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TMI Blog2008 (2) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-2-99 and interest was payable on duty at the appropriate rate. (b) Aggregate value of goods of Rs. 47,79,535.34/- was confiscated under Section 111(o) of the Customs Act, 1962. However, such goods not being available for confiscation, redemption fine was not imposed. (c) Penalty of Rs. 10,00,000/- was imposed under Section 112(a) of the Customs Act, 1962. Cus. Appeal No. CDM-63/2005 Against the Order-in-Original No. Kol/Cus-Port/44/2005 dated 21- 3-05 passed by the ld. Commr. of Customs (Port) raising following demand, the Appellant came in appeal before this forum which was registered as Cus. Appeal Case No. CDM-63/2005 (a) Duty of Rs. 11,89,774/- was levied in respect of 6 (six) consignments imported under forged and fake DEPB No. 02602426 dated 1-2-99 and interest was payable on duty at the appropriate rate. (b) Aggregate value of goods of Rs. 28,06,206/- was confiscated under Section 111(o) of the Customs Act, 1962. However, such goods not being available for confiscation, redemption fine was not imposed. (c) Penalty of Rs. 10,00,000/- was imposed under Section 112(a) of the Customs Act, 1962. Cus. Appeal No. CDM-111/2005 Against the Order-in-Original ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rganas (South), Alipore which was registered as Case No. C- 149/2002. Such complaint was taken cognizance by the ld. Court and a report was submitted before that Court stating that an identical case was reported by CBI for which that agency was called for to submit a report in respect of complaint case filed by the appellant. it was also submitted by him that one, Shri N.K. Jalan and some other persons having colluded with some Customs Officers being accused by the CBI, the appellant was totally innocent. 3.2 The DEPB Scrips being negotiable instrument and the scrips in question having been purchased paying appropriate consideration through account payee cheques and the recipients were identifiable, the appellant should not have been penalized under the law and no duty should have been imposed nor confiscation should have been ordered, 3.3 Ld. Adjudicating Authority totally erred in leving penalty under Section 112 (a) of the Customs Act, 1962 in lieu of confiscation following ratio of judgments in: (i) Commr. of Customs v. D. M. Enterprises -2007 (213) E.L.T. 414; (ii) Universal Steel Agencies v. Commr. of Customs - 2001 (138) E.L.T. 360. 3.4 Proceeding was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued in favour of M/s. Eastern Spinning Mills Industries Ltd., but claiming to have been purchased from market, for discharge of duty liability of Rs. 19,29,460/-. 5.3 In Customs Appeal Case No. CDM-63/2005, it was noticed that the Appellant imported 6 (six) consignments with aggregate value of goods of Rs. 28,06,206/- utilizing fake DEPB Scrips bearing No. 02602426 dated 1-2-99 never been issued in favour of M/s. Ispat Alloys Ltd., but claiming to have been purchased from market, for discharge of duty liability of Rs. 11,89,774/-. 5.4 It was noticed that the Appellant imported 1 (one) consignment with aggregate value of goods of Rs. 8,46,450/- utilizing fake DEPB Scrips bear ing No. 02601998 dated 4-1-99 involved in Customs Appeal Case No. COM 111/2005. It was also found that M/s. Hindalco Industries Ltd. was not issued above DEPB. The questionable scrips were purchased from market and used for discharge of duty liability of Rs. 3,08,933/-. 5.5 Investigation by Revenue revealed that the DEPB Scrips in question were not at all issued in favour of the above named parties. Transfer letters, letter heads and the bank account numbers used to prove transfer of the Scrips ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, on the basis of the finding of the facts without challenging the same, is about the effect of absence of collusion on the part of the appellant, as pointed out earlier, in relation to the availability of the credit under the forged DEPB scrips. But in the decision in United India Insurance (supra), the forgery related to the driving licence of the driver engaged by the insured, but the Insurance Policy was not found to be forged. The question would be different if the document itself, on the strength whereof credit is claimed is forged. In that event, the same cannot be equated with merely an irregularity in the licence of the driver driving the vehicle in relation to the liability of the insurer in relation to a valid insurance policy under the Motor Vehicles Act providing for compulsory insurance to secure third party interest. In this case, the document itself having been found to be forged whether there was collusion or fraud on the part of the appellant in the issue of the DEPB licences/scrips becomes absolutely immaterial and irrelevant since no credit can be derived from a forged DEPB. The credit is made available on the strength of a valid DEPB. If the DEPB is