TMI Blog2008 (10) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of 62 (twelve) consignments imported under forged and fake DEPB No. 02602422, 02602426, 02602432, 02602393, 02602396, 02602398 dated 1-2-99 and interest was payable on duty at the appropriate rate. (b) Aggregate value of goods of Rs. 5,90,02,250/- was confiscated under Section 111(o) of the Customs Act, 1962. However, such goods not being available for confiscation, redemption fine was not imposed. (c) Penalty of Rs. 25,00,000/- was imposed on the Appellant under Section 112(a) of the Customs Act, 1962. The impugned order was passed without prejudice to the action that may arise against the persons, companies or goods not covered by the subject show-cause notice. 2. Ld. Counsel, Shri Vishwanath Shukla appearing for the Appellant argued that: (A) The demands are time barred and hence the impugned order is liable to be set aside. (B) Principles of natural justice have been violated as the relied upon documents were not made available and no cross-examination of the Customs authorities was granted. (C) There is no evidence on record to prove that the Appellants acted in collusion with non-existent firms and other unscrupulous persons. (D) The Appellants have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stern Spinning Mills Industries Ltd., M/s. Ispat Alloys Ltd. and M/s. Hindulco Industries Ltd. while the Appellant has claimed to have purchased from market for discharge of duty liability of Rs. 2,64,11,575/-. 4.3 Investigation by Revenue revealed that the DEPB Scrips in question were not at all issued in favour of the above named parties. Transfer letters, fetter heads and the bank account numbers used to show transfer of the Scrips to the Appellant were bogus. Revenue had made extensive enquiry with all those who were in the chain of the deal under Section 108 of the Customs Act, 1962. The DEPB scrips claimed by Appellant to be genuine were proved to be never in existence as revealed by enquiry and that remained un-controverted by Appellant. No enquiry was made by the Appellant any time with DGFT Authority to find truthfulness of the DEPB scrips although payment were stated to have been made through Deutsche Bank, Kolkata drawing cheques in favour of National Engineering Works, M/s. Impex Corporation, M S.R.S. Traders, M/s. James Exterprise and M/s. Classic International who issued debit notes. These intermediaries were found to be fictitious. The ld. Adjudicating Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut forward, on the basis of the finding of the facts without challenging the same, is about the effect of absence of collusion on the part of the appellant, as pointed out earlier, in relation to the availability of the credit under the forged DEPB scrips. But in the decision in United India Insurance (supra), the forgery related to the driving licence of the driver engaged by the insured, but the Insurance Policy was not found to be forged. The question would be different if the document itself, on the strength whereof credit is claimed is forged. In that event, the same cannot be equated with merely an irregularity in the licence of the driver driving the vehicle in relation to the liability of the insurer in relation to a valid insurance policy under the motor Vehicles Act providing for compulsory insurance to secure third party interest. In this case, the document itself having been found to be forged whether there was collusion or fraud on the part of the appellant in the issue of the DEPB licences/scrips becomes absolutely immaterial and irrelevant since no credit can be derived from a forged DEPB. The credit is made available on the strength of a valid DEPB. If the DEPB is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner has imposed penalty under Section 112(a) of the Customs Act 1962. The said Clause (a) mandates that any omission or commission calling for confiscation under Section 111 ipso facto invites penalty. When a forgery rendered a document itself to be null and void having no effects whatsoever due to its non-existence to seek duty credit, that no way grants immunity from penalty Following the decision of the Hon'ble Supreme Court in the case of New India Assurance Co. v. Kalma Others - 2001 (4) SCC 342, it may be stated that the documents used by the Appellant in the pre sent case did not confer title on the Appellant for no title that had carried. 4.9 It was noticed that the Appellant sold the goods in question for which that was out of reach of Revenue for confiscation. Section 112(a) of the Customs Act, 1962 does not presuppose that goods should be available for confiscation but even non-availability of goods is within its fold when those become liable for confiscation. Therefore, extinct of the goods from an offender does not absolve him from liability in respect of penalty under the law and we did not find anything contrary to law with the ld. Adjudicating Authority f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We also note that some of the transfer documents have been signed by Bank officials purporting to verify the signature of the transferers. However, we find to our utter surprise that the Show Cause Notices issued do not bring out the role of any of the D.G.F.T. officials, Customs officials or the Bank officials in the grant of such D.E.P.B.s issued on the basis of fraudulent shipping documents and Bank remittance papers and subsequent grant of duty exemption of a huge amount at the time of clearance of the impugned imported goods. We also note that this is not an isolated case as there are other similar cases cited in paragraph 3 above. Shri Prakash Shah, the learned Advocate for M/s. De-Nocil had infact argued that duty exemption should be allowed since the D.G.F.T. and Customs officials had issued the D.E.P.B. and had failed to verify the authenticity of shipping documents and Bank remittance papers. We are of the view that such action and omission on the part of defaulting individual D.G.F.T. officials and Customs officials cannot be a ground for extending duty exemption when the conditions of the exemption notification issued in public interest are not met. Public exchequer can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter of Commissioner of Customs v. Candid Enterprises reported in 2001 (130) E.L.T. 404 (S.C.), the appellants should surrender the benefit they had already enjoyed at the cost of Revenue and liable to penal consequence of law also. 4.13 In view of the foregoing, the duty liability determined and confirmed against the Appellant in respect of the consignments cleared under cover of forged and fake DEPB scrips is therefore held to be in order and we uphold the same. However, as regards the penalty, we find that the learned Adjudicating Commissioner has not imposed any penalty on the appellants under Section 114A of the Customs Act, 1962 but has imposed penalty of Rs. 25,00,000/- under Section 112(a) of the Customs Act, 1962. Considering the fact that the learned Commissioner himself has recorded that investigation into the aspect of criminal conspiracy of forged DEPB scrips to evade duty is yet to reach finality. We set aside that part of the impugned order relating to imposition and non-imposition of penalty and remand the matter to the ld. Adjudicating Commissioner for fresh decision who would do well to pass appropriate order on the conclusion of investigation, affording re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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