Forged DEPB documents defeat customs exemption, extend limitation for suppression, and sustain duty, interest and penalty exposure.

Forged DEPB transfer release advices confer no right to customs exemption, and duty remains chargeable once the documents are shown to be forged. The Court applied the proviso to Section 28(1) of the Customs Act and treated the importer's nondisclosure after being confronted with the forgery as wilful suppression, so the extended limitation period applied and the demand was not time-barred. Because the exemption claim failed, consequential interest followed, and penalty was not interfered with in the absence of any finding of bona fides in favour of the importer. No substantial question of law arose on the remand of penalty or the challenge to the relied-upon statement.

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Issues: (i) Whether duty demand under the proviso to Section 28(1) of the Customs Act, 1962 was barred by limitation in respect of goods cleared against forged DEPB transfer release advices; (ii) whether the importer could retain exemption benefit on the strength of forged documents and avoid consequential interest and penalty; (iii) whether the remand on penalty and the rejection of reliance on the impugned statement gave rise to any substantial question of law.

Issue (i): Whether duty demand under the proviso to Section 28(1) of the Customs Act, 1962 was barred by limitation in respect of goods cleared against forged DEPB transfer release advices.

Analysis: The goods were cleared on the basis of forged DEPB scrips and the importer was informed of the forgery within a short time of clearance. After being confronted with the forged character of the documents, the importer did not disclose the true position and had already paid the duty under protest. In these circumstances, the failure to disclose the true facts amounted to willful suppression within the proviso to Section 28(1). The extended period was therefore attracted.

Conclusion: The demand was not time-barred and the issue was decided against the assessee.

Issue (ii): Whether the importer could retain exemption benefit on the strength of forged documents and avoid consequential interest and penalty.

Analysis: The Court held that a forged document has no legal sanctity and no exemption benefit can be claimed or retained on its basis. The case was distinguished from authorities dealing with licences that were valid on the date of clearance or with bona fide transferees, because here the documents themselves were forged. The charge of duty attached to the goods, and once the exemption failed, the consequential levy of interest followed. As to penalty, the Court treated bona fide conduct as material and found that the Tribunal had not recorded any finding of bona fides in favour of the importer.

Conclusion: The exemption claim failed, and the consequential duty and interest were upheld. The penalty issue also did not warrant interference.

Issue (iii): Whether the remand on penalty and the rejection of reliance on the impugned statement gave rise to any substantial question of law.

Analysis: The Court found no substantial question of law on either aspect. The penalty remand was not erroneous in the circumstances, and no argument was pressed on the challenge to the statement relied upon. The appeal accordingly disclosed no merit.

Conclusion: No substantial question of law arose on these aspects.

Final Conclusion: The assessment of duty, the invocation of the extended limitation period, and the consequential levy of interest were sustained, and the appellate challenge failed in full.

Ratio Decidendi: Forged exemption documents confer no enforceable right to duty exemption, and once their forgery is known or confronted, nondisclosure of the true facts amounts to willful suppression justifying the extended limitation period and consequential fiscal liabilities.

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