not entitled to any benefit on the basis of DEPB scrips which were obtained by forged documents. In the said case also the appellant had purchased DEPB scrips from the market. 4.1. Ld. AR further relied on the case of J.M. Tex Pvt. Ltd. of the Bombay bench in order no. A/2156-2160/13/CSTB/C-I dated 17.10.2003 had .....

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f the Hon'ble High Court of Bombay in the case of Taparia Overseas Pvt. Ltd. 2003 (161) ELT 47. Ld. counsel further argued that if someone has sold DEPB scrips which has been obtained on the basis of forged documents, the remedy with the importer is to pursue the seller. For this argument, he relied on the decision of the Hon'ble High Court of Kerala in the case of Neptune Trade Link 2012 (284) ELT 29 (Ker). He further argued that extended period can be rightly invoked in this circumstan .....

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y has upheld penalty on one Hiralal Jain who was the real master mind in procuring and using forged licence. Ld. AR also relied on the decision in the case of Vijay Bhav 2014 (313) ELT 506 to assert that penalty can be imposed on the person who has obtained licence by forging documents. 6. We have gone through rival submissions. We find that in the instant case M/s. Sun Chemicals has purchased the DEPB scrips from market. The said DEPB scrips were obtained by submitting forged shipping bills and .....

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Wool Processors has considered the decision of Dow Agrosciences and differentiated primarily on the ground that in the case of Dow Agrosciences the DEPB scrips was obtained as a result of racket of forgery of export documents which is not so in the case of Sumit Wool Processors. In the instant case, we find that the DEPB scrips have been obtained by forging the shipping bill and BRC and therefore, the decision of Sumit Wool Processors can be distinguished on that count. We find that in identica .....

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case law cited by ld. AR are in identical circumstances and squarly applicable in the case. Ld. counsel for the appellant has relied on the decision of Tribunal in Alpha Chemi (supra). Ld. AR has informed that ROM has been filed against the said decision and the said ROM is yet to be disposed of. Therefore, no reliance can be placed on the said decision. We further find that Tribunal in Eastern Silk Inds. Ltd. has been examined the decision of the Tribunal in the case of Sumit Wool Processors ( .....

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he decision of the Kolkata High Court in ICI India Ltd. 2005 (184) ELT 339. The said case was approved by the Hon'ble apex court in 2005 (187) ELT A31(SC). 6.1. In view of the above facts, we find that the decision of the Tribunal in the case of Sumit Wool Processors cannot be applied as the facts in the instant case. However the decision of the Tribunal in the case of V.M. Tex P. Ltd, Dow Agrosciences and Apar Ltd. are in identical situation and therefore, relying on these decisions, the ap .....

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ainst the respondent is as regards his alleged involvement in the transfer of forged DEPB licenses. The transfer of a DEPB licence precedes the clearance of goods on the basis of the same. Insofar as the customs authorities are concerned they come into the picture at the stage of clearance of goods. Insofar as transfer of DEPB licences and the validity or otherwise of the same, it is the DGFT authorities who are the concerned authorities. Forgery of DEPB licence may entail prosecution under the .....

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fake licences, they can take action against those involved in clearance of the goods under cover of the fake licence. 7.1. Similarly, in the case of Shah Alloys the Hon'ble High Court has observed as follows:- 6.1 In the facts of the present case, it is the case of appellant-revenue that the respondent has imported furnace Oil by making a wilful mis-statement before the Licensing Authority on the basis of a certificate issued by a Chartered Engineer which led to the issuance of EPCG licence .....

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