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TMI Blog2019 (5) TMI 983X X X X Extracts X X X X X X X X Extracts X X X X ..... before purchase thereof is not sustainable on account of the fact that the various licences issued by the DGFT are being traded by the Broker as trading commodities which is permitted under DGFT policy. It would be practically impossible for any buyer to verify as to whether the person to whom the licence has been issued has been existing or otherwise by conducting enquiries. At the best what buyers could do is to verify the existence of license issued from DGFT. In case at hand, even now the license has not been cancelled by the DGFT in spite of specific request being made by the DRI. The appellant cannot be held responsible for payment of import duty and interest along with the imposition of penalty under the provisions of Customs Act as has been held in the impugned order. Invocation of Extended period for recovery of the Customs Duty - HELD THAT:- It is evident that the appellant has not suppressed any fact from the Department to the extent that the license which was submitted for clearance of import consignment is issued by the DGFT, although the claimed to have been obtained fraudulently by the transferee and utilised on 06/12/11 on ICD Patpargang. The Show Cause Notice has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xport documents and use to obtained various license, namely, DEPB/FPS/VKGUY from DGFT formation across India. These licenses were being sold in the open market through various license brokers. After the sale of all licenses Shri Paresh Dafatry along with the exporters used to subvert the TRA verification process by forging the TRA issuance and verification thereof. In such cases, the syndicate comprises of above persons had also managed to amend the port of registration from Ghojadanga to another EDI ports so that the TRA verification process at the port of export/registration could be manipulated. 3. The name of M/s Nilesh International, who has traded the present FPS scrips, appeared in various other contraventions, from whom the appellant had purchased the licenses at the strength of which imports were effected. The licence, which were utilised by the appellant was obtained from M/s Nilesh International, who has obtained this on the basis of forged export documents through Ghojadanga land customs falling under charge of Commissioner of Customs (Preventive) West Bangal. 4. The Adjudicating Authority accordingly confirmed the demand against the appellant which is being contested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (349) ELT A93(SC). There is nothing on record to conclude that the appellant was in any way involved in alleged fraudulent activities. Learned Adjudicating Authority has also committed an error in law holding that the utilisation of tinted license for payment of duty by the importer appellant is illegal and tantamount to non-payment of duty at the time of import by reason of collusion suppuration of facts, so as to attract extended period of limitation for issuance of Show Cause Notice under Section 28 (4) of the Act. It is also submitted that their case is fully covered by the decision of Hon'ble Punjab & Haryana High Court in case of Commissioner of Customs, Amritsar vs. Vallabh Design Products, reported in 2007 (219) ELT 73 (P &H) wherein under identical facts and circumstances, it has been held that the transferee of DEPB Scrips having obtained the same on payment of full price from open market under the bonafide belief of being genuine coupled with the fact that there is no allegations of mis-representation, collusion or suppression of facts by the appellant extended period under proviso to Section 28 of Customs Act is not invokable. Reliance was also placed on the decision i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19/12/11. The amount of ₹ 16,59,525 was paid as consideration for purchasing of the said license from M/s Nilesh International through Cheque No. 824299 dated 26/12/11 from Yes Bank. The said license was utilised by the appellant towards the import of silk fabrics, vide Bill of Entry No. 5488099 dated 16/12/11. It is not in dispute that this license has been obtained by M/s Nilesh International on the basis of fake export document and also the TRA verification from the port of Registration was also falsified. The Department has taken up the matter for cancellation of this FPS license with DGFT by the DRI on 08.12.2016. However, it appears that the license has not been cancelled by DGFT as yet. In other words, the above FPS license is a genuine licence in the record of DGFT even as of now. In so far as the appellant is concerned they have purchased the license in question from M/s Nilesh International on 26/12/11 on payment through banking channel. As per record the appellant was not involved in the fraud. The contention of the Department that the appellant has obtained the said license without verifying the existence of M/s Nilesh International before purchase thereof is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onnivance or wrongful association of the assessee with the selling dealer or any dealer earlier thereto, no liability can be imposed on the principle of vicarious liability. Law cannot put such onerous responsibility on the assessee otherwise, it would be difficult to hold the law to be valid on the touchstone of articles 14 and 19 of the Constitution of India. 26. The rule of interpretation requires that such meaning should be assigned to the provision which would make the provision of the Act effective and advance the purpose of the Act. This should be done wherever possible without doing any violence to the language of the provision. A statute has to be read in such a manner so as to do justice to the parties. If it is held that the person who does not deposit or is required to deposit the tax would be put in an advantageous position and whereas the person who has paid the tax would be worse, the interpretation would give result to an absurdity. Such a construction has to be avoided. 27. In other words, the genuineness of the certificate and declaration may be examined by the taxing authority, but onus cannot be put on the assessee to establish the correctness or the truthfu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legitimately available to them. It is also worth noticing that the assessee-respondent was never issued any show cause notice before cancelling the DEPB which was obtained by M/s. Parker Industries and obviously the notice was also to be issued to them alone. We are further of the view that notice under Section 28 of the Customs Act could not be issued to the assessee-respondent because a period of six months stipulated by Section 28 of the Customs Act stood already expired and the rights of the parties had been crystallized. The revenue cannot avail the extended period because the assessee-respondent could not be accused of mis-representation, collusion or suppression of facts within the meaning of proviso postulated by Section 28 of the Customs Act. Therefore, there is no merit in this appeal. 10. This judgment was further affirmed by Hon'ble Supreme Court reported in 2007 (218) ELT (349) (P&H). In case of M/s Deep Export vs Commissioner of Customs reported in 2016 (338) ELT 724 (Tri-Del)] it has been held at para 9, 10, 11 that REP license obtained fraudulently by transferee on the forged documents the appellant were not in the knowledge of such fraud cannot be held to be inel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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