Import of Vinyl Chloride Monomer with Fake Licenses Appeal Allowed, Duty Demand Set Aside

The appeal in the case regarding the import of Vinyl Chloride Monomer using fake DEPB licenses was allowed. The Tribunal set aside the order for duty demand, interest, and penalty imposition due to the lack of evidence showing importers' knowledge or collusion in using the forged licenses. The decision was made on the grounds of limitation, as the extended period did not apply without proof of importers' involvement. The judgment was rendered by Vice-President Ms. Jyoti Balasundaram on 16-3-2009.

---

---

Issues:
1. Import of Vinyl Chloride Monomer without payment of duty using fake DEPB licences.
2. Confiscation of imported goods, duty recovery, interest, and penalty imposition.
3. Limitation period for confirming duty demand against the importers.
4. Allegation of collusion and knowledge of fake/forged licences by the importers.

Analysis:
1. The appellants imported Vinyl Chloride Monomer using DEPB licences allegedly issued by ADGFT, Kanpur under an Exemption Notification. The licences were purchased from a broker, later found to be fake. A show-cause notice was issued proposing confiscation of goods, duty recovery of Rs. 95,29,591, interest, and penalty under the Customs Act.

2. The Commissioner confirmed the duty demand, interest, and imposed a penalty. The appeal was based on the ground of limitation. The demand under Section 28(1) required proof of importers' knowledge of the fake licences or collusion. Reference was made to legal precedents like Hico Enterprises and Aafloat Textiles to establish the necessity of such proof.

3. The Tribunal found that the allegation of collusion was not in the show-cause notice, and the finding lacked evidence. The Commissioner's assertion that importers did not verify the DEPB scrips did not amount to collusion. Importers were not shown to have knowledge of the fake licences, leading to the conclusion that the extended limitation period did not apply.

4. Consequently, the impugned order was set aside on the ground of limitation, and the appeal was allowed. The decision was based on the lack of evidence proving importers' knowledge or collusion regarding the fake licences. The judgment was delivered on 16-3-2009 by Ms. Jyoti Balasundaram, Vice-President of the Tribunal.

---