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C Pinto, RG Awasthi, KN Desai And Apar Industries Ltd Versus Commissioner of Customs (Export Promotion) , Mumbai

2017 (4) TMI 19 - CESTAT MUMBAI

Duty exemption scrips - appellants claimed to have been legally purchased but which, nevertheless, are established as having been obtained by the transferors through fraud - Held that: - Propriety demands that contrarian views having been placed on record, we must take recourse to time-tested institutional mechanism to resolve the predicament. In our view, a uniform and consistent approach is mandated even though instinctive sympathies, as human beings, may lie with an innocent party in a busine .....

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al) And Shri C J Mathew, Member (Technical) Shri D B Shroff, Sr. Advocate, for the appellants Shri M K Sarangi, Jt. Commissioner (AR), for the respondent Per: C J Mathew: The primary issue for determination in this appeal filed by M/s Apar Industries Limited, and three of its employees, challenging the levy of duties of customs of ₹ 71,05,031/-, confiscation (or fine in lieu thereof of ₹ 25,00,000/-) and penalties of ₹ 25,00,000/- is the culpability of the imports and importers .....

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and 844 dated 23/10/1998 had been assessed to 'nil' basic customs duty in terms of exemption notification no. 34/97-Cus dated 7th April 1997. It has been established that, without executing any export orders, some individuals had floated bogus firms to secure scrips by furnishing forged shipping bills and bank realisation certificates to the licencing authority. These scrips having been nullified thereafter ab initio by the licencing authority, the original authority rendered a finding t .....

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Alpha Chemie Sapthagiri v. Commissioner of Customs, Mumbai [2016-TIOL-2504-CESTAT-MUM], Pee Jay International v. Commissioner of Customs [2016-TIOL-2136-HC-P&H-CUS], Taparia Overseas (P) Ltd v. Union of India [2003 (2) Mh.LJ 532] and Jimit Diamonds v. Commissioner of Customs (II), Mumbai [Order no. A/93729-93734/16/CB date 8th November 2016]. 4. Learned Authorized Representative was at pains to point out the specific findings in the impugned order such as lower than prevalent premium paid fo .....

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, JM Tex P Ltd v. Commissioner of Customs (Export Promotion) [Order no. A/2156-2160/13/CSTB/Cl dated 17th October 2013] and Sun Chemicals & Anr v. Commissioner of Customs, Mumbai [Order no. A/93181-181/16/CB dated 17th October 2016]. 5. Having heard the rival contentions and perused the records, we find ourselves placed in a dilemma. Based on precedent decisions, the constituents of this bench are on record that duty liability and detriment cannot be visited upon the holder of a scrip in due .....

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rcing of beneficial instruments. This was sought to be distinguished by Learned Authorized Representative who pointed out that an import licence, relevant merely to a policy of quantitative restrictions, cannot stand on the same footing as an instrument that deprives the public exchequer of legislatively sanctioned source of revenue. We cannot but note that the lack of diligent support from both sides of the bar has led to decisions supra of ours that are not conformity with earlier decisions of .....

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inal acquirer, as an abundant caution, to avoid evil consequence of fraudulently obtained scrips, could have safeguarded its interest causing enquiry from JDGFT as to genuineness of the scrips. But that was not done. The appellant failed to acquire no title over the scrips but became beneficiary of ill got scrips. Notificational benefit was availed at the cost of public exchequer which is required to be surrendered for the undue gain made. Bona fides was not established by the appellant failing .....

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resulting in wrongful availment of benefit of import duty and loss to public revenue, extended period of limitation could not be invoked in absence of finding of suppression or mis-statement by the importer who is successor of holder of such document. Distinction must be made between a document which is non-existent and fraudulent and a document which has not been genuinely obtained by complying with the requisite conditions. 9. We are unable to accept the submission. Finding recorded by the Tri .....

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ch benefit is taken is not washed of. Fraud or suppression continues if document is not genuine. Any other interpretation will defeat the intendment of the proviso to Section 28 and will enable fraud to be perpetuated without any remedy. 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 o .....

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