2009 (2) TMI 557 - AT - Customs

Customs Act penalty overturned, duty upheld. Genuine belief in DEPB scheme. Appeal allowed, penalty set aside.

NEPTUNE TRADE LINKS PVT. LTD. Versus COMMISSIONER OF CUS., COCHIN

The Tribunal set aside the penalty imposed under Section 114A of the Customs Act, while confirming the duty and interest demand of Rs. 48,72,679. The ... Penalty - DEPB fraud Issues involved: Duty exemption under DEPB scheme, genuineness of release advices, duty demand, penalty under Section 114A of the Customs Act.Summary:The appeal was filed against Order -in-Original No. 7/2008, dated 29-2-2008 passed by Commissioner of Customs, Cochin, consequent to a remand order. The appellant sought duty exemption under the DEPB scheme based on release advices, but it was found that the advices were fake. The total duty involved was Rs. 48,72,679. The Commissioner confirmed the duty demand and imposed a penalty under Section 114A of the Customs Act.The appellant admitted liability for duty demand but argued against the penalty, stating they purchased the DEPB under a bona fide belief and had no knowledge of the fake advices. The Tribunal found that the appellant approached Cochin Customs House with purported release advices from Nhava Sheva, which were later found to be forged. The Commissioner noted that the DEPB itself was fake, and the appellant failed to follow proper procedures to verify its genuineness. Despite the duty and interest being confirmed, the Tribunal held that the penalty imposition was not justified as the appellant was a victim of circumstances.In conclusion, the Tribunal set aside the penalty while confirming the duty and interest, allowing the appeal to that extent.