TaxTMI 
TaxTMI 
TaxTMI 
2015 (11) TMI 1024
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....am Timbers Pvt.Ltd., M/s M.K. Wood India Pvt.Ltd., M/s Mukesh Kumar & Co., Shri Liluram Gajanand, M/s Antao Balaji Ltd, M/s Oswal Lumbers Pvt.Ltd., Shri Amritlal Nareshkumar, M/s B.T. Steels Ltd., M/s J.S. Khalsa Steels Pvt.Ltd., M/s Aryan Steels, M/s Vallabh Steels Ltd., M/s Indian Petrochemicals Corpn. Ltd., M/s Ispat Profiles India Ltd., M/s Nirma Ltd., M/s R.N. Forging Pvt.Ltd., M/s Sanman Trade Impex Pvt.Ltd., M/s Hazel Mercantile Ltd., M/s Priceless Invertrade Pvt.Ltd., M/s N.M. Nagpal Pvt.Ltd., M/s Rathi Ispat Ltd., M/s Sharma Comemrcial Pvt.Ltd., M/s Pushkar Steels Pvt.Ltd., M/s Silvassa Plast, M/s KLJ Organics Ltd., M/s KLJ Polymers & Chemicals Ltd.,.M/s KLJ Plsticizers & M/s Pcl Solvents For the Petitioner : Sh. W.Cristian, Paritosh Gupta, Anand Nainawati, Ms. Dimple Gohil, Uday Joshi, Vishal Agarwal, P.V. Sheth, V. Ansurkar, J. C. Patel, V.K. Jain, Ms. Shilpa Balani, Vikas Diophode, AdvocateS For the Respondent : Shri J, Nair, Authorised Representative ORDER Per: P.K. Das These appeals are arising out of a common order, and therefore, all are taken up together for disposal. 2. The relevant facts of the case in brief are that M/s. Trisuns Chemical Industry Ltd. (in....
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....r the Revenue requested time to take instruction from the Commissionerate as to whether DEPB Licence was cancelled in this case. On 29.06.2015, the learned Authorised Representative on behalf of the Revenue submitted Written Submission alongwith case laws and the matter was heard on 30.06.2015 and 13.08.2015. It was contended by the Revenue in the Written Submission that DEPB licenses were cancelled ab initio by the Development Commissioner, Kandla Special Economic Zone, Gandhidham vide Order-in-Original No. 01/2009-10 dated 28.01.2010. Thus, it is clear that while passing the impugned adjudication order dated 30.03.2007, DEPB licenses/scrips on the basis of which the appellant availed DEPB benefit, were valid. 6. The appellants imported various items without payment of duty under DEPB scrips purchased from the open market in the year 2000. Originally, the DEPB scrips were issued in favour of M/s. Trisuns against export of Castor Oil. The case of the Revenue is that DRI Authorities during investigation found that M/s. Trisuns is not eligible DEPB Scrips/Licences, as the goods were cleared from the Special Economic Zone and documents were manipulated to show the goods were cleared....
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....ked in case any duty has not been levied or has been short-levied or the interest, which has not been charged etc., by reason of collusion or any willful mis-statement or suppression of facts by the importer or the exporter or the agent of the employee of the importer or exporter. In the present case, all the appellants are importer. Section 2 (26) of the Customs Act, 1962, defined importer in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer. There is no dispute that the appellants are importers. So, it is required to be considered as to whether the importers/appellants had committed any fraud or willful mis-statement etc., as mentioned in the proviso to Section 28 of the Act. The Adjudicating Authority observed that Bills of lading were forged to export of Russia, while the goods were delivered for other destination. The details of consignments in the shipping bills were deliberately misdeclared by M/s Trisuns and obtained DEPB on the basis of above exports and transferred them to different importers, who utilized them against clearance of d....
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....d. These facts are not in dispute as we find from the finding of the learned CEGAT. The only question that has been put forward, on the basis of the finding of the facts without challenging the same, is about the effect of absence of collusion on the part of the appellant, as pointed out earlier, in relation to the availability of the credit under the forged DEPB Scrips. But in the decision in United India Insurance (supra), the insured, but the Insurance Policy was not found to be forged. The question would be different if the document itself, on the strength whereof credit is claimed is forged. In that event, the same cannot be equated with merely an irregularity in the licence of the driver driving the vehicle in relation to the liability of the insurer in relation to a valid insurance policy under the Motor Vehicles Act providing for compulsory insurance to secure third party interest. In this case, the document itself having been found to be forged whether there was collusion or fraud on the part of the appellant in the issue of the DEPB licence/scrips becomes absolutely immaterial and irrelevant since no credit can be derived from a forged DEPB. If the DEPB is forged, then th....
