2018 (6) TMI 489 - AT - Customs

Principles of natural justice denied - non-speaking order - Mis-declaration of export goods - Advance License Scheme - it was alleged that Advance licences were obtained by mis-declaring the goods exported as 100% Polyester Filament yarn whereas these were actually manmade fibre made from 100% polyester staple fibre - penalty. Held that - It is seen that both the sides have cited plethora of case laws which are relevant to the facts of the case. The impugned order does not examine any of arguments or the case law. It grants relief by just stating that there is no need to discuss the case law. To that extent the impugned order is not a speaking order. The grounds of review are very limited on this issue. There is merit in the grounds of appeal as the impugned order does not deal with the case laws on the issue but relies on the same. It is not clear as to which case laws he has relied upon and for what reasons. As can be seen from arguments of both sides there are plethora of case law on the issue and Commissioner was required to examine the same and state specifically why he agrees or disagrees with them. The impugned order in so far as it relates to the appeal filed by revenue against the transferee importers is concerned is not a speaking order and is therefore set aside and the matter remanded to the original adjudicating authority to determine the issue afresh with cogent reasons and speaking order - matter on remand. Penalty u/s 112(a) and 114(i) of the CA 1962 - Held that - The persons whose signatures were forged were stated to be scientists and in-charge of SASMIRA, authorized signatory of steamer agents, appraisers, IAO, Clerks, Assistant Collectors Preventive Officers etc. in his statement he also stated that besides forging the signatures on bills of lading and SASMIRA test report, he had also forged the signatures of the Appraising Officers in the Part F of the DEEC book for the purpose of auditing. Shri Ashok Pokharkar had also admitted in his statement that Shri Balchander V. Jhadav had forged the documents - the penalty on Sh Jhadav is fully justified. Part matter on remand - partly in favor of Revenue.

Summary

Issues Involved:
1. Imposition of penalty on the employee of Anmol Shipping Agency.
2. Demand of duty from importers who were bonafide buyers of DEEC licenses obtained through fraud.
3. Legality of absolving transferee importers from duty liability.
4. Examination of case laws and judicial pronouncements cited by transferee importers.

Detailed Analysis:

1. Imposition of Penalty on the Employee of Anmol Shipping Agency:
The employee, Shri Balchander V. Jhadav, appealed against the imposition of a penalty of ?4,00,000 under sections 112(a) and 114(i) of the Customs Act, 1962. He argued that he was merely following the instructions of his superior and was not involved in any act of importation. However, his statements recorded under section 108 of the Customs Act revealed that he had forged signatures of various officials on the instructions of his employer. The Tribunal found his involvement in forgery and fabrication of documents, justifying the penalty imposed on him. Consequently, his appeal was dismissed.

2. Demand of Duty from Importers Who Were Bonafide Buyers of DEEC Licenses Obtained Through Fraud:
The revenue appealed against the decision of the Adjudicating Authority, which had dropped the demand of duty from various importers who had imported goods using fraudulently obtained DEEC licenses. The importers were deemed bonafide transferees and were not aware of the forgery or fraud committed while obtaining the licenses. The Tribunal noted that the importers were not involved in the forgery or fraud and were unaware of the fraudulent nature of the licenses.

3. Legality of Absolving Transferee Importers from Duty Liability:
The Adjudicating Authority had absolved the transferee importers of all charges, citing various judicial pronouncements. However, the Tribunal found that the Adjudicating Authority did not discuss any of these judgments in detail. The Tribunal emphasized that the government cannot be deprived of its rightful duty due to fraud committed by the seller of the license. It relied on several judicial precedents, including decisions from the Hon'ble Supreme Court and High Courts, which established that fraud nullifies everything and that duty can be demanded from the transferee of a forged license. The Tribunal highlighted the principle of "Caveat Emptor" (buyer beware), stating that the buyer of a license should take precautions to verify its genuineness.

4. Examination of Case Laws and Judicial Pronouncements Cited by Transferee Importers:
The Tribunal noted that the impugned order did not examine the case laws cited by the transferee importers. The Adjudicating Authority granted relief without discussing the relevant judicial pronouncements. The Tribunal found merit in the revenue's appeal, emphasizing that the impugned order was not a speaking order. It remanded the matter to the original adjudicating authority to re-examine the issue afresh, with detailed reasons and a speaking order, considering the plethora of case laws cited by both sides.

Conclusion:
The Tribunal allowed the revenue's appeal by way of remand, directing the original adjudicating authority to re-examine the duty liability of transferee importers and issue a speaking order. The appeal of Shri Balchander V. Jhadav was dismissed, upholding the penalty imposed on him for his involvement in forgery and fabrication of documents.