Custom, Excise & Service Tax Tribunal
M/S Alpha Chemie Sapthagiri vs Commissioner Of Customs, Mumbai on 10 May, 2016
IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. IV APPEAL NO. C/1122/04, C/56, 647, 743 & 744/05 (Arising out of Order-in-Original No. 78/2004/CAC/CENVAT credit/RJM dated 23.08.2004 passed by the Commissioner of Customs (Adjn.), Mumbai-I.) For approval and signature: Honble Mr. Ramesh Nair, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) =====================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy : Seen
of the order?
4. Whether order is to be circulated to the Departmental : Yes
authorities?
=====================================================
M/s Alpha Chemie Sapthagiri
M/s Nilkamal Ltd.
M/s Nilkamal Crates & Bins
M/s Kamtee Imaging Pvt. Ltd.
M/s Kamtee India Photographic Co. Pvt. Ltd.
Appellant
Vs.
Commissioner of Customs, Mumbai
Respondent
Appearance:
Shri D.H. Nadkarni, Advocate
Shri T. Viswanathan, Advocate
Ms. Aparna Hirandagi, Advocate
for Appellants
Shri M.K. Sarangi, Jt. Commr. (A.R.)
Shri D.K. Sinha, Assistant Commr. (A.R.)
Shri Kamal Puggal, Assistant Commr. (A.R.)
for Respondents
CORAM:
HONBLE SHRI RAMESH NAIR, MEMBER (JUDICIAL)
HONBLE SHRI C.J. MATHEW, MEMBER (TECHNICAL)
Date of Hearing: 10.05.2016
Date of Decision: .2016
ORDER NO.
Per: Ramesh Nair:
The common facts in all these appeals are that the appellants have purchased DEPB licence from open market on payment of consideration. Against such DEPB licences they have imported various goods by debiting the duty in the DEPB scrips without payment of duty in cash. The Customs department after verification of the DEPB licences allowed the clearance of the goods. Much after import of the goods the DRI has started the investigation and found that all the DEPB licences purchased by the appellants were obtained by various persons fraudulently against submitting the fake/forged documents to the DGFT. Therefore the present proceeding was initiated against all the appellants, the demand was confirmed against the present appellants on the ground that the DEPB licences against which the goods were imported obtained fraudulently. Import against the invalid DEPB licences was not entitled for exemption provided under the DEPB licence, therefore, the duty forgone/debit in the DEPB licence is recoverable. Aggrieved by the Order-in-Original the appellants filed these appeals.
2. Learned Counsel for the appellants submits that the appellants have purchased the DEPB licence bonafidely from the market and paid the consideration for such purchase of DEPB licences. At the time of purchase DEPB licence was valid. It is the persons who fraudulently obtained the DEPB licence who have submitted the fake documents to the DGFT and the appellants are not parties to that act of fraud. The appellants had purchased DEPB licence which had been issued validly by the DGFT. The appellant-importer at the time of filing of Bills of Entry produced the DEPB licence to the Customs Authority who after getting satisfied cleared the goods under the DEPB licence, therefore, right from purchase of DEPB licence till the clearance of imported goods, there was no occasion for the appellant to know whether the said DEPB licence were obtain fraudulently by some other person. Therefore, even if it is established that DEPB licence were obtained by some persons fraudulently from DGFT, the appellants-importers cannot be held responsible. He submits that at the time of import and clearance of the goods under the DEPB licence, the DEPB licence were valid therefore import clearance against the valid DEPB licence cannot be questioned. He submit that the issue has been settled in detail in the case of Sumit Wool Processors & Others Vs. Commissioner of Customs, Nhavasheva [2015-TIOL-2090-CESTAT-MUM]. In other identical case of Ineos ABS India Ltd. & Others Vs. Commissioner of Customs, Kandla [2015-tiol-2891-CESTAT-AHM] this Tribunal consistently held that the importer being bonafide buyer of DEPB, duty cannot be demanded from the importer.
3. On the other hand Shri D.K. Sinha, Shri M.K. Sarangi, Shri Kamal Pugal learned ARs appearing on behalf of the Revenue reiterates the findings of the impugned order.
