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2014 (7) TMI 919 - HC - CustomsRegularizing the credit availed fraudulently by over-valuation of goods exported - fraudulently obtained DEPB Scrips have been utilized by the exporters - Held that - A perusal of the order of the Tribunal would indicate that the respondent, being aggrieved by the Order-in-Original No.22 / 2008-Adjn-Cus, dated 29.12.2008 imposing penalty of ₹ 10.00 lakhs under Section 114 of the Customs Act, filed the appeal before the Tribunal. The Tribunal had found that the company, in which the respondent is a Director, itself had not violated any of the provisions of the Customs Act and in particular had not misutilized the DEPB scrips and thereby exonerated itself from the levy. Inasmuch as the company itself was exonerated the penalty imposed on the respondent was also set aside. The substantial questions of law said to have been arising from the orders of the Tribunal only relate to the company and no question of law as to why the order of exoneration of penalty passed in favour of the respondent needs to be interfered with, has been raised. In other words, there is no question of law which has been raised before this Court for consideration as arising from the orders of the Tribunal to maintain the appeal under Section 130 of the Customs Act. - Decided against the revenue.
Issues Involved:
1. Interpretation of DEPB Scheme as a customs duty exemption notification and the power to demand duty in case of misuse. 2. Regularization of credit fraudulently availed by over-valuation of goods exported. 3. Interpretation and application of specific Customs Notifications. Analysis: 1. The appellant filed a Central Excise Appeal under Section 130 of the Customs Act, 1962 against the Order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore. The primary issue raised was whether the CESTAT was correct in setting aside the Commissioner's Order due to the misuse of DEPB Scrips. The appellant argued that the power to exempt under the DEPB Scheme includes the power to demand duty if the exemption is misused. The appellant relied on previous judgments to support their stance. However, the Court found that the respondent, a Director in the company, was not personally involved in any violation of Customs Act provisions related to DEPB scrips. As the company was exonerated, the penalty imposed on the respondent was also set aside. The Court concluded that no question of law was raised concerning the exoneration of the penalty on the respondent, leading to the dismissal of the Central Excise Appeal. 2. The second issue raised in the appeal was whether the CESTAT was correct in regularizing the credit fraudulently availed through over-valuation of exported goods. The Court did not delve into this issue extensively in the judgment, as the primary focus was on the exoneration of penalty due to lack of personal involvement of the respondent in Customs Act violations related to DEPB scrips. 3. The third issue revolved around the interpretation and application of specific Customs Notifications, namely Notification Nos. 45/2002-Cus, 96/2004-Cus, and 89/2005-Cus. The Court did not provide detailed analysis of this issue in the judgment, as the appeal was primarily dismissed on the grounds of maintainability due to lack of raised questions of law concerning the respondent's exoneration from penalty. In conclusion, the High Court of Andhra Pradesh dismissed the Central Excise Appeal as not maintainable, emphasizing the lack of raised questions of law regarding the exoneration of penalty on the respondent. The judgment did not extensively address the issues related to the interpretation of the DEPB Scheme, regularization of fraudulently availed credit, and the specific Customs Notifications, as the primary focus was on the lack of legal grounds for the appeal.
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