TaxTMI 
TaxTMI 
2014 (5) TMI 828
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....n No. 34/97-Cus. Accordingly, imported goods valued at Rs.14,73,972/- were confiscated under section 111) of the Customs Act, 1962 and a redemption fine of Rs.1.5 lakh was imposed vide Order-in-Original no. 179/ADC/CFS/LDH/06 dated 12.02.2007. Duty utilized at the time of import was also demanded back by the adjudicating authority by confirming the demand of Rs.6,62,202/- under section 28 of the Customs Act, 1962 along with demand of interest. 3. Against the order of Additional Commissioner, the appeal was filed before the Commissioner (Appeals). However, Commissioner (Appeals) vide his Order-in-Appeal No. 92/Cus/Appl/LDH/2007 dated 27.07.2007 after relying upon Hon'ble Punjab Haryana High Court in the case of Commissioner of Customs Vs. Leader Values Ltd as reported in 2007 (218) ELT 349 (P&H) dropped the demand and also held that redemption fine was also not imposable. This judgement of Hon'ble High Court was maintained in Commissioner Vs. leader values Ltd - 2008(277) ELT A 29(S.C.) 4. Being aggrieved with the order passed by the Commissioner (Appeals), the Revenue have filed appeal before the Tribunal on the ground that:- (a) no cre....
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....t matter whether the forged certificates were furnished by the petitioner or their representatives. What is material is that representations were made to the Directorate of Foreign Trade either by them or on their behalf; the Joint Director of Foreign Trade acted on these representations and issued the DEPBs. The petitioner were fully aware that remittances had not been received, through the bankers whose certificates had been furnished. It clearly shows the fraudulent motive. Being the ultimate beneficiaries of the DEPBs, they cannot be heard to say that they are innocent. (c) The Commissioner (Appeals) has not imposed redemption fine on the ground that goods were not available and further not cleared on bond. The Revenue contended that it implied that the Commissioner (Appeals) is agreed to that extent that the goods were otherwise liable to confiscation but redemption fine was not imposable due to the fact that these were not available for confiscation. In this regard, they quoted the Supreme Court's judgement in the case of CC, (Import), Mumbai vs. Jagdish Cancer & Research Centre-2001 (132) ELT 257 (SC) whereunder it was held that once goods are liable for confiscation, duty ....
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.... DEPB scrips had not colluded with exporter to obtain the scrip in fraudulent manner. He also contended that fake DEPB scrips were validly issue but were cancelled at a later date. He also referred to the judgement of the Tribunal in the case of CCE, Amritsar Vs. Patiala Castings Pvt. Ltd.-2012 (283) ELT 269 (Tri.-del.) wherein the majority of the issues have been considered by division bench of the Tribunal on the point of DEPB scripts. It has been decided that DEPB scrips which were found to be forged were valid at the time of import, no action is required to be taken against the exporter on a later date. 8. The Revenue filed an Appeal against the order of the Commissioner (Appeals) which was decided by the Tribunal vide its final order no. 550/2011-SM(Br.) dated 17.8.2011. The Respondents approached the Hon'ble High Court against the said order and directed this Tribunal to rehear the case vide their order dated 29.7.2003 Hon'ble Punjab & Haryana High Court directed the appeal to be reheard by the tribunal after giving due opportunity to the appellants. It was further directed to have their written submissions also before decision. 9. Case was heard on 20.9.2013 and both sides....
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....m innocence when he fails to exercise due care and diligence. Failing to cause enquiry with the issuing authority of DEPB scrips crippled the assessee to claim its bona fide. Findings of the learned Adjudicating Authority do not appear to have been made suspiciously or under surmise but seems to have been based on cogent evidence. 12. When the Assessee 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 appellant 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 appellant failing to cause enquiry from JDGFT. When such bona fide is not established the appellant shall not avail the benefit of the ratio laid down by Hon'ble High Court of Punjab & Haryana in the case of CC v. Leader Valves Ltd. - 2007 (218) E.L.T. 349 (P & H) which has been approved by Hon'ble Supreme ....
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.... the question of availability of DEPB benefit observed as under: 6.In the present case admitted facts are that M/s. Parker Industries obtained DEPB Scrips by producing forged bank certificate of export and realization in respect of goods exported by them. Inquiry was conducted from the banks which shows that such certificate was not issued by the bank. DEPB Scrips were purchased by the appellants and was used for import without payment of duty. Subsequent to the import of goods DEPB Scrips were cancelled by the DGFT. The question before us is whether duty is demandable when DEPB Scrips were obtained by producing forged documents and subsequently the same cancelled by the competent authority. Reliance of the appellants is only on the Supreme Court's decision in the case of East India Commercial Co. Ltd. (supra) and the other decision of the Hon'ble Supreme Court and High Court where this decision was followed. We find that in East India Commercial Co. Ltd. (supra) case the facts were that the importer made import under import licence on the condition that the goods were not for sale but for captive consumption but s....
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....n our recent order dated 1-9-2007 in CUSAP No. 27 of 2008 (M/s. Munjal Showa Limited v. Commissioner of Customs and Central Excise (Delhi (IV), Faridabad) [2009 (246) 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 :-....
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....fere with the order upholding demand of duty on goods in respect of which exemption had been availed of on the basis of DEPB Scrips obtained against forged documents." This judgment was maintained by the Hon'ble Supreme Court as reported in Friends Trading Co. v. Union of India - 2010 (258) E.L.T. A72 (S.C.). 15. I find that in the present matter too, there is no evidence to show that the Respondents had made any inquiries with the DGFT authorities who had issued the scrips so as to prove their bona fide. In these circumstances, following the aforesaid judgments in the case of Friends Trading Company which were rendered at a later point of time and keeping in view the principle approved by the Hon'ble Supreme Court in the process, I hold that the order of the Commissioner (Appeals) is not sustainable and the Appeal of the Revenue has to be allowed so far as recovery of duty is concerned. Issue No. 2 16. On the question of applicability of the extended period of limitation in the facts and circumstances of the present case, I would refer to the following observations of the Hon'ble Punjab & Haryana High Court in the case of Friends Trading Co. v. UOI - 2011 (267) E.L....
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....on has correctly been invoked in the present case. Issue No. 3 18. On the question of imposition of redemption fine the Respondents have pleaded that since the goods were neither available physically nor was any Bond executed, there was no ground for imposition of redemption fine. I find force in their contention as law is settled on this account. 19. I also observe that the respondents have relied upon the decision of this Tribunal in the case of Commissioner of Customs, Amritsar v. Patiala Castings Pvt. Ltd. - 2012 (283) ELT 269 (Tri. - Del.) in which the issue was decided in favour of the Respondents therein primarily on the basis of the decision in the case of Commissioner of Customs v. Leader Valves Ltd. reported in 2007 (218) E.L.T. 349 (P&H) in which it was held that duty could not be demanded from an importer who had made duty free imports against DEPB scrips purchased by him from another person under bona fide belief. I find it relevant here to refer to the decision of this Tribunal in Friends Trading Co v. CC, Jalandhar - 2011 (267) E.L.T. 57 (Tri. - Del.) in which it was discussed at length as to what constituted bona fide belief. This decision was later affirmed by t....