4. We have carefully considered the submission made by both sides.
5. We find, there is no dispute that all the appellants have imported the goods by clearing the same against DEPB licence which were purchased by the appellant from the open market against proper payment of the consideration to the seller of the DEPB licence, while purchasing of DEPB licences and even at the time of import the DEPB licence was valid in the hands of the appellants-importers. Therefore, the appellants-importers cannot be made responsible for any fraud committed by some other person for obtaining the DEPB licence from DGFT. On this issue much water has flown. The Division Bench of this Tribunal consistently held that the duty cannot be demanded from the importer who is the bonafide buyer of the DEPB licence even though the licence obtained fraudulently by some other persons. In the case of Sumit Wool Processors & Others (supra) this Tribunal passed the following orders:-
8. We find that duty benefits under Notifications 40/2006 and 89/2005 are sought to be denied. It would be relevant to refer to Notification no. 40/2006-Cus dated 1/5/2006 which relates to material imported against DFIA licenses as well as Notification No. 89/2005-Cus dated 4/10/2005 which relates to the DEPB Scheme as reproduced below:
Notification No. 40/2006-Cus., dated 1-5-2006 Duty free import authorisation Exemption to materials imported thereagainst In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts materials imported into India against a Duty Free Import Authorisation issued in terms of paragraph 4.4.1 and 4.4.2 of the Foreign Trade Policy (hereinafter referred to as the said authorisation) from the whole of the duty of Customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and from the whole of the additional duty, safeguard duty and anti-dumping duty leviable thereon, respectively, under sections 3, 8 and 9A of the said Customs Tariff Act, subject to the following conditions namely :-
(i) that the description, value and quantity of materials imported are covered by the said authorisation and the said authorisation is produced before the proper officer of customs at the time of clearance for debit :
Provided that in respect of resultant product specified in paragraph 4.55.3 of the Handbook of Procedures (Vol. I) of the Foreign Trade Policy, the materials permitted in the said authorisation or a duty free import authorisation for intermediate supply, as the case may be, shall be of the same quality, technical characteristics and specifications as the materials used in the said resultant product.
Provided further that in respect of the said resultant product the exporter shall give declaration with regard to the quality, technical characteristic and specifications of materials used in the shipping bill;
(ii) that where import takes place after fulfilment of export obligation, the shipping bill number(s) and date(s) and quantity and Free on Board (FOB) value of the resultant product are endorsed on the said authorisation :
Provided that where import takes place before fulfilment of export obligation, the quantity and FOB value of the resultant product to be exported are endorsed on the said authorisation;
(iii) that the importer at the time of clearance of the imported materials executes a bond with such surety or security and in such form and for such sum as may be specified by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, binding himself to pay on demand an amount equal to the duty leviable, but for the exemption contained herein, on the imported materials in respect of which the conditions specified in this notification have not been complied with, together with interest at the rate of fifteen per cent per annum from the date of clearance of the said materials :
Provided that bond shall not be necessary in respect of imports made after the discharge of export obligation in full;
(iv) that the imports and exports are undertaken through seaports at Mumbai, Kolkata, Cochin, Magdalla, Kakinada, Kandla, Mangalore, Marmagoa, Chennai, Nhava Sheva, Paradeep, Pipavav, Sikka, Tuticorin, Visakhapatnam, Dahej, Mundhra, Nagapattinam, Okha, Bedi (including Rozi-Jamnagar), Muldwarka, Porbander, Dharamatar and Vadinar or through any of the airports at Ahmedabad, Bangalore, Bhubaneswar, Mumbai, Kolkata, Coimbatore, Delhi, Hyderabad, Jaipur, Chennai, Srinagar, Trivandrum, Varanasi, Nagpur, Cochin, Rajasansi (Amritsar) and Lucknow (Amausi) or through any of the Inland Container Depots at Agra, Bangalore, Coimbatore, Delhi, Faridabad, Gauhati, Guntur, Hyderabad, Jaipur, Jallandhar, Kanpur, Ludhiana, Moradabad, Nagpur, Pimpri (Pune), Pitampur (Indore), Surat, Tirupur, Varanasi, Nasik, Rudrapur (Nainital), Dighi (Pune), Vadodara, Daulatabad (Wanjarwadi and Maliwada), Waluj (Aurangabad), Anaparthy (Andhra Pradesh), Salem, Malanpur, Singanalur, Jodhpur, Kota, Udaipur, Ahmedabad, Bhiwadi, Madurai, Bhilwara, Pondicherry, Garhi Harsaru, Bhatinda, Dappar (Dera Bassi), Chheharata (Amritsar), Karur, Miraj, Rewari, Bhusawal, Jamshedpur, Surajpur, Dadri, Tuticorin, Kundli, Bhadohi, Raipur, Mandideep, Durgapur and Babarpur or through the Land Customs Station at Ranaghat, Singhabad, Raxaul, Jogbani, Nautanva (Sonauli), Petrapole, Mahadipur, Nepalganj Road, Dawki, Agartala, Sutarkhandi, Amritsar Rail Cargo and Attari Road or Special Economic Zone as specified in the notification issued under section 76A of the Customs Act, 1962 (52 of 1962).
