2009 (3) TMI 806 - AT - Customs

Demand - Limitation - DEPB scrips - Section 28 of the Customs Act 1962 - bonafideness - stay/dispensation of pre-deposit

Summary

Issues:
- Appellants purchased DEPB scrips fraudulently obtained by other entities.
- Show cause notices issued for duty demand and penalty imposition.
- Original authority confirmed duty demand but dropped penalty.
- Commissioner (Appeals) upheld the adjudication order.
- Appellants claimed they were bona fide purchasers of DEPB scrips.
- Tribunal decisions and High Court rulings cited by both parties.
- Issue of limitation in demanding duty for an extended period.
- Provisions of Section 28 of the Customs Act discussed.
- Tribunal's analysis of collusion or misstatement by the importer.
- Comparison with previous Tribunal decisions in similar cases.
- Relevance of Supreme Court and High Court judgments in the matter.

Detailed Analysis:
The case involved the appellants purchasing DEPB scrips fraudulently obtained by other entities, leading to duty demand and penalty imposition through show cause notices. The original authority confirmed the duty demand but dropped the penalty, a decision upheld by the Commissioner (Appeals). The appellants argued they were bona fide purchasers of freely transferable DEPB scrips, citing a previous Tribunal decision and a High Court ruling in a similar case. The Revenue contended that the demand of duty for an extended period applied due to fraud, referencing a different Tribunal decision upheld by the High Court and various legal precedents, including a Supreme Court ruling and a High Court decision.

The Tribunal examined the demand of duty under Section 28 of the Customs Act, noting that the original authority found no collusion or misstatement by the appellant importer. Therefore, the demand for duty on the extended period was deemed inapplicable. This view aligned with the decision of the High Court in a related case, emphasizing that the appellant was not party to the fraud and had purchased the DEPB in good faith. The Tribunal also highlighted a previous decision in the appellant's case where duty demand for an extended period was set aside.

In the final analysis, the Tribunal considered the arguments presented by both sides, distinguishing the applicability of various legal judgments cited. Ultimately, the Tribunal set aside the impugned orders, allowing the appeals with consequential relief. The decision rested on the lack of collusion or misstatement by the appellant importer and the inapplicability of the demand for duty on the extended period, as supported by legal precedents and previous Tribunal decisions.