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2018 (1) TMI 775

Held that: - There is no allegation that the appellants have colluded in any manner with Exim International in the fraud committed by the latter for obtaining the DEPB scrips. The appellants have purchased the scrips in a bonafide manner and with bonafide belief that they were genuine and valid - similar issue decided in the case of CC, Amritsar Vs. Vallabh Design Products [2007 (4) TMI 274 - PUNJAB & HARYANA HIGH COURT], where it was held that in the case of DEPB scrips obtained by fraud and forgery and where the transferee of these scrips are not a party to the fraud and were obtained on payment of full price from the open market on bonafide belief, the transferee is not liable to duty, penalty and interest - appeal allowed - decided in f .....

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B scrips were cancelled after two years after the fraud was committed by the exporter. b) Ld. Advocate relied on the case of Binani Cement Ltd. Vs. CC, Kandla 2010 (259) ELT 247 (Tri. Ahmd.). c) She also placed reliance on the following case laws:- i) CC Vs. Leader Valves Ltd. - 2007 (218) ELT 349 (P&H) ii) CC, Amritsar Vs. Vallabh Design Products - 2016 (341) ELT A222 (S.C). iii) DCW Ltd. Vs. CC, Tuticorin - 2009 (241) ELT 421 (Tri.-Chen.) iv) CC Vs. Binani Cement Ltd. - 2009 (238)ELT 33 (Guj.) v) India Acrylics Ltd. Vs. CC, Kandla 2015 (325) ELT 753 (Tri.-Ahmd.) affirmed by the Hon ble Gujarat High Court 2016 (336) ELT 474 Guj.) v) CC, Amritsar Vs. Gopi Chand Krishnan Kumar Bhatia 2013 (295) ELT 739 (Tri.-Del.) 3. On the other hand, L .....

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reproduced as under:- 9. After hearing learned Counsel for the parties, we are of the considered view that this appeal is devoid of any merit. The assessee-respondent admittedly is not a party to the fraud. There are categorical finding that they had purchased DEPB from the open market in the bona fide belief of its being genuine. They had paid full price and accordingly have availed the benefit. Merely because at a later stage, the DEPB has been found to be fabricated and fake on the basis of BCER the assessee-respondent could not be deprived of the benefits which were legitimately available to them. It is also worth noticing that the assessee-respondent was never issued any show cause notice before cancelling the DEPB which was obtained b .....

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JCDR is inconsequential. Yet another case law cited by the learned counsel is on the question whether the rights of a bona fide purchaser of DEPB licence could be affected by its subsequent cancellation. Here again, the answer is against the Revenue and in favour of the importer vide Hico Enterprises (supra). In this context, it needs mention that M/s. Binani Cement Ltd. acted upon the DEPB licences believing that they were legally valid documents under which they could claim benefit. The Revenue also acted upon the transaction with the same belief. I am of the considered view that it is not open to the Revenue to say that the DEPB licences used by the importer were not legally valid documents at the time of the imports. 5.3 We further fin .....

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