TaxTMI 
TaxTMI 
2019 (5) TMI 983
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....the other parts of the country, were involved in fake export documents and on the basis of which they were getting various duty credit licences, such as DEPB/FPS/DFIA/BKGUI from different offices of the Directorate General of Foreign Trade. These duty free scrips were being sold by the syndicate in open market through different intermediaries. The intelligence further indicated involvement of two persons, namely, Shri Paresh Daftary of Kolkata and Shri Jyoti Biswas of Masalandpur (a place near Ghojadanga) who were the mastermind behind this fraudulent activity and they had illegally obtained duty credit license for various fraudulent export. These licenses were utilised for duty free import to the extent of Rs. 20 Crores. The clearance of import, at the strength of these fraudulently licenses were being utilised availing Telegraphic Release Advice (TRA). The TRA confirmation reports, which were being sent from the port of registration to the port of imports, were also being forged by utilising services of telephone department and by forging stamp of customs duty officers. The intelligence also indicated that Shri Paresh Daftary, Shri Jyoti Biswas and Shri Tushar Kothatri of Bombay ....
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....n obtaining subject FPS Scrips through whom this FPS license was purchased. (i) Learned Advocate also submits that the Adjudicating Authority has not appreciated the settled law by Hon'ble Supreme Court in case of Union of India vs. Sampat Raj Dugar, Reported in 1992 (58) ELT 163(SC) wherein it is held that when on the date of import the goods were covered by valid licence cancellation of licence subsequently is of no relevance and hence does not make import illegal retrospectively. In this case license has not even been cancelled by the DGFT. The appellant has been a bonafide purchaser of FPS license without being aware of the fraudulent activities of M/s Nilesh International and the other persons what so ever. (ii) Learned Advocate also states that the Adjudicating Authority has erred in treating the appellant importer as an ultimate beneficiary of such fraudulently obtained license as it has paid premium of license in question, to M/s Nilesh International, the license broker. The reliance was also place on the decision of Hon'ble Bombay High Court in case of Taparia Overseas Private Limited vs. Union of India 2003 (161) ELT 47 (Bom), which has been upheld by Hon'ble Supreme ....
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.... been not done. The fraudsters used to obtain various duty free license from DGFT claiming that the exports had been made through the Ghojadanga LCS. The syndicate also use to forge the signature of the customs officers and also with the help of postal authority he used to sent wrong confirmation about the registration of duty free license at the Ghojadanga LCS and also use to sent the TRA to the various ports for the utilisation thereof, for payment of customs duty. The appellant has obtained one of such duty free scrip at the strength of which the import duty was paid by the appellant. The appellant has failed to discharge due diligence while purchasing the said FPS license and utilisation thereof towards the payment of customs duty. He, therefore, submitted that the impugned order is sustainable. 7. Heard both sides and perused the appeal records. 8. The issue involved in the present case is regarding the utilisation of license FPS No. 0510309594 dated 28/11/11 which was issued by the Director General Foreign Trade (DGFT) to M/s Nilesh International for an amount of Rs. 17,10,861, which was later on transferred to the appellant for consideration at premium of 97 % that is Rs. ....
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....lding that the statement made in the form was not correct as the selling dealer had not paid the tax, for which the certificate was issued. This court opined that liability can be fastened on a person, who either acts fraudulently or is a party to the collusion or connivance with the offender. Genuineness of the certificate can be examined by the authority. In case of falsity, action should be taken against the selling dealers, except in the case of plea of fraud, collusion or connivance between the parties. Relevant paras thereof are extracted below : "25. In legal jurisprudence, the liability can be fastened on a person who either acts fraudulently or has been a party to the collusion or connivance with the offender. However, law nowhere envisages to impose any penalty either directly or vicariously where a person is not connected with any such event or an act. Law cannot envisage an almost impossible eventuality. The onus upon the assessee gets discharged on production of Form VAT C-4 which is required to be genuine and not thereafter to substantiate its truthfulness by running from pillar to post to collect the material for its authenticity. In the absence of any mala fide in....
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....as found to be a genuine document, though obtained by seller by producing some forged documents, to which the appellant was not a party. 9. Accordingly, the appellant cannot be held responsible for payment of import duty and interest along with the imposition of penalty under the provisions of Customs Act as has been held in the impugned order. We also find in case of Commissioner of Customs vs. Leader Valves Limited reported in 2007 (218) ELT 349 (P & H) the similar issue came for consideration in respect of DEPB license purchase from open market under a bonafide belief of being genuine. The part 9 of the judgment which is relevant is as under; 9.After hearing learned Counsel for the parties, we are of the considered view that this appeal is devoid of any merit. The assessee-respondent admittedly is not a party to the fraud. There are categorical finding that they had purchased DEPB from the open market in the bona fide belief of its being genuine. They had paid full price and accordingly have availed the benefit. Merely because at a later stage, the DEPB has been found to be fabricated and fake on the basis of BCER the assessee-respondent could not be deprived of the benefits ....