AI Drafter 
TaxTMI 
TaxTMI 
2018 (6) TMI 489
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.....A. for respondent ORDER Per: Raju These appeals have been filed by revenue against importers who were bonafide buyers of DEEC licenses and against whom no demand of duty has been confirmed in the impugned order. Appeal has also been filed by Sh Bhlachandra V Jadhav, employee of Anmol Shipping Agency, against imposition of penalty. 2. The facts of the case are that certain Advance licences were obtained by mis-declaring the goods exported as 100% Polyester Filament yarn whereas these were actually manmade fibre made from 100% polyester staple fibre. The compositions of the material and the weight of the material were enhanced in order to get extra and undue duty free entitlement of polyester filament yarn as exempt material against the said exports. It was alleged that the forgery and fabrication was being carried out by Shri Ashok Pokharkar in connivance with Shri Dayaram Agarwal of Ashok Fashion and Shri Suresh Agarwal of M/s Asheema Fashions Pvt. Ltd. and Asheema Exports. Different sets of same invoices were prepared for exports by Shri Dayaram Agarwal and Shri Suresh Agarwal. While one set of invoices having common description as "100% Polyester voil" was used for s....
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....ed that they had obtained 13 Advance licences covered under 76 Shipping bills. 4. Shri Ashok Pokharkar in his statement admitted that Shri Dayaram D. Agarwal, Chairman and Managing Director of M/s Ashok Fashions Ltd. and Shri Suresh Agarwal of M/s Asheema Fashions Pvt. Ltd. and M/s Asheema Exports had informed him that they intend to export carbonised fabrics and the same was to be mis-declared as fabrics made out of 100% Polyester Filament yarn in order to get duty free entitlement of polyester filament yarn as exempt material against the said exports; that after discussion Shri Dayaram Agarwal and Shri Suresh Agarwal agreed to pay him 1% of the FOB value as his clearing agency / forwarding charges and for undertaking the job of arranging the examination of carbonised fabrics as fabrics made out of 100% polyester filament yarn and also towards the enhancement of the weight in export promotion copies, he agreed to pay him @ Rs. 5000/- in respect of consignments consisting of 15 bales and above and @ Rs. 3000/- for other consignments. 5. It was alleged that Sh Ashok Pokharkar fabricated the Test reports of SASMIRA on the basis of the abovementioned second set of invoice.....
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....es along with proposal for penalty against various people. Similarly an SCN dated 14.7.2007 was issued to M/s Aheema Fashions Pvt. Ltd. and M/s Asheema Exports and the importers who had caused imports against these licenses. The Adjudicating Authority vide order dated 20.11.2007 confirmed the duty on M/s Ashok Fashions however dropped the demand against the various importers who had imported against the Advance Licenses obtained through fraud. Similarly in the case of M/s Asheema Fashions Pvt. Ltd. and M/s Asheems Exports, the Adjudicating Authority vide order dated 12.3.2008 confirmed the duty on M/s Asheema Fashions Pvt. Ltd. and M/s Asheema Exports however dropped the demand against the various importers who had imported against the Advance Licenses obtained through fraud. Revenue is in appeal against the said orders. 9. Ld AR argued that while absolving the importers of all the charges, the Adjudicating Authority held that it would be against the various judicial pronouncements cited by the Transferee Importers to require the transferee to pay customs duty on the goods imported against the subject license, but he has not discussed any of these judgements. It was argued that ....
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.... buyer be aware held in that a buyer of a license should establish that he made enquiry and took precautions to find out the genuineness of the license which he is purchasing. If he has not done that, the consequences have to follow. Further the Hon'ble court also held that when fraud is involved, in the eye of law such documents had no existence. Since the documents have been established to be forged or fake obviously fraud was involved and that was sufficient to extend the period of limitation. 13. She also relied on the decision of the Hon'ble Supreme Court in the case of Tata Iron and Steel Co. Ltd. vs. Commissioner of Customs, Mumbai reported in 2015 (319) ELT 546 (SC) wherein it was held that when the original license holder had deliberately suppressed the facts and made willfully wrong declaration to the licensing authority to obtain the endorsement of transferability of the same while transferring the licenses, extended period of limitation would be available to the authorities for the purpose of claiming duty from the transferee of the license. 14. She argued that the Hon'ble High Court of Punjab and Haryana in the case of Friends Trading Co. vs. Union of India repor....
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....(284) ELT. 29 (Ker.) wherein it was held that the purchase of DEPB credit has nothing to do with Customs Department which cannot be held liable for fraud, if any, committed by the seller against the purchaser. Remedy is available to the purchaser against the seller and not against the Custom House. 17. She argued that 45 licenses issued to M/s Asheema Fashions Pvt. Ltd. were cancelled and 10 licenses issued to M/s Ashok Fashions were suspended. Similarly in the case of M/s Ashok Fashion for 12 out of 13 licenses, the DGFT had issued SCN for cancellation of the licenses. She argued that even if all the licenses have not been cancelled, most of them have been suspended and duty can be demanded by Customs Authority for violation of the conditions of notification no. 204/92-Cus dated 19.5.1992. She relied on the decision of Tribunal in the case of M/s Eastern Silk vs. Commissioner of Customs (Airport), Kolkatta, while following the principles laid down by the Hon'ble Supreme Court in the case of Commissioner of Customs, Hyderabad vs. Pennar Industries and Others reported in 2015- TIOL-162-SC-CUS it was held that even if the licensing authority have not taken any action in respect of....
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....n totally different circumstances. So far as appellants are concerned no other decisions have been examined. The commissioner has granted relief to the transferee importers by observing as follows:- "It is seen that although the adjudicating authority has absolved the transferee importers of all charges, leveled against them in the subject show-cause notice as well as the corresponding liabilities, on the grounds that it would be against the various judicial pronouncements cited by the transferee importers to require the transferees to pay customs duty on the goods imported against these licences, but he has not discussed any of these judgements in his order. In the light of what has been stated above, one can clearly see that the various acts of commission and omission have occurred at the point of export and the "transferee importers" are not the parties actively concerned with the various acts of commission and omission made by the licence holder, at the point of exports. Therefore, there is no question of requiring them to pay customs duty on the goods imported against these licences, the import having been effected by them as a "bonafide transferee" of the re....