2008 (10) TMI 229

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.... the Appellant under Section 112(a) of the Customs Act, 1962. The impugned order was passed without prejudice to the action that may arise against the persons, companies or goods not covered by the subject show-cause notice. 2. Ld. Counsel, Shri Vishwanath Shukla appearing for the Appellant argued that: (A) The demands are time barred and hence the impugned order is liable to be set aside. (B) Principles of natural justice have been violated as the relied upon documents were not made available and no cross-examination of the Customs authorities was granted. (C) There is no evidence on record to prove that the Appellants acted in collusion with non-existent firms and other unscrupulous persons. (D) The Appellants have availed the benefit of exemption Notification No. 34/97-Cus. dated 7-4-1997 in the manner prescribed under law. (E) The Appellants have adopted one of the two modes of discharging the duty liability permissible under law. (F) Assessment of duty in the present case has attained finality and cannot be reopened. (G) The Appellants are entitled to invoke the principle of promissory estoppels against the Government. (H) The Appellant had taken suf....

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....llant were bogus. Revenue had made extensive enquiry with all those who were in the chain of the deal under Section 108 of the Customs Act, 1962. The DEPB scrips claimed by Appellant to be genuine were proved to be never in existence as revealed by enquiry and that remained un-controverted by Appellant. No enquiry was made by the Appellant any time with DGFT Authority to find truthfulness of the DEPB scrips although payment were stated to have been made through Deutsche Bank, Kolkata drawing cheques in favour of National Engineering Works, M/s. Impex Corporation, M S.R.S. Traders, M/s. James Exterprise and M/s. Classic International who issued debit notes. These intermediaries were found to be fictitious. The ld. Adjudicating Authority on evaluation of the evidence on record found that the DEPB scrips in question were forged ones for following reasons and such reasons remained un-assailed: * It was confirmed to be forged as per records of the issuing authority i.e. DGFT; * The purported original licence holders M/s. Eastern Spinning Mills & Industries Limited, M/s. Ispat Alloys Limited, and M/s. Hindalco Industries Limited denied to have ever possessed or transferred the scri....

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....ld 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 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 circumstances, 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....

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....alma & Others - 2001 (4) SCC 342, it may be stated that the documents used by the Appellant in the pre sent case did not confer title on the Appellant for no title that had carried. 4.9 It was noticed that the Appellant sold the goods in question for which that was out of reach of Revenue for confiscation. Section 112(a) of the Customs Act, 1962 does not presuppose that goods should be available for confiscation but even non-availability of goods is within its fold when those become liable for confiscation. Therefore, extinct of the goods from an offender does not absolve him from liability in respect of penalty under the law and we did not find anything contrary to law with the ld. Adjudicating Authority for initiation of proceeding against the Appellant so as to deal the Appellant in accordance with law. The proceeding having been initiated in view of fraud alleged we found that the proceeding was not barred by limitation. That was well within the grant of law to recover loss of revenue resulted out of use of questionable DEPB scrips. 4.10 It may be stated that duty not paid/escaped for forged/fraudulent DEPB claim dragged the Appellant to the process of adjudication. Taint....

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....the role of any of the D.G.F.T. officials, Customs officials or the Bank officials in the grant of such D.E.P.B.s issued on the basis of fraudulent shipping documents and Bank remittance papers and subsequent grant of duty exemption of a huge amount at the time of clearance of the impugned imported goods. We also note that this is not an isolated case as there are other similar cases cited in paragraph 3 above. Shri Prakash Shah, the learned Advocate for M/s. De-Nocil had infact 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 ads 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., C....