(1.) In this appeal the appellants have questioned the correctness of the impugned order -in -original vide which Commissioner of Customs has confirmed the duty demand against them.
(2.) I have heard both sides and gone through the record. The facts are not much in dispute The appellants purchased the DEPB scrips from M/s. Parker Industries and imported Gun Metal Scrap against the same vide Bill of Entry No. 109, dated 16 -1 -1998. The goods were cleared by the Customs authorities. However, later on it revealed that the transferor of the scraps, M/s. Parker Industries, had procured DEPB scrips from the office of the JDGFT Authority, Ludhiana by misrepresentation and fraud and the same were then cancelled vide order dated 16 -1 -2002. This cancellation did not have a retrospective effect.
(3.) Regarding the purchase of DEPB scrips by the appellants and their liability under Section 112 of the Customs Act, Id. Commissioner has observed as under: However, I find nothing on record to infer that M/s. Leader Valves Ltd., S -3&4, Industrial Area, Jalandhar had purchased the freely transferable DEPB scrip otherwise than in a bona fide manner and utilised the same towards debit/exemption of duty and there is nothing to suggest of his having colluded with the exporter who obtained the DEPB scrips by fraudulent manner. Therefore, I do not hold them liable to penal action under Section 112 of the Customs Act, 1962 In the face of these findings Id. Commissioner could not legally order the recovery of the duty under Section 28 of the Customs Act. In this context, the law laid down by the Hon'ble Bombay High Court in the case of Taparia Overseas (P) Ltd. v. Union of India can be read with advantage. In that case the goods were imported by the transferee of the licence for consideration and without knowledge of commission of fraud by the original holder of the licence. But later on licence was cancelled for having obtained by fraud and duty was demanded from the transferee of the licence but the same was set aside by the Court by holding that import having been made under a licence which was valid at the relevant time, having been not suspended or cancelled, the transferee being for consideration, the goods could not be subjected to levy of customs duty. The case of the appellants squarely stands covered by the law laid down in that case, keeping in view the above referred facts and findings of the Commissioner reproduced above, in their favour. Therefore, the impugned order is set aside and the appeal of the appellants is allowed with consequential relief as per law.