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TMI Blog2011 (2) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... Goel and Ajay Kumar Mittal, JJ. REPRESENTED BY : S/Shri Mohan Jayakar with Karan Adik, Advocates, for the Appellant. [Order per : Adarsh Kumar Goel, J.]. - This appeal has been filed by the assessee under Section 130 of the Customs Act, 1962 (for short, "the Act") against the order dated 8-10-2010 in Customs Appeal No. 576/2006 [2011 (267) E.L.T. 57 (Tri. - Del.)] passed by the Customs, Excise and Service Tax Appellate Tribunal, Principal Bench at New Delhi claiming following substantial questions of law :- "A. Whether a concurrent Bench of the CESTAT (the 2nd Respondent) could take a differing view on an issue which was same as involved in the other Judgments of the concurrent Bench? B. Whether an order of the full Bench of the Tribunal was binding on a two member Bench of the Tribunal wherein the law involved was the same and whether a two member Bench could have ignored the binding judgments of the Full/Larger Bench of the Tribunal? C. Whether the 2nd Respondent ought to have followed the law as laid down by the Hon'ble Supreme Court and the various High Courts in the various cases having identical issues involved, as cited therein? D. Whether a License obtained on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was raised against the appellant vide Order-in-Original dated 4-10-2005. The said order was affirmed in appeal and has been further affirmed on second appeal by the Tribunal. The Tribunal rejected the contention that on the date of cancellation of DEPB Scrip i.e. 2-1-2003, the appellant having already taken the benefit, the same could not be withdrawn. Further contention that limitation for taking action under Section 28 of the Act had expired and the extended limitation under the proviso could not be invoked in absence of misstatement or suppression being attributed to the appellant was also rejected. The Tribunal followed the judgment of this Court in the case of the assessee itself in respect of different DEPB Scrips in Friends Trading Co. and Another v. Union of India - 2010 (254) E.L.T. 652, which in turn refers to earlier judgment of this Court dated 1-9-2007 in CUSAP No. 27 of 2008 M/s. Munjal Showa Limited v. Commissioner of Customs and Central Excise (Delhi (IV), Faridabad [2009 (246) E.L.T. 18 (P & H)] 3. We have heard learned counsel for the appellant. 4. With reference to proposed questions of law A to E, it was submitted that benefit taken on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged document could be allowed to be retained. The principle laid down in the judgment relied upon which has been followed in other judgments cannot, thus, apply to the case of the present nature where benefit has been taken on the basis of a forged document. 13. In Sneha Sales Corporation (supra), import licence was cancelled after the import and following the judgment in East India Commercial Company (supra), it was held that on the date of clearance of goods, the licence was not non est. Both the judgments deal with the confiscation and not with the payment of duty. In Sampat Raj Dugar (supra) also the situation was identical as in East India Commercial Company (supra). xx xx xx xx xx 16. On the other hand, a Division Bench of this Court in Golden Tools International v. Joint DGFT, Ludhiana, 2006 (199) E.L.T. 213 after referring to the judgments of the Hon'ble Supreme Court in S.P. Chengalvaraya Naidu v. Jagannath, AIR 1994 SC 853 and Commissioner of Customs v. Essar Oil Ltd., (2004) 11 SCC 364 observed :- "12. We are of the view that both the petitions are bereft of any merit. The entire claim of the petitioners was based on falsehood. It is not in dispute th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court considered the concept of resulting trust and equity. It was held that where a person earned properties by smuggling or other illegal activities, all such properties whether standing in his name or in the name of his relations or associates will be forfeited to the State. Though, the question herein is not of forfeiture of property illegally acquired but on parity, a person committing fraud is required to restore the benefits taken and cannot be heard to say that since the benefit was transferred to an innocent person and since an innocent person cannot be punished, such a person should also be exonerated." 18. ……Even as per scheme of exemption, exemption was subject to export proceedings being realised within six months, which in the present case, were never realised……………." 19. It is settled principle of common law that a purchaser steps into the shoes of the seller and does not acquire better title than the seller. This principle has also been recognized under Section 27 of the Sales of Goods Act, 1932. 20. The charge of duty is on the goods under Section 12 of the Act unless a case of exemption is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firming the confiscation of duty demand along with the interest under Section 28AA of the Act and affirmed the order of confiscation of goods under Section 111(o) observing that since the DEPB licence was null and void ab-initio, no credit of duty was available to the appellants against those scrips and the paramount condition under the Notification was not fulfilled by the importer and held the appellants liable to pay duty. M/s. Friends Trading Co. have also raised the issue of limitation, I find that in the present case, the DEPB Scrip that was used by them towards debit of duty has been cancelled ab-initio by Jt. DGFT, Ludhiana as the same was obtained by forging and mis-declaration. In the light of the Hon'ble Supreme Court Judgment in the case, the Commissioner of Customs v. Candid Enterprises, 2001 (130) E.L.T. 404 (S.C.), it is clear that fraud nullifies everything and limitation does not apply. In view of cited case, limitation period doesn't apply in the present case and duty is recoverable from M/s. Friends Trading Co. Majith Mandi, Amritsar.'' The Commissioner (Appeals) observed :- ".... I find that this aspect of limitation also stand answered in para 4 of the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any case, the proviso is not limited to action of an importer who comes forward to take advantage on the basis of fraudulently obtained or forged DEPB, it also covers action of the predecessor of the importer. Importer who steps into the shoes of seller of forged document does not stand on better footing and cannot be allowed to retain benefit illegally obtained. Taint attaching to the document on the basis of which benefit is taken is not washed of. Fraud or suppression continues if document is not genuine. Any other interpretation will defeat the intendment of the proviso to Section 28 and will enable fraud to be perpetuated without any remedy. Even if case of criminal liability or penality may stand on different footing, purchaser or successor of fraudulently obtained DEPB stands in the same position as his predecessor. If the extended period of limitation could be invoked against the original holder of fraudulent or forged DEPB, the same could be invoked against successor or purchaser. The judgments relied upon on behalf of the petitioner are distinguishable. The matter is covered by view taken by this Court earlier which has been followed by the Tribunal. Thus, we are unable t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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