forge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision in the CC, Kandla v. D. M, Enterprises - 2007 (213) E.L.T. 414 (Tri - Ahmd.) and argued that no penalty was livable. In that case, it was held that penalty under Section 112 of the Customs Act, 1962 could not have been imposed in lieu of confiscation of goods. Perusal of Section 112 shows that penalty is imposable under two different sub-clauses, In these appeals before us. The ld. Commissioner has imposed a penalty under Section 112(a) of the Customs Act, 1962, The said Clause (a) mandates that any omission or commission calling for confiscation under Section 111 J facto invites penalty. Also the decision relied upon by the appellants related to imposition of penalty twice under Section 112 of the Act as observed in Paragraph 6 of the order. Therefore, when a forgery rendered a document itself to be null and void having no effects whatsoever due to its non-existence to seek duty credit, that no way grants immunity from penalty. The documents used denied good title over such document, remaining questionable. We got support to come to such conclusion following the decision of the Hon'ble Supreme Court in the case of New India Assurance Co. v. Kalma Others . - 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not barred by limitation and well within the grant of law. 5.13 The Appellants also relied on the decision in the case of Northern Plastics Ltd. v. Hindustan Photo Films Mfg. Co. Ltd. - 1997 (91) E.L.T. 502 (S.C.). The Apex Court has also held in this case that the Tribunal being a creature of the statute, it cannot exceed its authority conferred under the law. For the same reason that the proceeding was to recover the revenue loss using questionable DEPB, such act of the Appellants dragged them to litigation, we may conclude that the authorities have well acted within the statutory grant of express power to proceed against the Appellant and that too within the limitation of the period permitted by law. 5.14 Further reliance was placed by the Appellants in the case of Escorts Limited v. Union of India - 1998 (97) E.L.T. 211 (S. C.). This case laid down the principle that the authorities under statute should act within the limit of their authorities without proceeding otherwise. We did not notice in the present appeals as to whether there was anything excessive exercise of the statutory power by the authorities below to declare the DEPB Scrips used by the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e detected to be fake and forged. Adjudication made on the basis of result of enquiry having been uncontroverted, the Appellant is not entitled to any relief by this forum when Revenue was defrauded of its legitimate dues. 5.17 The stand of the Appellant that their effort of initiating criminal action against the fraudulent persons does not absolve it from duty liability which was legally payable to exchequer for the imports made. We decline to interfere to the order of adjudication without finding legal infirmity for the Revenue loss caused by Appellant using forged and fake DEPB Scrips except to the extent hereinafter indicated relating to penalties. 5.18 Having found facthally that the Appellant had acted on the basis of forged, fake and fabricated document, without bothering to enquire from the Customs Authority, DGFT Authority or the so called DEPB holders as to genuineness of the DEPB scrips, the Appellants can be said to have committed breach of law. Following Apex Court judgment in the case of New India Assurance Co. v. Kamala Others [2001 (4) SCC 342] it may be concluded that since the transferee Appellants have not derived any legal right out of the forged d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some of the transfer documents have been signed by Bank officials purporting to verify the signature of the transferers. However, we find to our utter surprise that the Show Cause Notices issued do not bring out the role of any of the D.G.F.T. officials, Customs officials or the Bank officials in the grant of such D.E.P.B.s issued on the basis of fraudulent shipping documents and Bank remittance papers and subsequent grant of duty exemption of a huge amount at the time of clearance of the impugned imported goods. We also note that this is not an isolated case as there are other similar cases cited in paragraph 3 above. Shri Prakash Shah, the learned Advocate for M/s. De-Nocil had in fact argued that duty exemption should be allowed since the D.G.F.T, and Customs officials had issued the D.E.P.B. and had failed to verify the authenticity of shipping documents and Bank remittance papers. We are of the view that such action and omission on the part of defaulting individual D.G.F.T. officials and Customs officials cannot be a ground for extending duty exemption when the conditions of the exemption notification issued in public interest are not met. Public exchequer cannot be allowed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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