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2016 (11) TMI 753 - AT - CustomsDEPB scrip - fraudulent availment of DEPB scrip on the strength of forged shipping bills and BRCs - Held that - M/s. Sun Chemicals has purchased the DEPB scrips from market. The said DEPB scrips were obtained by submitting forged shipping bills and BRCs to the office of DGFT by Shri R.C. Jain. Appellants have strongly relied on the decision of the Tribunal in the case of Sumit Wool Processors (2015 (10) TMI 329 - CESTAT MUMBAI). On the other hand, revenue has relied on the decision of Dow Agrosciences 2011 (5) TMI 677 - CESTAT, MUMBAI . We find that in the case of Sumit Wool Processors the facts were that DEPB scrips were obtained by overvaluation of export goods. In the instant case, DEPB scrips have been obtained by submitting forged shipping bills to DGFT. The Tribunal in the case of Sumit Wool Processors has considered the decision of Dow Agrosciences and differentiated primarily on the ground that in the case of Dow Agrosciences the DEPB scrips was obtained as a result of racket of forgery of export documents which is not so in the case of Sumit Wool Processors. In the instant case, we find that the DEPB scrips have been obtained by forging the shipping bill and BRC and therefore, the decision of Sumit Wool Processors can be distinguished on that count. We find that in identical circumstances where DEPB scrips purchased by the importer appellants were obtained by using forged shipping bills/BRCs, the recovery of duty was upheld by the Tribunal in the case of Dow Agrosciences. The decision of the Tribunal in the case of Sumit Wool Processors cannot be applied as the facts in the instant case. However the decision of the Tribunal in the case of V.M. Tex P. Ltd, Dow Agrosciences are in identical situation and therefore, relying on these decisions, the appeal of Sun Chemicals is dismissed. Imposition of penalty on Shri R.C. Jain - Held that - The role of Shri R.C. Jain is limited to submitting forged BRC/shipping bill before the DGFT and obtaining the DEPB scrips from DGFT. Ld. counsel for Shri R.C. Jain has relied on the decision of the Hon ble High Court of Gujarat in the case of Shah Alloys 2010 (3) TMI 781 - GUJARAT HIGH COURT where it was held that - penalty against Shri R.C. Jain cannot be sustained. Appeal allowed - decided in favor of appellant.
Issues:
1. Import of goods using fraudulently obtained DEPB scrip. 2. Liability of M/s. Sun Chemicals for penalty under Customs Act. 3. Liability of Shri R.C. Jain for penalty under Customs Act. Analysis: Issue 1: Import of goods using fraudulently obtained DEPB scrip The case involved M/s. Sun Chemicals importing goods using DEPB scrips obtained fraudulently by Shri R.C. Jain through forged shipping bills and BRCs. The Tribunal differentiated this case from precedent cases where DEPB scrips were obtained through overvaluation of export goods. The Tribunal held that the DEPB scrips in this case were acquired by forgery, justifying the penalty and confiscation imposed. Issue 2: Liability of M/s. Sun Chemicals for penalty M/s. Sun Chemicals argued they were not involved in fraud and the DEPB license used for imports was valid at the time. They cited Tribunal and High Court decisions for similar cases. However, the Tribunal found that the DEPB scrips were indeed obtained through forgery, distinguishing this case from the cited precedents. The penalty imposed under Section 112A of the Customs Act was upheld based on the fraudulent acquisition of DEPB scrips. Issue 3: Liability of Shri R.C. Jain for penalty Shri R.C. Jain's defense was that any fraud committed was before the DGFT, not customs. Citing High Court decisions, it was argued that customs authorities are not competent to take action regarding DEPB licenses. The Tribunal, relying on legal interpretations, found that the penalty against Shri R.C. Jain could not be sustained as the forgery of DEPB licenses fell under the domain of DGFT, not customs. The appeal of Shri R.C. Jain was allowed based on these findings. In conclusion, the Tribunal dismissed the appeal of M/s. Sun Chemicals based on the fraudulent acquisition of DEPB scrips, while allowing the appeal of Shri R.C. Jain due to the jurisdictional limitations of customs authorities in cases of DEPB license forgery. The judgment provides a detailed analysis of the legal principles and precedents applicable to the issues at hand, ensuring a comprehensive understanding of the decision.
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