TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 386
X X X X Extracts X X X X
X X X X Extracts X X X X
....FIA licenses and consequently secured undue benefits of import duty exemptions. The aforesaid exporter, M/s. Pan Parag India Ltd., was also one such exporter who had been investigated. Pursuant to the investigation, it appears that SCN dated 22.03.2013 was issued to the said exporter. The concerned regional DGFT authority is also stated to have issued an SCN dated 18.07.2012 to the said exporter proposing cancellation of the DFIA licence issued to them. It is stated that the matter is pending adjudication. 4. The department, having formed an opinion that the DFIA licenses were obtained on the strength of wilful suppression of facts by the aforesaid exporter and the impugned DFIA licences are proposed to be cancelled ab-initio, the subsequent duty free imports made by the appellant utilising such transferred DFIA license is also unlawful and the import duty foregone is therefore recoverable under the Customs Act. A notice dated 03/05-12-2014 was therefore issued to the appellant invoking the extended period of limitation demanding the import duty foregone of Rs.25,12,280/- along with applicable interest. Pursuant to the reply filed by the noticee contesting the demand as well as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n misrepresentation and which were cancelled subsequently after they have been utilised. It is submitted that while the forged script can vitiate every subsequent action, validity of the scrips duly issued by the DGFT Authorities, though based on non-disclosure of input details, will not affect their validity till they are cancelled before their use. Reliance was placed on the decisions in Commissioner of Customs Vs. Leader Valves Ltd. 2007 (218) E.L.T.349 (P & H), against which the SLP was dismissed as reported in 2008 (227) E.L.T. A 29 (S.C.), Commissioner of Customs, Amritsar Vs. Gopi Chand Krishan Kumar Bhatia 2013 (295) E.L.T.739 (Tri. - Del.), Taparia Oversea (P) Ltd. Vs. Union of India, 2003 (161) E.L.T. 47 (Bom.) and Collector of Customs, Bombay Vs. Sneha Sales Corporation, 2000 (121) E.L.T.577 (S.C.).Ld. Counsel prayed that the impugned order demanding duty with interest may be set aside. 8. Ms. Ananadalakshmi Ganeshram, Ld. A.R. appearing for the department submitted that the investigation made by DRI has found that the DFIA licenses have been issued to several exporters by the DGFT licensing authorities on misrepresentation of facts by the exporters. DGFT had also iss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on. 13. We find that the SCN at para 10 gives the grounds for invoking the extended period of limitation as under: "10. On the basis of facts as mentioned in para 2 &3 supra, the DFIA licences appeared to have been issued on the strength of manipulated export documents or fraudulent export undertakings. Hence the Export Incentives/benefits appeared inadmissible and demand of duty in respect of which exemption was claimed on the basis of fraudulently obtained DFIA licence is liable to be recovered under the provisions of Section 28 of Customs Act, 1962. Further, since exports have been made by suppression of facts and thereby obtaining DFIA fraudulently, recovery of duty with interest can be made by invoking provisions of extended period under Section 28(4) of the Customs Act, 1962." The referred para 2 & 3 of the SCN, are as under: "2. During the course of investigation, it was found that 'Exporters' appeared to have contravened the provisions of para 4.55.3 of Handbook of Procedure Vol.I of Foreign Trade Policy (FTP) (2004-09) as well as Para 4.32.2 of Handbook of Procedure Vol.I of FTP (2009-14) which enjoins the exporter to disclose technical characterist....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tail any fraud or forgery perpetrated by the Exporter. While the SCN alleges that the Department as well as DGFT is stated to have initiated proceedings by issuance of Show cause notice raising allegations against the exporter, nothing has been shown to us to evidence that these allegations have shifted from the realm of being mere allegations to concrete findings that what was alleged have been proved. There is also no evidence let in of any consequential cancellation of the DFIA licences ab initio. In any event, it remains an incontrovertible fact that the SCN does not allege that the appellant has indulged in any wilful suppression or misstatement of facts with an intent to evade payment of duty. 15. The provisions of Section 28 (4) of the Customs Act, 1962 invoked as prevailing during the relevant period, read as under: "28(4) Where any duty has not been levied or has been short-levied or erroneously refunded, or any interest payable has not been paid, part- paid or erroneously refunded, by reason of, - (a) collusion, or (b) any wilful mis-statement; or (c) suppression of facts, by the importer or the exporter or the agent or empl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee-respondent was issued a show cause notice dated 10-6-2002 (P-2) before cancelling the DEPB, which was obtained by M/s. Parker Industries, however, we are of the view that notice under Section 28 of the Customs Act could not be issued to the assessee-respondent because a period of six months stipulated by Section 28 of the Customs Act stood already expired and the rights of the parties had been crystalised, the imports having been affected on 15-11-1997. The revenue cannot avail the extended period because the assessee-respondent has not been accused of mis-representation, collusion or suppression of facts within the meaning of proviso to Section 28 of the Customs Act." It is seen that the Hon'ble Supreme Court has dismissed the Civil Appeal No. 4503 of 2008 filed by Commissioner of Customs, Amritsar against the said Judgement, reported as Commissioner v. Vallabh Design Products - 2016 (341) E.L.T. A222 (S.C.). 19. We also find that in a decision in Commissioner of Cus., Amritsar v. Gopi Chand Krishna Kumar Bhatia, 2013 (295) ELT 739 (Tri-Del), a coordinate bench of this Tribunal, has noticed the difference between void and voidable licences and after examining a number....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e had been actually issued by DGFT, though against misrepresentation and forged papers produced by the exporter; (b) there is neither allegation nor evidence that the respondent was aware of the fraud committed by the exporter - M/s. Amber Exports at the time of making imports; and (c) at the time of import, in March 2000, the DEPB scrip was valid as the same was cancelled only on 7-12-2004; the principle that fraud nullifies everything would not be applicable to the respondent, as - (i) issue of DEPB scrip to an exporter by DGFT against certain stipulated export performance is like an agreement in the nature of grant and when the DEPB scrip has been issued against forged papers produced or misrepresentation by the Exporter, the agreement would be a voidable agreement and the DEPB scrip would be valid till it is cancelled; (ii) in terms of Apex Court's judgment in case of Vikas Sale Corporation reported in [1996] 102 STC 106 and judgment of Hon'ble Delhi High Court in case of Philco Exports v. STO reported in (2001) 124 STC - 503 (Cal.), REP licence and DEPB scrip are 'goods' attracting sales tax on their transfer on sale; (iii) in this ....