TaxTMI 
TaxTMI 
TaxTMI 
2008 (1) TMI 878
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....,000 was imposed under Section 112 (a) of Customs Act, 1962. 1.2 In this Appeal the Appellant appealed against Order-in-original KOL/CUS/Port/45/2005 dated-21/3/05 passed by the learned Commissioner of Customs (Port) raising following demands and such appeal was registered as Appeal case No. CDM-36/2005 by the forum : (a) Duty of Rs. 6,84,633/- (Six lakhs eighty four thousand six hundred thirty three only) was levied in respect of consignments imported under forged and fake DEPB licence nos. 02602431 and 02602425, both dated 01.02.99 and interest was payable at the appropriate rate. (b) Goods valued CIF Rs. 15,09,881.52 (collectively) was confiscated under section 111 (0) of the Customs Act, 1962. However, as the goods were not available for confiscation, no redemption fine was imposed. (c) Penalty of Rs. 15,00,000/- (Rupees Fifteen Lakh only) was imposed under section 112 (a) of the Customs Act, 1962. 1.3 When the matter was taken up for hearing it was noticed that names of both appellants was resembling similar with different suffix "industries" and "Chemicals" to their names. But both Appellants have address at a common place. Also there was a common partner viz. Sri Madhav....
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....ey were rightly debarred to claim immunity under law. They are, therefore, liable to duty and penalty which were rightly imposed. When forged documents were utilized for clearance at the time of import, such act has defrauded Revenue. Therefore, the Appellants are not entitle to any relief by this forum. In order to avoid confiscation proceeding, the Appellant have also disposed imported goods so as to make the same out of reach of the Customs Authorities. Therefore the speaking and reasoned orders passed by the Ld. Adjudicating Commissioner with proper conclusion drawn are not liable to be interfered." Also for the fraud detected, the plea of time bar does not apply. 4. Heard both sides and perused the record. After good length of hearing, the matter called for disposal of appeal on merit dispensing pre deposit. Accordingly, pre deposit was dispensed and appeals proceeded for disposal as hereinunder stated. 5.1 in Appeal case No. CDM-35/2005, it was noticed that the Appellant imported 3 (three) consignments with aggregate valued of Rs. 11,77,473.26 making use of fake DEPB Nos.02602431 dt.01.02.99 purportedly issued originally in favour of M/s. Ispat Alloys Ltd. and 02601998 and ....
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....DGFT authorities in favour of either M/s. Ispat Alloys Ltd. nor M/s. Hindalco Industries Ltd. Those were also not lawfully transferred by the so called DEPB holders who disowned the said DEPB scrips said to have been issued in their favour and categorically denied to have issued any transfer letter to the Appellant nor had ever made any transactions with the Appellant in respect of DEPB scrips in question. 6. Having found that DEPB scrips used were fake and forged in absence of any rebuttible evidence, the next question arises for consideration is whether the Appellants are entitled to any relief. Hon'ble High Court of Calcutta in the case of ICI India Limited Versus Commr. of Customs (Port), Calcutta - 2005 (184) E.L.T. 339 (Cal.) held that when a credit was made available on a forged document, the same shall be non-est and whether there was collusion or fraud in the issue of the DEPB scrips becomes absolutely immaterial and irrelevant since no credit can be derived from a forged DEPB. The Hon'ble Court held in para 4 of the Judgement as under : "4. the DEPB licence/scrip is admittedly a negotiable one and is available in the market. Any one can purchase it from the mark....
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.... In the case of Golden Tools International v. Joint DGFT, Ludhiana, 2006 (199) E.L.T. 213 (P and H), the Hon'ble High Court has also upheld cancellation of DEPB obtained fraudulently and levy of penalty under Section 11(2) of the Foreign Trade (Development and Regulation) Act, 1992 was sustained. 8. The observations of the former Lord Chief Justice of England, Sir Edward Coke, more than three centuries ago, that "fraud avoids all judicial acts, ecclesiastical or temporal" was noticed by the Hon'ble Supreme Court in S.P. Chengalvaraya-Naidu v. Jagannath, AIR 1994 SC 853. The Apex Court observed that an act of deliberate deception with the design of securing something by taking unfair advantage of another is a "fraud". "Fraud" is a cheating intended to get an advantage. A person 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, 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 enures therefrom although the motive from which the representations proceeded may not have been bad. It does not mat....
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....that duty free imports made by the Appellant on the basis of DEPBs', fraudulently obtained tantamount to contravention of the provisions as engrafted by law and thus, no fault can be found with the order of adjudication confirming the duty demand and other consequences that flows from the said order, except to the extent hereinafter indicated. 12. So far as plea on limitation made by Appellants, it is noticeable that the duty not paid/escaped using the forged/fraudulent DEPB claim itself dragged the Appellant to the adjudication. Their tainted deal, no way exonerates them from the process of adjudication. In this connection we are inclined to agree with the view taken by Tribunal in the case of De-nocil Corpn. Protection Ltd. v. Commr. of Customs, Mumbai - 2004 (171) ELT 209 (Tri-Mumbai), and relevant parts of which in para 11 reads as : "We are of the prima facie view that the extended time limit under Section 28 of the Customs Act, 1962 is applicable since the said Sectionrefers to" collusion or any willful mis-statement or suppression of facts by the importer or the exporter or the agent or employee of the importer or exporter. Moreover, we note that the duty demands were ....
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....c exchequer cannot be allowed to be defrauded merely because some officials have either been negligent or collusive in their acts and or omissions. At the same time, we are of the firm view that the acts and omissions of the concerned D.G.F.T., Customs and Bank officials resulting in loss of customs duty should be thoroughly investigated and necessary action should be taken against the defaulting officials, if so warranted, both under the Customs Act, 1962 as well as under the relevant Conduct Rules. Hence, our directions as contained in paragraph 2 (iii) above. The Registry shall send a copy of this order to the Chief Commissioner of Customs, Nhava Sheva by name in view of our directions." 13. Having found factually that the Appellant had acted on the basis of forged, fake and fabricated document without bothering to enquire from the Customs Authority or DGFT Authority as to its genuineness of the DEPB scrips and without ascertaining from M/s. Ispat Alloys Ltd. and M/s. Hindalco Industries Ltd. as to bonafides of the scrips, the appellants submitted themselves" to consequence of law and duty credit was availed committing breach of law. The Appellants do not deserve to be exonerat....