2016 (10) TMI 153 - AT - Customs

Condonation of delay - TRAs used for clearance of goods duty free - applicability of section 28 of the Customs Act, 1962 - levy of duty, interest and penalty - Held that - the decision in the case of CC Vs. candid Enterprises 2001 (3) TMI 101 - SUPREME COURT OF INDIA has been relied upon. It was held that when the fraud is apparent from the record, limitation should not be a barrier to give a burial death to such fraud. Therefore, delay was condoned. It is elementary principle of juris prudence that fraud and justice are sworn enemies do not dwell together. The fraudulent instrument used in import of goods having been discovered in 2010 upon investigation that debars the imports from the exemption benefit. It is needless to mention that fraud has no legacy to sustain further. Delay condoned - appeal dismissed - decided partly in favor of appellant.

Summary

Issues:
Condonation of technical delay in filing appeal, fraudulent obtaining of TRAs for duty-free clearance, applicability of Section 28 of the Customs Act, 1962, imposition of duty, interest, and penalty, confiscation and penalty imposition, compensation to Revenue, limitation in cases of fraud, cancellation of fraudulent document by JDGFT, justice in cases of fraud.

Condonation of Technical Delay:
The appellant argued that there was no delay in filing the appeal, but as a precaution, they requested condonation of a 585-day delay. The goods were imported with TRAs obtained fraudulently by the seller, unbeknownst to the appellant at the time of import. The Tribunal, following the Supreme Court's precedent, decided to consider the appeal on merits despite the delay due to the apparent fraud involved.

Fraudulent TRAs and Customs Liability:
The agency discovered that the TRAs used by the appellant for duty-free clearance were fraudulently obtained by the seller. The adjudication resulted in duty imposition, interest, and penalty under Section 112 of the Customs Act, 1962. The appellant contended that they were unaware of the fraudulent nature of the TRAs and had acted in good faith to avail benefits under the notification.

Applicability of Section 28 and Confiscation:
The appellant argued that Section 28 of the Customs Act, 1962, was not applicable as there was no conscious knowledge of the fraud during import. They claimed that no adjudication, confiscation, or penalty should be imposed. In contrast, the Revenue contended that duty recovery, along with penalty and interest, was necessary compensation for the customs' losses due to the fraudulent documents used for duty-free imports.

Cancellation of Fraudulent Document and Justice:
The Tribunal noted that the fraudulent document used for imports was canceled by the JDGFT in 2010 after investigation revealed its fraudulent nature. Emphasizing the principle that fraud and justice cannot coexist, the Tribunal upheld the Commissioner (Appeals)'s decision, which included a penalty concession. The Tribunal dismissed the appeal, stating that fraud has no legacy to sustain further and that justice must prevail.

This detailed analysis of the judgment addresses the key issues involved in the case, including the condonation of technical delay, fraudulent obtaining of TRAs, applicability of relevant legal provisions, imposition of duty and penalties, and considerations of justice in cases involving fraud.