TaxTMI 
TaxTMI 
2025 (2) TMI 26
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..../s. Bilwa Labs was 'Potassium Chloride' i.e. 'Muriate of Potash', a fertilizer which was a restricted item for export. The DEPB license obtained by Bilwa Labs by fraudulent means was sold in the open market to Appellant-I and II who in turn used these DEPB scrips to import goods during the relevant period. Since, the goods imported were based on the fraudulently obtained DEPB license/DEPB scrips notices were issued denying the benefit of DEPB scrips, and the Commissioner in the impugned orders confirmed the duties against the above appellants (importers) along with interest and also imposed equivalent penalty on the appellants under Section 114A of the Customs Act, 1962. Aggrieved by these orders the appellants are in appeal before us. 3. The Learned Counsel submitted that during the period of dispute they had purchased the DEPB licenses from open market from M/s. Maharaja Exem Trade Pvt. Ltd., Bengaluru, which were originally issued to M/s. Bilwa Labs who had obtained the DEPB license by mis-declaring the export goods as Industrial Salt. These DEPB licenses since was obtained fraudulently were cancelled by the DGFT by an order dated 10.03.2010. It is submitted that the person w....
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.... Final Order No.20966-20967/2024 dated 08.10.2024 observed as follows : "The exporter M/s. Bilwa Labs had obtained the DEPB scrips fraudulently by declaring 'Muriate of Potash' as 'Industrial Salt' at the time of export for claiming the benefit of DEPB scheme is not under dispute. However, the claim of the appellant is since these DEPB scrips are freely available in the open market for purchase and they had purchased valid DEPB scrips and at the time of import, they were considered to be valid DEPB scrips, hence there cannot be demand of duty on them. It is also claimed that since the demand is time barred, the demand of duty cannot be sustained and accordingly, the interest and penalty is not sustainable. 6.1 The matter is no longer res integra in as much as the Hon'ble Supreme Court in the case of Munjal Showa Ltd. vs. Commissioner of Cus. & Ex, Delhi (supra) observed as follows: "8. From the judgment and order passed by the Tribunal and even from the findings recorded by the Department, it has been found that the DEPB licenses/Scrips, on which the exemption benefit was availed of by the appellant(s) (as buyers of the forged/ fake DEPB licenses/Scrips) ....
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....h scripts obtained fraudulently. This conclusion drawn is based on several quoted case laws of Apex Court and High Courts of Kolkata & Punjab & Haryana. The ratio laid down by Calcutta High Court in the case of ICI India Ltd. v. C.C. (Port), Calcutta [2005 (184) E.L.T. 334] is squarely applicable to the facts of the present appeal. This order of the Calcutta High Court has also been affirmed by Apex Court as reported at 2005 (187) E.L.T. A31 (S.C.) where invocation of extended period was also justified. Jurisdictional Calcutta High Court in the case of ICI India Ltd. v. CC (Port), Calcutta (supra) held as follows : "2. Relying on the judgment of the learned CEGAT in Appeal No. C/358/2000-NB(D), dated 26th September, 2002 [2003 (151) E.L.T. 336 (T)] Dr. Pal contends that there is a finding that there was no collusion on the part of the appellant. Therefore, according to him, if no fraud or collusion is found on the part of the appellant, in that event, the appellant would be entitled to the benefit of the DEPB licences/scrips. Relying on the decision in United India Insurance Company v. Lehru, (2003) 3SCC 338, Dr. Pal contends that it is just not possible for the appellant ....
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....nces, one may defend his case that one may not be liable for collusion or fraud and exposed to other penalties therefor, but still then one would be liable to pay the duty and interest and for other statutory consequences which one cannot avoid." 9.1 A script obtained from the Licensing authority fraudulently cannot give licence to any transferee to avail any Customs duty exemption. Fraud in common parlance means dishonest dealing, deceit or cheating etc. It makes no difference whether fraud is committed by outrightly forging of documents or by willful misdeclaration/misrepresentation. A fraud is a fraud and there are no categories of mild frauds and severe frauds in taxation matters. Further in a recent case of Tata Iron & Steel Co. Ltd. v. C.C., Mumbai [2015 (319) E.L.T. 546 (S.C.)] on the issue of applicability of extended period in such cases it has been held by Apex Court as follows : "[Order] - The only question in the present appeals is as to whether the customs authorities could invoke the provisions of proviso to Section 28 of the Customs Act, 1962, to avail the benefit of extended period of limitation. 2. In the facts of the present case we find that the....