TaxTMI 
TaxTMI 
2010 (10) TMI 163
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....Ltd., Mandi Gobindgarh -do- 4. C/425/06 Commissioner of Customs Amritsar v. M/s. Mittal Merchants 44/Cus/CHD/06 dated 16-3-2006 passed by the Commissioner (Appeals) Chandigarh. 5. C/461/06 Commissioner of Customs Amritsar v. M/s. Dang Steel Pvt. Ltd. 45 & 46 /Cus./CHD/06 dated 17-3-2006 passed by the Commissioner (Appeals) Chandigarh. 6. C/537/06 Commissioner of Customs Amritsar v. M/s. Dev Steel Forging Industry. -do- 2. The material facts and cause of action in respect of aforesaid appeals being similar and reason of decision by the learned first appellate authority also being same, those appeals are disposed commonly by this order. The material facts found by the authorities below in respect of each such appeal are as under : Commissioner of Customs Amritsar v. M/s. Sona Casting Pvt. Ltd. C/462/06 Commissioner of Customs Amritsar v. M/s. Chopra Metal Company C/463/06 Commissioner of Customs, Amritsar v. M/s. Datt Multmetal Ltd. 2.1 These 3 (three) appeals arose out of a common order inappeal passed by learned Commissioner (Appeals) setting aside demand of duty, redemption ....
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....f the Customs Act, 1962. As the goods were not available for confiscation, and already cleared for home consumption, redemption fine of Rs. 50,000/- in lieu of confiscation was imposed. A penalty of Rs. 20,000/- was also imposed upon them under Section 112 of the Act. 2.5 Demand of Rs. 55,411/- (Rs. 28.065/- BCD + Rs. 27,346/- SAD) along-with interest was confirmed against M/s. Datt Multimetal Ltd. and the goods valued at Rs. 5,61,293/- imported vide Bill of Entry No. 1173 dated 25-9-2001 were confiscated under Section 111(o) of the Customs Act, 1962. As the goods were not available for confiscation, and already cleared for home consumption, redemption fine of Rs. 30,000/- in lieu of confiscation was imposed. A penalty of Rs. 5,000/- was also imposed upon them under Section 112 of the Act. 2.6 Being unsuccessful in adjudication, all the 3 (three) Respondents, appealed to the learned Commissioner (Appeals) Chandigarh. He allowed their appeal in terms of a common Order-in Appeal No. 41 to 43/Cus/CHD/06 dated 28-2-2006 setting aside the duty demands, redemption fine, interest and penalty holding that no act or omission or commission were brought on record to substant....
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....procurement of DEPB and the Respondents had purchased the DEPB scrips in normal market parlance and made the payment therefor through bank transactions for which Revenue is in appeal against the first appellate order praying for restoration of order of adjudication. 2.8C/461/06 Commissioner of Customs Amritsar v. M/s. Dang Steel Pvt. Ltd. Revenue being aggrieved by the first appellate order passed by learned Commissioner (Appeals) setting aside demand of duty, redemption fine, penalty and interest levied came in appeal for restoration of order of adjudication. M/s. Dang Steel Pvt. Ltd. B-XXIX-532/6-B/2, Singla Cycle Road, Opp. Dhandari Railway Station, Ludhiana utilized DEPB scrip No. 3010011116/4/06/00 dated 9-8-2001 for import of goods, free of duty, using Notification No. 34/97-Cus., dated 7-4-1997. Import was made vide Bill of Entry No. 935 dated 14-8-2001. The DEPB scrip used above was transferred to the respondent by M/s. Mukesh Steel Industries, Ludhiana, who earlier purchased the same from M/s. M.R. International, Ludhiana. The Directorate General of Foreign Trade, Ludhiana found that the Bank Certificate of Exports & Realization (BCER) on the basis of which ....
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....e, Ludhiana found that the Bank Certificate of Exports & Realization (BCER) on the basis of which the aforesaid DEPB scrip was obtained was not issued by the concerned bank, but was forged. Thus the DEPB scrip was cancelled being ab-initio void by the Jt. DGFT, Ludhiana vide order issued from file No. 9/33/AM.02/ ECA/LDH/61 dated 20-12-2001. As the DEPB was abinitio void adjudication was made order No. 14/CUS/ADC/05 dated 25-5-2005 by the Addl. Commissioner, Customs (Preventive) Commissionerate, Amritsar, which was issued under C. No. VIII-10(36)/Cus/Adj./HQ/2002/2250-58 dated 26-5-2005. Duty demand of Rs. 1,16,061/- was made followed by interest and goods valued at Rs. 6,93,750/- were confiscated under Section 111(o) of the Customs Act, 1962. As the goods were not available for confiscation, and already cleared for home consumption, redemption fine of Rs. 50,000/- in lieu of confiscation was imposed. A penalty of Rs. 25,000/- was also imposed under Section 112 of the Act. 3. Commissioner (Appeals) Chandigarh vide Order-in-Appeal No. 45 & 46 /Cus/CHD/06 dated 17-3-2006 allowed appeal of the assessee and set aside the duty demands redemption fine, interest and penalty on th....
