2019 (12) TMI 1146 - AT - Customs

Tribunal Rules No Duty on Good Faith DEPB Scrip Purchasers; Appeal Allowed, Aligns with Legal Precedents.

The tribunal set aside the impugned order demanding duty from the appellant, a bona fide purchaser of DEPB scrips, which were later found to be forged. It ... DEPB benefit - benefit obtained on the basis of forged documents - illegal imports - whether liability of duty can be fastened on the appellant when appellant is a bona fide purchaser of DEPB scrips which was found latter to be forged one or not? HELD THAT:- The said issue has been decided by the Hon'ble High Court of Punjab and Haryana in the case of Commissioner of Customs, Amritsar v. Vallabh Design Products [2007 (4) TMI 274 - PUNJAB & HARYANA HIGH COURT] and extended the benefit of DEPB scrips. The said order has been affirmed by the Hon’ble apex Court reported in [2017 (1) TMI 402 - SC ORDER]. The liability of duty cannot be fastened on the appellant being a bona fide purchaser of DEPB scrips - appeal allowed - decided in favor of appellant. Issues:- Appeal against the impugned order demanding duty by rejecting the claim of import of goods against DEPB licence.- Whether duty can be demanded from a bona fide purchaser of DEPB scrips found to be forged later.Analysis:1. The appellant appealed against the duty demanded due to the rejection of their claim of import of goods against a specific DEPB licence. The Revenue alleged that the DEPB licence was obtained based on forged documents by another entity, making it invalid for the appellant to claim benefits. Consequently, a show cause notice was issued, duty was demanded, and a penalty was imposed. The appellant contested this decision.2. The main issue revolved around whether duty could be demanded from a bona fide purchaser of DEPB scrips that were later found to be forged. The appellant argued that they were a legitimate purchaser and should not be held liable for duty. The appellant cited a case from the Hon'ble High Court of Punjab and Haryana, which was affirmed by the apex court, where a similar situation was considered, and the benefit of DEPB scrips was extended to the purchaser.3. After hearing both parties and considering the submissions, the tribunal analyzed the legal precedents set by the Hon'ble High Court of Punjab and Haryana. The court's decision emphasized that if the purchaser had acquired the DEPB in good faith without involvement in any fraudulent activities, they should not be held liable for duty. The tribunal, in line with the established legal principles, held that duty cannot be imposed on a bona fide purchaser of DEPB scrips, even if the scrips were later discovered to be forged.4. Consequently, the tribunal set aside the impugned order and allowed the appeal in favor of the appellant, providing consequential relief as necessary. The decision was based on the settled legal principle that duty liability cannot be imposed on a purchaser who acted in good faith and was not party to any fraudulent activities related to the DEPB scrips.This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, relevant legal precedents, and the final decision of the tribunal based on established legal principles.