2008 (2) TMI 332 - AT - Customs

Appellant trader of DEPB licences, supplied DEPB scrips and TRAs to importer these DEPB scrips and TRAs were found fake - allegation against appellant is that he abetted the importer s offence of having availed duty exemption on basis of fake licence appellant had knowledge of fake character of DEPB scrips and TRAs - appellant abetted the importers offence of having rendered the goods liable for confiscation u/s 111 & consequently he rendered himself liable for penalty u/s 112(a)

Summary

Issues: Penalty imposed under Section 112 of the Customs Act for abetting duty exemption fraud based on fake DEPB licences.

Analysis:
1. The appellant was penalized under Section 112 of the Customs Act for his involvement in trading DEPB licenses, which were found to be fake. The appellant's modus operandi involved showing xerox copies of such licenses to potential buyers, with the original license being delivered later. In this case, the appellant supplied a fake license to M/s. DCW, enabling duty-free clearance of goods. Statements from individuals involved, including one who sold the license to the appellant, indicated the appellant's knowledge of the license's fake nature.

2. The adjudicating authority found the appellant to be an abettor in the importer's offense of using a fake license for duty exemption. The penalty was imposed based on the appellant's involvement in the transfer/sale of fake DEPB licenses. The Commissioner upheld the penalty, considering the appellant's abetment of the offense committed by M/s. DCW. The appellant contested the reliance on a statement made by an individual while in custody, arguing that the retraction due to coercion rendered the original statement inadmissible.

3. Upon review, it was established that the appellant knowingly supplied fake DEPB scrips and TRAs to M/s. DCW. Despite a retraction, the original statement indicating the appellant's awareness of the fake documents was deemed admissible. The appellant failed to prove coercion in obtaining the statement. The appellant's knowledge of the documents' fake nature implicated him in abetting the importer's offense, making him liable for penalty under Section 112(a) of the Act.

4. The penalty of Rs. 5.00 lakhs imposed by the Commissioner was deemed harsh, leading to a reduction to Rs. 3,00,000. Ultimately, the Commissioner's decision was upheld, dismissing the appeal but with a reduced penalty. The appellant's involvement in facilitating duty exemption fraud through fake DEPB licenses resulted in the penalty under Section 112 of the Customs Act, reflecting the seriousness of abetting such offenses.