Tribunal rules in favor of appellant, orders duty refund, imposes penalty for lack of vigilance. The tribunal ruled in favor of the appellant, setting aside the demand for duty payment and ordering a refund. However, a penalty of 25% of the duty ...
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Tribunal rules in favor of appellant, orders duty refund, imposes penalty for lack of vigilance.
The tribunal ruled in favor of the appellant, setting aside the demand for duty payment and ordering a refund. However, a penalty of 25% of the duty involved was imposed due to the appellant's lack of vigilance in purchasing DEPB scrips. The judgment was delivered on 18.10.2016 by tribunal members Mr. Ashok Jindal and Mr. Devender Singh.
Issues: 1. Whether the appellant is entitled to a refund of duty paid or notRs. 2. Whether the penalty can be imposed on the appellant or notRs.
Analysis:
Issue No. (i): The appellant contended that they purchased DEPB in good faith and were unaware of any fraudulent activity. They argued that the penalty should not be imposed as they paid duty based on the department's assurance of a refund if the amount was recovered from the CHA or their representative. The tribunal referred to a High Court order and found that the duty confirmed against the appellant had already been recovered from other parties involved in the fraud. Consequently, the tribunal set aside the demand of &8377; 1,27,350/- and ordered the amount to be refunded to the appellant.
Issue No. (ii): The department argued that the appellant, though not directly involved in the fraud, was not vigilant while purchasing the DEPB scrips. The tribunal acknowledged the lack of vigilance on the appellant's part and found the penalty to be imposable. However, considering that the appellant had paid the duty along with interest, the tribunal decided to restrict the penalty to 25% of the duty involved. Therefore, the tribunal disposed of the appeal with these terms.
In conclusion, the tribunal ruled in favor of the appellant regarding the refund of duty paid, setting aside the demand and ordering a refund. However, the tribunal imposed a penalty of 25% of the duty involved due to the lack of vigilance on the appellant's part during the purchase of DEPB scrips. The judgment was pronounced on 18.10.2016 by the members of the tribunal, Mr. Ashok Jindal and Mr. Devender Singh.
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