DEPB licence validity must be verified before sustaining a duty demand based on alleged fraudulent procurement.

Where the validity or cancellation status of a DEPB licence or release advice was not established, a duty demand based on alleged fraudulent procurement could not be finally sustained. The record did not show whether the DEPB scrips or release advice had been cancelled by the DGFT, and the Revenue failed to produce the directed status report. The order was therefore set aside and the matter remanded to the adjudicating authority for verification of the licence or release advice and fresh de novo determination of duty liability on all issues.

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Issues: Whether the matter required remand to ascertain the status of the DEPB licence and release advice and to decide the duty demand afresh.

Analysis: The demand arose from imports cleared against DEPB release orders, while the Revenue's case was that the DEPB scrips had been obtained fraudulently. The record did not establish whether the DEPB scrips or release advice had been cancelled by the DGFT, and the Revenue was unable to produce a status report despite direction. In these circumstances, the existing order could not be sustained without first verifying the validity of the DEPB licence or release advice and then reconsidering the duty liability on all issues.

Conclusion: The matter was required to be remanded to the adjudicating authority for verification and fresh de novo adjudication.

Final Conclusion: The impugned order was set aside and the appeals were disposed of by remand for fresh decision after determining the status of the DEPB licence or release advice.

Ratio Decidendi: Where the validity or cancellation status of a DEPB licence or release advice is not established, the duty demand based on alleged fraudulent procurement cannot be finally sustained and the matter must be reconsidered after verification.

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