Provided that the Commissioner of Customs may, by special order or by a Public Notice and subject to such conditions as may be specified by him, permit import and export from any other seaport/airport/inland container depot or through any land customs station;
(v) that the export obligation as specified in the said authorisation (both in value and quantity terms) is discharged within the period specified in the said authorisation or within such extended period as may be granted by the Regional Authority by exporting resultant products, manufactured in India which are specified in the said authorisation and in respect of which facility under rule 18 (rebate of duty paid on materials used in the manufacture of resultant product) or sub-rule (2) of Rule 19 of the Central Excise Rules, 2002 or CENVAT credit under CENVAT Credit Rules, 2004 in respect of materials imported/procured against the said authorisation has not been availed :
Provided that an Advance Intermediate authorisation holder shall discharge export obligation by supplying the resultant products to the exporter in terms of paragraph 4.1.3 (ii) of the Policy;
(vi) that the importer produces evidence of discharge of export obligation to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, within a period of thirty days of the expiry of period allowed for fulfilment of export obligation, or within such extended period as the said Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may allow;
(vii) that exempt materials shall not be disposed of or utilised in any manner, except for utilisation in discharge of export obligation, before the export obligation under the said authorisation has been discharged in full;
(viii) that where the Bond filed under condition (iii) against the said authorisation has not been redeemed by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, the unutilised material may be transferred to any other manufacturer for processing under actual user condition after complying the central excise procedure relating to job work;
(ix) that in relation to the said authorisation issued to a merchant-exporter, -
(a) the name and address of the supporting manufacturer is specified in the said authorisation and the bond required to be executed by the importer in terms of condition (iii) shall be executed jointly by the merchant-exporter and the supporting manufacturer binding themselves jointly and severally to comply with the conditions specified in this notification; and
(b) exempt materials are utilised in the factory of such supporting manufacturer for discharge of export obligation and the same shall not be transferred or sold or used for any other purpose by the said merchant-exporter until the export obligation specified in condition (v) has been discharged in full.
After discharge of export obligation as specified in 2. condition (v) of paragraph 1, the Regional Authority shall permit transfer of the said authorisation and/or the goods imported under it subject to such conditions as may be specified.
Where the materials are found defective or unfit for use, 3. the said materials may be re-exported back to the foreign supplier within three years from the date of payment of duty on the importation thereof :
Provided that at the time of re-export the materials are identified to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, as the materials which were imported.
Notification No. 89/2005-Cus., dated 4-10-2005 Duty Entitlement Pass Book - Exemption to imports thereunder In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of description specified in column (2) of the Table below, when imported into India, -
(a) from so much of duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table;
(b) from so much of additional duty leviable thereon under section 3 of the said Customs Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table;
subject to the following conditions, namely :-
(i) that the importer has been issued a Duty Entitlement Pass Book by the Licensing Authority in terms of paragraph 4.3 or paragraph 7.9 of the Foreign Trade Policy;
(ii) that the importer has been permitted credit entries in the said Duty Entitlement Pass Book by the Licensing Authority at the rates notified by the Government of India in the Ministry of Commerce and Industry for the products exported;
(iii) that the said Duty Entitlement Pass Book is produced before the proper officer of Customs for debit of the duties leviable on the goods, but for exemption contained herein :
Provided that exemption from duty shall not be admissible if there is insufficient credit in the said Duty Entitlement Pass Book for debiting the duty leviable on the goods, but for this exemption.
