2013 (2) TMI 420 - AT - Customs

CESTAT Chennai: Bonafide purchasers must predeposit duty for using fraudulent DEPB scrips

The Appellate Tribunal CESTAT CHENNAI ruled that M/s. Glory Impex, M/s. K.T.V. Oil Mills Ltd., M/s. Crystal Traders, and M/s. Jupiter Trading Corporation, ... Waiver of pre-deposit - Purchase of fraudulent DEPB scrips - Section 129E of the Customs Act. - Used to discharge the duty liabilities at the time of clearance of the goods - Applicants are involved in import against the fraudulent DEPB scrips obtained by them from one of the broker namely V. Sankaran - Applicant contended that the applicants except V. Sankaran are bonafide purchasers of DEPB scrips and they were not involved in purchase of fraudulent or fake DEPB scrips Held that:- As regards V. Sankaran, we find that it is a case of fraud played by V. Sankaran actively in the matter. Therefore, direct V. Sankaran to make a predeposit of 50% of the penalty amounts confirmed against him And direct the other applicants to predeposit the amount of duty confirmed less already paid. Issues:Waiver of predeposit of duty, interest, and penalty for multiple applicants under the Customs Act, 1962.Analysis:The judgment by the Appellate Tribunal CESTAT CHENNAI involved multiple applicants seeking a waiver of predeposit of duty, interest, and penalty under the Customs Act, 1962. The applicants, including M/s. Glory Impex, M/s. K.T.V. Oil Mills Ltd., M/s. Crystal Traders, and M/s. Jupiter Trading Corporation, claimed to be bonafide purchasers of DEPB scrips and argued that they had discharged duty liabilities at the time of goods clearance. However, it was revealed during the investigation that the applicants were involved in importing goods using fraudulent DEPB scrips obtained from a broker named V. Sankaran. The Tribunal noted that duty was demanded, along with interest and penalties imposed on all applicants, as well as penalties on the broker, V. Sankaran.The Tribunal considered the submissions made on behalf of the applicants, emphasizing that, except for V. Sankaran, they were bonafide purchasers who were not complicit in acquiring fraudulent DEPB scrips. The applicants claimed to have lodged complaints with the police against the brokers, leading to arrests and informing customs authorities. After hearing the arguments and examining the records, the Tribunal concluded that duty payment was necessary due to the importation using fraudulent DEPB scrips. Citing a previous decision, the Tribunal directed M/s. Glory Impex, M/s. K.T.V. Oil Mills Ltd., M/s. Crystal Traders, and M/s. Jupiter Trading Corporation to predeposit the confirmed duty amount less what was already paid within 12 weeks, with compliance to be reported by a specified date. Interest and penalties were waived during the appeal process for these applicants.Regarding V. Sankaran, the Tribunal found his active involvement in the fraud. Consequently, V. Sankaran was directed to make a predeposit of 50% of the confirmed penalty amounts within 12 weeks, with compliance reporting required by a specified date. The balance of the penalty was to be waived during the pendency of the appeals. The judgment was dictated and pronounced in open court by the Tribunal.