2016 (12) TMI 705 - AT - Customs

Illicit import of RBD Palmolein - DEPB scheme - fake and forged DEPB licences - whether the clearance of imported goods by utilization of fake/forged DEPB licences are in order and whether extended period of duty demand is sustainable and if both these are upheld, whether imposition of penalty is in order? - Held that - We note from the very same Commissionerate another appellant viz. M/s.DCW Ltd. 2016 (2) TMI 387 - CESTAT CHENNAI has contested this issue and held that buyer has no remedy against the seller and takes all risks of defect and based on the principle of Caveat Emptor laid down by the Supreme Court, the appeal filed by M/s.DCW Ltd. the demands were confirmed. Extended period of limitation - Held that - While we agree that the SCN has not made a connection with regard to the fake and forged licences and guilty mind of the appellants, we are of the view that since we have taken a decision in the case of DCW Ltd., there is no reason for us to deviate from the same, and accordingly invocation of extended period is also upheld. Imposition of penalties - Held that - While we are following the precedence in the case of DCW Ltd. in so far as the confirmation of demand of duty is concerned, we do not wish to follow this as a precedence for the purpose of imposition of penalty for the reason that in those cases, the penalty was not under Section 114A but in the instant appeals, the penalties are under Section 114A where there is no discretion for the Tribunal to impose any lesser penalty. The appellant made a plea before the Bench that they had filed police complaint and got the offenders arrested and it was the department duty to have taken up the matter further but failed on this score. This issue has also been dealt by the Tribunal s decision in the case of DCW Ltd. and therefore there is no reason for us to deviate from the said view taken by us. Demand of duty is upheld - Invocation of longer period is upheld and the penalties are upheld. Appeal dismissed - decided against appellant-assessee.

Summary

Issues:
1. Duty demand and penalties imposed on appellants for importing goods against fake licenses.
2. Allegation of collusion and fraud by the authorities.
3. Validity of extended period for duty demand.
4. Imposition of penalties under Section 114A of the Customs Act.
5. Appellants' plea regarding police complaint and departmental duty.

Analysis:
1. The case involved M/s. Glory Impex and associated firms importing RBD Palmolein against fake licenses, resulting in duty demand and penalties. The Revenue alleged that the licenses were procured from unauthorized sources, leading to duty evasion. Show cause notices were issued, and duties were confirmed with penalties imposed under Section 114A of the Customs Act. The goods were confiscated, and appeals were filed against the orders.

2. The appellants argued that they had no knowledge of the licenses being fake or forged, and the engagement of brokers did not imply collusion. They contended that the authorities relied on presumptions and assumptions without concrete evidence of their involvement in the fraud. The appellants emphasized the lack of allegations regarding their awareness of the forged licenses in the show cause notices.

3. The issue of the extended period for duty demand was raised, questioning the sustainability of invoking it without establishing a direct link between the appellants' intent and the procurement of fake licenses. The Tribunal referenced a previous case involving a similar matter and upheld the extended period based on established precedents, despite the absence of explicit allegations connecting the appellants to the fraudulent licenses.

4. Regarding the imposition of penalties under Section 114A, the Tribunal differentiated between confirming duty demands based on precedents and exercising discretion in penalty imposition. While following the decisions in duty demands, the Tribunal noted that penalties under Section 114A allowed no discretion, leading to upholding the penalties imposed on the appellants.

5. The appellants raised a plea regarding filing a police complaint and the department's duty to pursue the matter further. However, the Tribunal cited a previous decision related to a similar issue and maintained consistency in its stance, dismissing the appellants' plea and upholding the duty demand, extended period, and penalties imposed.

In conclusion, the Tribunal dismissed all appeals, upholding the duty demand, extended period, and penalties imposed on the appellants based on the findings and precedents cited during the proceedings.