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....T credit on its basis, who is not party of the fraud committed by the manufacturer. The relevant portion of the said decision is reproduced below:- "10.In this connection, we find substance in the contention of Mr. Parikh, the learned senior advocate appearing on behalf of the appellants, that there is a marked distinction between a forged document and a document issued by practising fraud. If it appears that a document is a forged one or a manufactured one, it is concocted or a created one in the eye of law and it is in the eye of law a non-existent document. On the other hand, a document issued in the context of a fraud or misrepresentation, is by itself a genuine document and according to settled law, such document is, at the most, voidable and is valid till it is set aside. A transaction that takes place on the basis of such document is good one and can even give a good title to the holder in due course for valuable consideration. At this juncture, we may profitably refer to the observations of the Supreme Court made in the case of CCE v. Decent Dyeing Co., reported in 1990 (45) E.L.T. 201 = (1990) 1 SCC 180 wherein, the Supreme Court held that it would be intolerable i....
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....fraud, cannot be proceeded with by taking aid of a larger period of limitation as indicated in Section 11A(1) of the Act. It is now settled law that Section 11A(1) is applicable when there is positive evasion of duty and mere failure to pay duty does not render larger period applicable. In the case before us, it is not the case of the Revenue that the transferees were party to any fraud and therefore, the Revenue cannot rely upon a larger period of limitation. Our aforesaid view finds support from the following decisions of the Supreme Court : (i) CCE v. Chemphar Drugs & Liniments, reported in 1989 (40) E.L.T. 276. (ii) Padmini Products v. Collector of Central Excise, reported in 1989 (43) E.L.T. 195. (iii) Lubrichem Industries Limited v. CCE, Bombay, reported in 1994 (73) E.L.T. 257. (iv) Nesle (India) Limited v. CCE, Chandigarh, reported in 2009 (235) E.L.T. 577. 13. We thus find substance in the contention of Mr. Parikh that in the case before us, in the absence of any allegation that the appellants were parties to the fraud, the larger period of limitation cannot be applied, and thus, even if the original document was assumed to be issued by practising fraud, the appe....
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....en validly issued by the DGFT, but being obtained by fraud/mis-declaration on the part of the exporter, was subsequently cancelled, the judgment of the Apex Court in case of East India Commercial (supra) and Sneha Sales Corporation (supra) will apply and duty can not be recovered from the transferee if before the cancellation of the DEPB scrips duty free imports had been made by the transferee and there is no evidence showing that the transferee had not acted bona fide or was aware of the fraud committed by the original holder of the DEPB scrip. 8. Under the law of the contracts when a contract between two parties has been entered into by fraud or mis-representation on the part of one party and for this reason, the contract is a voidable contract which can rescinded by the other party, the right of rescission is lost if before rescission, the third party acting in good faith, acquires rights in the subject matter of the contract. Thus, when a person obtains some goods from another person by fraud and before the seller is able to avoid the contract, he disposes of the same to a bona fide third party, the seller can not recover the goods from the third party. Since as held by the A....
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.... of this Court it has been clearly laid down that in a case where the licence is obtained by misrepresentation or fraud it is not rendered non est as a result of its cancellation so as to result in the goods that were imported on the basis of the said licences and being treated as goods imported without a licence in contravention of the order passed under Section 3 of the Import and Export Act that fraud or misrepresentation only renders a licence voidable and it becomes inoperative before it is cancelled. In the present case the licences were cancelled by order dated December 18, 1986 after the goods had been imported and cleared. The Tribunal was, therefore, right in holding that the import of the goods was not in contravention of the provisions of Import and Export Order, 1955 and Import and Export (Control) Act, 1947 and the goods were not liable to be confiscated on that basis under Section 111(d) of the Act." (a) Commissioner of Customs, Amritsar vs. Gopi Chand Krishan Kumar Bhatia 2013 (295) E.L.T. 739 (Tri. Del.) has been held as under:- "8. In the background of the facts that - (a) DEPB scrip/licence had been actually issued by DGFT, though against misrepresentation a....