2007 (11) TMI 221 - AT - Customs

Purchase of freely transferable DEPB Scripts (sic) (scrips) from the open market - scrips were procured in a fraudulent manner by the licence holder assessee purchased them in a bona fide manner & there is nothing to suggest they colluded with the other noticees, who obtained the DEPB Scripts by fraudulent means Comm(A) rightly rejected appeal of revenue for imposition of redemption of fine as goods were not available for confiscation penalty u/s 112 & 114 not imposable

Summary

Issues:
Appeal against Order-in-Appeal, Confiscation of DEPB Scripts, Redemption Fine Imposition

Analysis:
The Revenue filed appeals challenging the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Chandigarh. The case involved the respondent purchasing DEPB Scripts from the open market, which were later found to be fraudulently procured. The adjudicating authority confirmed duty demand and observed the liability of goods for confiscation under the Customs Act. However, as the goods were not available, no confiscation order was issued. The Revenue appealed for redemption fine imposition, which was rejected by the Commissioner (Appeals).

The Revenue argued that the respondent obtained forged DEPB Scripts unknowingly, warranting redemption fine. They cited a Tribunal decision supporting redemption fine in such cases. On the other hand, the respondent's counsel reiterated the Commissioner (Appeals) findings and referenced Supreme Court and Tribunal decisions upholding redemption fine imposition in bond execution cases. The adjudicating authority noted the respondent's bona fide purchase of DEPB Scripts and dropped penal proceedings under relevant sections. The goods were unconditionally released, with no evidence of mala fide procurement.

Upon review, the Member found no indication of fraudulent purchase by the respondent or collusion with other involved parties. The adjudicating authority's decision was supported, emphasizing that the goods were released unconditionally and no mala fide intent was established. Citing a Supreme Court case, it was clarified that redemption fine could not be imposed when goods were not available for confiscation or cleared under bond. The Member upheld the impugned orders, rejecting the Revenue's appeals.

In conclusion, the Tribunal dismissed the Revenue's appeals, affirming the decision of the Commissioner (Appeals) regarding redemption fine imposition. The judgment highlighted the lack of evidence supporting fraudulent procurement by the respondent and emphasized the legal principles governing redemption fine in cases of bond execution and confiscation.