Fraud vitiates DEPB claims: penalty under customs law survives even without specifying the exact Section 112 limb.

Penalty under Section 112 of the Customs Act was sustained where DEPB benefits were obtained on the basis of forged Bank Certificates of Export and Realisation. The recorded fraud and forgery were supported by the respondent's own admission that the certificates were forged, and once the DEPB scrips were procured through fake documents the transaction was treated as non est, with fraud vitiating the process. The omission in the show cause notice to specify clause (a) or clause (b) of Section 112 did not invalidate the proceedings because the respondents had full opportunity to and no prejudice was shown. The objection that they were not the importer also failed, as the fraudulent conduct attracted confiscation and penal consequences.

---

---

Issues: Whether penalty under Section 112 of the Customs Act, 1962 could be sustained against the respondents for obtaining DEPB benefits on the basis of forged Bank Certificates of Export and Realisation, despite the show cause notice not expressly specifying clause (a) or clause (b) of Section 112.

Analysis: The finding of fraud and forgery recorded by the Adjudicating Authority stood supported by the respondent's own admission that the bank certificates were signed by him and were forged. Once the DEPB scrips were found to have been obtained on the basis of fake documents, the transaction was non est and fraud vitiated the entire process. The omission in the show cause notice to specify the precise limb of Section 112 did not, by itself, invalidate the penalty proceedings, particularly when the respondents had full opportunity to reply and no prejudice was shown. The liability under Section 112 was also not displaced by the technical objection that the respondents were not the importer, since the fraudulent conduct rendered the goods liable to confiscation and attracted penal consequences.

Conclusion: The penalty under Section 112 of the Customs Act, 1962 was rightly attracted and the respondents' challenge to it failed.

---