Importer liability for DEPB scrips fails where seller admits fraud and already pays the duty amount.

Customs duty and consequential penalty were found unjustified against an importer/purchaser of DEPB scrips where the seller had already admitted fraud, accepted that the excess benefit accrued to it, and paid the duty amount to the investigating authority. The record showed that the disputed scrips had been obtained through incorrect documents and later treated as void ab initio, but the duty liability arising from the same scrips had already been discharged by the seller. On those facts, no further liability could be fastened on the importer/purchaser, and the first appellate authority's order was upheld.

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Issues: Whether customs duty liability and consequential penalty could be fastened on the importer/purchaser of DEPB scrips when the seller had already discharged the duty liability arising from the same scrips.

Analysis: The DEPB scrips in question had been procured by the seller through incorrect documents and were later cancelled as void ab initio, but the record showed that the seller had admitted its role in the fraud, stated that the excess DEPB benefit had accrued to it and not to the importer, and had paid the duty amount to the investigating authority. The amount so paid matched the duty confirmed in adjudication. In these circumstances, further duty demand and penal action against the importer was found to be unjustified.

Conclusion: No liability could be imposed on the importer/purchaser, and the order of the first appellate authority was upheld.

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