COMMISSIONER, CUSTOMS Vs. LEADER VALVES, LTD.

JUDGEMENT

(1.) The revenue has filed three appeals namely CUSAP No. 14, 15 and 17 of 2006 under Sec. 130(1) of the Customs Act,1962 (for brevity 'the Customs Act') by challenging the order dated 5.5.2005, 1.6.2005 and 27.4.2004 respectively passed by the Customs, Excise and Service Tax Appellate Tribunal New Delhi (for brevity 'the Tribunal'). As common question of facts and law have been raised in all these appeals, we decide them by a common order. The revenue has assailed the order passed by the Tribunal on the principal ground that once the Joint Director (General) of Foreign Trade had cancelled the Duty Exemption Pass Book which is commonly known as DEPB Scheme issued to M/s Parker Industries, 184, Dilbagh Nagar, Jalandhar which order was upheld in appeal by the Additional Director General of Foreign Trade then the assessee respondent who had purchased the DPEB from M/s Parker Industries were not entitled to avail any benefit. For the sake of convenience, the facts are being referred from CUSAP No. 15 of 2006.

(2.) The Government of India in order to boost export had announced various concessions including exemption from payment of central excise duty, customs duty and formulation of various schemes under the Import and Export Policy, known as EXIM policy, which is formulated under Sec. 5 of the Foreign Trade (Development and Regulation) Act,1992 (for brevity 'the Act'). DEPB is one of those schemes framed under the EXIM policy which is in the nature of a licence to import material without payment of customs duty and is in the form a pass book. The pass book is issued against exports and fixed percentage of value of exports made is credited in the DEPB pass book which is accounted for against the imports. According to the procedure an application for obtaining DEPB is made to the Joint Director General of Foreign Trade on a prescribed form accompanied by a bank certificate of exports and realisation of export proceedings in addition to other documents. The application for obtaining DEPB can be made even before realisation of export proceedings if the export proceedings are not realised within a period of six months or within the extended period then the DEPB holder is liable to pay an amount equal to DEPB availed alongwith interest at the rate of 24 percent from the date of issue of DEPB till the date of deposit. It is further appropriate to mention that DEPB has been made sale -able and the purchaser can avail the same benefits which could have been availed by the original exporter. The Duty Entitlement Pass Book(s) Scheme reads as under:

(3.) The assessee -respondent No. 1 i.e. M/s Leaders Valves Ltd. was a beneficiary of DEPB scrip No. P/L 3053128 dated 2.1.1998 which was transferred to it by M/s Parker Industries , Jalandhar. The later had obtained the afore -mentioned DEPB scrip fraudulently by forging Bank Certificate of Export Realisation (for brevity 'the BCER') purported to have been issued by Punjab and Sind Bank, Mota Singh Nagar, Jalandhar. On the basis of the forged certificate they applied to the Joint Director General of Foreign Trade, Jalandhar for issuance of transferable Duty Entitlement Pass Book which were then issued to them by the Joint Director General Foreign Trade. On the basis of the afore -mentioned DEPB scrip, the assessee -respondent M/s Leader Valves effected import of goods by payment/off setting import duties against credit available in the said DEPB scrip by utilising the DEPB scrip for import of the goods under Bill of Entry 109 dated 6.1.1998 free of duty in terms of Notification No. 34/97 -Cus dated 7.4.1997. The duty otherwise realisable was Rs. 1,14,860/ -.