Decided on July 10,2008



- (1.) COMMISSIONER of Customs, Kandla, Gandhidham has preferred this appeal by proposing following two questions stated to be questions of law. [a] Whether in the facts and circumstances of the case, Tribunal is justified in confirming the decision of the Commissioner [appeals], who set aside the demand of duty on the ground that the Revenue had not attributed misstatement or suppression of fact despite having asserted fraud committed by the exporter resulting in clearance of imported goods without payment of duty? [b] Whether in the facts and circumstances of the case, the Tribunal was justified in holding that though the case involved fraud committed by the exporter resulting in clearance of imported goods without payment of duty by the importer, Revenue is not entitled to recover the customs duty?
(2.) THE appellant is aggrieved by the order dated 23. 3. 2007 made by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal ). The relevant facts as stated by the appellant in the memorandum of present appeal read as under: "3. 1 One M/s Beni Exports had obtained DEPB license in 2000 of the value of Rs. 94,56,252/ -. On investigations, it was revealed that the said license was obtained by manipulating the export documents and by committing fraud and therefore, the result of the investigation was reported to the Director General of Foreign Trade [dgft] who cancelled the License vide order dated 24/10/2001. In the meantime, M/s Beni Exports had transferred the DEPB scrip No. 3010005328 dated 22/8/2000 to the present respondent ? M/s. Binani Cement who utilized the same to discharge the duty liability for importing goods vide bill of entry no. 02978 dated 3. 10. 2000. That the goods imported against the aforesaid bill of entry were exempted from payment of duty subject to production of a valid DEPB License as per the Notification No. 34/97- Cus dated 7. 4. 1997. "
(3.) ACCORDING to the learned counsel for the appellant once the license was cancelled, it operated from the date of issue of license and therefore, any imports on the basis of such license were liable to duty. The respondent assessee had not paid such duty and was thus liable but the Tribunal had wrongly come to the conclusion that the respondent was not liable by holding that revenue was not entitled to invoke the extended period of limitation available under section 28 of the Customs Act, 1962 (the Act ). That fraud vitiates every act and even if there may be no deliberate act on part of the respondent assessee in commission of fraud yet respondent assessee cannot escape liability to pay duty once the import was found to be on an invalid license.;

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