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....ourt in the case of Ram Preeti Yadav v. U.P. Board of High School and Intermediate Education - AIR 2003 SC 4268 that no court in this land will allow a person to keep an advantage which he obtained by fraud. (8). Tribunal in the case of CC v. D.M. Enterprises - 2007 (213) E.L.T. 414 held that fraudulently obtained DEPB Credits has no title on the face of law and it was held in DIC India Ltd. v. CC - 2008 (226) E.L.T. 545 that DEPB credit obtained on the basis of forged and fake document does not confer any title on the claimant and others who use such ab initio void credits. (9). Tribunal in the case of ICI India Ltd v. CC - 2009 (240) E.L.T. 290 held that transaction based on fraud continues to be tainted by the vice and the person committing the fraud is precluded from deriving any benefit. (10). Similar view was also expressed by Tribunal in the case of Kamala Metachem v. CC - 2007-TIOL-2247-CESTAT-KOL and in the case of M/s. Synotex Industries v. CC - 2008-TIOL-777-CESTAT-KOL. (11). When the material evidence established fraud against Revenue white collar crimes committed under absolute secrecy shall not be exonerated from penal consequence of law following Apex Court judgment ....
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....t imposable following judgment of Hon'ble High Court of Punjab Haryana in the case of CC v. Raja Impex Pvt. Ltd. - 2008 (229) E.L.T. 185 (P & H) and Tribunal's decision in Chinku Exports v. CC - 1999 (112) E.L.T. 400 (Tri.) as affirmed by Apex Court in CC. v. Chinku Exports - 2005 (184) E.L.T. A36 (S.C.). 6.Heard both sides and perused records and gone through the citations made by them. 7. The principal issue involved in this case is whether the transferee respondents were entitled to the benefit of DEPB scrips fraudulently obtained by the transferor thereof and whether redemption fine and penalty was imposable when goods were not available for confiscation. 8. Evidence gathered by Revenue unambiguously proved that the DEPB scrips used by the respondents for discharge of customs duty were fraudulently obtained by the transferors and were transferred to them. They did not make any enquiry from JDGFT to ascertain genuineness of the same. It is established principle of law that fraud and justice are sworn enemies. An assessee acting un-cautiously and without being vigilant has no right to claim innocence when he fails to exercise due care and diligence. Failing t....
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....SCC 100] Ram Preeti Yadav v. U.P. Board of High School and Intermediate Education [2003 (8) SCC 311], Ram Chandra Singh's case (supra) and Ashok Leyland Ltd. v. State of T.N. and Another [2004 (3) SCC 1]. Suppression of a material document would also amount to a fraud on the court, (see Gowrishankar v. Joshi Amha Shankar Family Trust, [1996 (3) SCC 310] and S.P. Chengalvaraya Naidu's case AIR-1994 SC-853. No judgment of a Court can be allowed to stand if it has been obtained by fraud. Fraud unravels everything and fraud vitiates all transactions known to the law of however high a degree of solemnity. 12. When the Assessees acquired DEPB scrips from market without being an original acquirer, as an abundant caution, to avoid evil consequence of fraudulently obtained scrips, could have safeguarded its interest causing enquiry from JDGFT as to genuineness of the scrips. But that was not done. The respondents failed to acquire no title over the scrips but became beneficiary of ill got scrips. Notificational benefit was availed at the cost of public exchequer which is required to be surrendered for the undue gain made. Bona fides was not established by the respondents failing to....
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....whose case is based on falsehood has no right to seek relief in equity. In Commissioner of Customs v. Essar Oil Ltd., (2004) 11 SCC 364 = 2004 (172) E.L.T. 433 (S.C.), their Lordships of the Supreme Court have observed that it is a fraud in law if a party makes representations, which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad. Being the ultimate beneficiaries of the DEPBs, the respondents were not innocent. Claim at the threshold was based on non est DEPB scrips. Therefore Revenue has rightly invoked extended period under Section 28 of the Customs Act, 1962 to adjudicate the matter. The citations made by Revenue come to their rescue. 14. It has been held in ICI India Limited v. C.C (Port), Calcutta - 2005 (184) E.L.T. 339 (Cal.) the DEPB licence/scrip is admittedly a negotiable one and is available in the market. Any one can purchase it from the market and avail of the credit out of it. This was so done by the appellant. But ultimately it was found that the said DEPB licences/scrips were forged. These facts are not in dispute. The document itself having been found to be forged basing ....
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....E.L.T. 18 (P & H)]. After considering the observations of the Hon'ble Supreme Court in East India Commercial Company Limited v. Collector - 1983 (13) E.L.T. 1342 (S.C.) = AIR 1962 SC 1893, Collector of Customs, Bombay v. Sneha Sales Corporation - 2000 (121) E.L.T. 577, Sampat Raj Dugar - 1992 (58) E.L.T. 163 and Aban Loyd Chiles Offshore Ltd. and Others v. Commissioner of Customs, Maharashtra - 2006 (200) E.L.T. 370 (S.C.) = (2006) 6 SCC 482, by the Bombay High Court in Taparia Overseas (P) Limited v. UOI - 2003 (161) E.L.T. 47 and K. Uttamlal (Exports) Pvt. Limited v. UOI - 1990 (46) E.L.T. 527 and by the Allahabad High Court in Coolade Beverages Limited v. Commissioner of Central Excise, Meerut - 2004 (172) E.L.T. 451 and H. Guru Investment (North India) Pvt. Limited v. CEGAT, New Delhi, 1998 (104) E.L.T. 8 and judgments of this Court in Commissioner of Customs, Amritsar v. Vallabh Design Products - 2007 (219) E.L.T. 73 and Commissioner of Customs v. Leader Valves Ltd. - 2007 (218) E.L.T. 349, it was held as under :- "12. We do not find any applicability of the above judgment to the facts of the present case. In the present case, DEPB Scrip's were forged, which has been admitt....