TaxTMI 
TaxTMI 
2008 (2) TMI 119
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.... Against the Order-in-Original No. Kol/Cus-Port/44/2005 dated 21- 3-05 passed by the ld. Commr. of Customs (Port) raising following demand, the Appellant came in appeal before this forum which was registered as Cus. Appeal Case No. CDM-63/2005 (a) Duty of Rs. 11,89,774/- was levied in respect of 6 (six) consignments imported under forged and fake DEPB No. 02602426 dated 1-2-99 and interest was payable on duty at the appropriate rate. (b) Aggregate value of goods of Rs. 28,06,206/- was confiscated under Section 111(o) of the Customs Act, 1962. However, such goods not being available for confiscation, redemption fine was not imposed. (c) Penalty of Rs. 10,00,000/- was imposed under Section 112(a) of the Customs Act, 1962. Cus. Appeal No. CDM-111/2005 Against the Order-in-Original No. Kol/Cus-Port/82/2005 dated 14-6-05 passed by the ld. Commr. of Customs (Port) raising following demand, the Appellant came in appeal before this forum which was registered as Appeal Case No. CDM-111/2005: (a) Duty of Rs. 3,08,933/- was levied in respect of 1 (one) consignment imported under forged and fake DEPB No. 02601998 dated 4-1-99 arid interest was payable on duty at the approp....
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....r persons having colluded with some Customs Officers being accused by the CBI, the appellant was totally innocent. 3.2 The DEPB Scrips being negotiable instrument and the scrips in question having been purchased paying appropriate consideration through account payee cheques and the recipients were identifiable, the appellant should not have been penalized under the law and no duty should have been imposed nor confiscation should have been ordered, 3.3 Ld. Adjudicating Authority totally erred in leving penalty under Section 112 (a) of the Customs Act, 1962 in lieu of confiscation following ratio of judgments in: (i) Commr. of Customs v. D. M. Enterprises -2007 (213) E.L.T. 414; (ii) Universal Steel Agencies v. Commr. of Customs - 2001 (138) E.L.T. 360. 3.4 Proceeding was barred by limitation under Section 28(1) of the Customs Act, 1962 read with Section 17 of the Limitation Act. When there is a limitation provided by Section 28, decision of the authority that no time limit applies to a case of fraud does not bring the Appellant to charge who was not involved in the fraud alleged. 3.5 The authorities below including the Tribunal being creatures of the statute, they ....
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....to have been purchased from market, for discharge of duty liability of Rs. 11,89,774/-. 5.4 It was noticed that the Appellant imported 1 (one) consignment with aggregate value of goods of Rs. 8,46,450/- utilizing fake DEPB Scrips bear ing No. 02601998 dated 4-1-99 involved in Customs Appeal Case No. COM 111/2005. It was also found that M/s. Hindalco Industries Ltd. was not issued above DEPB. The questionable scrips were purchased from market and used for discharge of duty liability of Rs. 3,08,933/-. 5.5 Investigation by Revenue revealed that the DEPB Scrips in question were not at all issued in favour of the above named parties. Transfer letters, letter heads and the bank account numbers used to prove transfer of the Scrips to the Appellant were bogus. In the statement recorded under Section 108 of the Customs Act, 1962 from Pulak Tapdar, Manager (Import) of the Appellant proved to be false when DGFT authorities stated that DEPB Scrips were issued with different date, import particularly amount of credit and name of the licence holder. The DEFB Scrips claimed by Appellant to be genuine were never in existence. Claim of the Appellant that the aforesaid DEPB were procured from....
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.... 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 licences/scrips becomes absolutely immaterial and irrelevant since no credit can be derived from a forged DEPB. The credit is made available on the strength of a valid DEPB. If the DEPB is forged, then the same is non est and therefore, there is no valid DEPB. As such no credit can be derived thereunder. In such circum stances, one may defend his case that one may not be liable for collusion or fraud and exposed to other penalties therefore, but still then one would be liable to pay the duty and interest and for other statutory consequences which one cannot avoid." The above judgment of Hon'ble High Court of Calcutta was appealed by ICI India Ltd. to Apex Court i....
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....es that any omission or commission calling for confiscation under Section 111 J facto invites penalty. Also the decision relied upon by the appellants related to imposition of penalty twice under Section 112 of the Act as observed in Paragraph 6 of the order. Therefore, when a forgery rendered a document itself to be null and void having no effects whatsoever due to its non-existence to seek duty credit, that no way grants immunity from penalty. The documents used denied good title over such document, remaining questionable. We got support to come to such conclusion following the decision of the Hon'ble Supreme Court in the case of New India Assurance Co. v. Kalma & Others. - 2001 (4) SCC 342. 5.11 The Appellant also relied on the decision in the case of Universal Steel Agencies v. CC, Kandla - 2001 (138) E.L.T. 360 (Tri.-Mumbai) to claim immunity from penalty. This decision is not profitable to the Appellant. In that case, it was held that when the goods are not available for confiscation, penalty was not imposable. It was the view that the redemption fine was to be fixed to recover in terms of bond and that must have been executed when the goods were cleared pending adjudicati....
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....onclude that the authorities have well acted within the statutory grant of express power to proceed against the Appellant and that too within the limitation of the period permitted by law. 5.14 Further reliance was placed by the Appellants in the case of Escorts Limited v. Union of India - 1998 (97) E.L.T. 211 (S. C.). This case laid down the principle that the authorities under statute should act within the limit of their authorities without proceeding otherwise. We did not notice in the present appeals as to whether there was anything excessive exercise of the statutory power by the authorities below to declare the DEPB Scrips used by the Appellant as forged and claim frivolous. Loss of revenue had occurred. Such loss was mitigated by the Authorities below making appropriate exercise of the jurisdiction within limitation prescribed by law. Nothing infirmity in the exercise of the power by the authorities below could be demonstrated by the Appellant to come to its rescue. Accordingly, null and void documents relied upon by the Appellant to discharge duty liability has rendered it to face consequence of law. The Appellant also relied on the decision in the case of Birla Cement W....
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.... caused by Appellant using forged and fake DEPB Scrips except to the extent hereinafter indicated relating to penalties. 5.18 Having found facthally that the Appellant had acted on the basis of forged, fake and fabricated document, without bothering to enquire from the Customs Authority, DGFT Authority or the so called DEPB holders as to genuineness of the DEPB scrips, the Appellants can be said to have committed breach of law. Following Apex Court judgment in the case of New India Assurance Co. v. Kamala & Others [2001 (4) SCC 342] it may be concluded that since the transferee Appellants have not derived any legal right out of the forged document for the reason that fraud nullifies everything as held by the Hon'ble Supreme Court in the matter of Commissioner of Customs v. Candid Enterprises reported in 2001 (130) E.L.T. 404 (S.C.), the appellants should surrender the benefit they had already enjoyed at the cost of Revenue. 5.19 So far as plea on limitation made by the Appellant is concerned, 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 t....
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....there are other similar cases cited in paragraph 3 above. Shri Prakash Shah, the learned Advocate for M/s. De-Nocil had in fact argued that duty exemption should be allowed since the D.G.F.T, and Customs officials had issued the D.E.P.B. and had failed to verify the authenticity of shipping documents and Bank remittance papers. We are of the view that such action and omission on the part of defaulting individual D.G.F.T. officials and Customs officials cannot be a ground for extending duty exemption when the conditions of the exemption notification issued in public interest are not met. Public 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 (ii) above. The Registry shall send a copy of....