Tribunal rules on duty demand for fake DEPB scrips, overturns penalty due to lack of fraudulent intent.

The Tribunal upheld the duty demand due to fake DEPB scrips, but as there was no fraudulent intent, the penalty was overturned. The appeal was partially granted, stressing the need to verify document authenticity to prevent liability and the repercussions of fraud in transactions involving DEPB scrips.

---

---

Issues involved:
The issues involved in this case are the purchase of DEPB scrips from the open market on a bonafide belief, the discovery of fabricated DEPB scrips, the invocation of extended period to recover duty, and the imposition of penalty.

Summary:

Issue 1: Purchase of DEPB scrips and discovery of fabrication
The appellant purchased DEPB scrips from the open market on a bonafide belief, later found to be fabricated, leading to the department seeking to recover the duty availed by invoking the extended period. The dispute pertains to the period Jan 2004, with a show cause notice issued on 21.05.2008.

Issue 2: Invocation of extended period and imposition of penalty
The Revenue sought to rely on a decision regarding the invocation of the extended period, citing fraud vitiates everything, leading to the justification of invoking the extended period of limitation. The Apex Court held that the department was justified in invoking the extended period due to the forged nature of the DEPB licenses. The penalty proceedings were remanded to the adjudicating authority for further action.

Judgment:
The Tribunal found that the duty demand is sustained based on the fake scrips, which did not vest any right in the appellant. However, as there was no intention to commit fraud or forgery, the penalty imposed was set aside. The appeal was partly allowed based on these findings.

This judgment highlights the importance of verifying the authenticity of documents such as DEPB scrips to avoid liability, while also emphasizing the consequences of fraud in such transactions.

---