(iv) the said Duty Entitlement Pass Book shall be valid for twenty four months from the date of issue or such extended period as may be granted by the Licensing Authority for import and export only at the port of registration which shall be one of the sea ports at Mumbai, Kolkata, Cochin, Magdalla, Kakinada, Kandla, Mangalore, Marmagoa, Chennai, Nhava Sheva, Paradeep, Pipavav, Sikka, Tuticorin, Visakhapatnam, Dahej, Mundhra, Nagapattinam, Okha, Bedi (including Rozi Jamnagar), Muldwarka and Porbander or through any of the airports at Ahmedabad, Bangalore, Bhubaneswar, Mumbai, Kolkata, Coimbatore, Delhi, Hyderabad, Jaipur, Chennai, Srinagar, Trivandrum, Varanasi, Nagpur, Cochin and Rajasansi (Amritsar) or through any of the Inland Container Depots at Agra, Bangalore, Coimbatore, Delhi, Faridabad, Gauhati, Guntur, Hyderabad, Jaipur, Jallandhar, Kanpur, Ludhiana, Moradabad, Nagpur, Pimpri (Pune), Pitampur (Indore), Surat, Tirpur, Varanasi, Nasik, Rudrapur (Nainital), Dighi (Pune), Vadodara, Dulatabad (Wanjarwadi and Maliwada), Waluj (Aurgangabad), Anaparthy (Andhra Pradesh), Salem, Malanpur, Singanalur, Jodhpur, Kota, Udaipur, Ahmedabad, Bhiwadi, Madurai, Bhilwara, Pondicherry, Garhi Harsaru, Bhatinda, Dappar (Dera Bassi), Chheharata (Amritsar), Karur, Miraj, Rewari, Bhusawal, Jamshedpur, Surajpur, Dadri and Tuticorin or through the Land Customs Station at Ranaghat, Singhabad, Raxaul, Jogbani, Nautanva (Sonauli), Petrapole and Mahadipur or Special Economic Zone as specified in the notification issued under section 76A of the Customs Act, 1962 (52 to 1962) Provided that where the expiry of the Duty Entitlement Pass Book falls before the last day of the month, such Duty Entitlement Pass Book shall be deemed to be valid till the last day of the said month :
Provided further that the Commissioner of Customs may, by special order and subject to such conditions as may be specified by him, permit imports and exports from any other sea port, airport, inland container depot or through any land customs station;
(v) that where the importer does not claim exemption from the additional duty of customs leviable under section 3 of the Customs Tariff Act, 1975 (51 of 1975), he shall be deemed not to have availed the exemption from the said duty for the purpose of calculation of the said additional duty of customs;
(vi) that the importer shall be entitled to avail the drawback or CENVAT credit of additional duty lveiable under section 3 of the said Customs Tariff Act against the amount debited in the said Duty Entitlement Pass Book;
(vii) that where benefit of exemption from duty is claimed by a person, who is not a Duty Entitlement Pass Book holder, such benefit shall be permissible only against specific amount of credit, not being a provisional credit, transferred by a Duty Entitlement Pass Book holder to such person.
This notification shall have effect upto and inclusive of 2. the 31st day of December, 2005.
TABLE S. No. Description of goods Standard rate Additiona Duty rate (1) (2) (3) (4)
1. Goods other than edible oils Nil Nil
2. Edible Oils 50% of applied rate of duty 50% of applied rate of additional duty In the first Notification, we find no restriction on the transferee for import of goods on the basis of licenses transferred to him. The only condition applicable to the transferee is in para (2) that benefit will be allowed only if the Certificate bears endorsement of transferability by the Licensing Authority. Similarly in the second notification 89/2005-Cus relating to DEPB, the only condition relevant to the importer is condition No. (vii) which states that where benefit of exemption of duty is claimed by the person who is not Duty Entitlement Passbook Holder, such benefit shall be permissible only against specific amount of credit transferred by the DEPB holders.
8.2 Having noted that in terms of the notifications there is no failure on the part of transferees availing duty benefits under these schemes, we may see whether there was any failure in observing the procedure for transferability of the License/material imported against such scrips. The transferability is prescribed in para 127 of the Hand Book of Procedures. Sub para (iii) of para 127 states that :
127(i) After export obligation has been fulfilled, export proceeds realised and the BG/LUT redeemed and subject to fulfilment of other conditions as laid down in paragraph 67 of the Policy and Paragraph 126 of the Handbook of Procedures, the value based quantity based licence holder may transfer:-
(a) The licence in full if no imports have been made;
(b) The licence in part excluding the quantity and value of imports already made; and
(c) The materials or the balance thereof already imported.
(ii) No right of transferability shall accrue unless the conditions laid down in paragraph 67 of the Policy and paragraph 126 of the Handbook have been fulfilled;
(iii) After redemption of the BG/LUT the licencing authority shall endorse and allow the transferability on the permissible licenses against which the imports have not been made or have been made partially.
From the above, it is clear that transferability is allowed after endorsement to that effect by the licensing authority i.e. DGFT. We were shown documents which are Applications made for transfer of the license. The documents accompanying the application include shipping bills verified by the Customs authorities. We also observe that para 4.49 of the Hand Book of Procedures (2004-2009) provides that the Customs shall verify the details of export as per records before allowing import against DEPB. Thus it is seen that Customs are supposed to have verified the value of exports on the application for transfer of license as well as when they allowed import against the DEPB. We find that the goods in question are goods which are traded frequently; if the Customs had taken the trouble of delving into the records and made some inquiries, the obvious multiple fold over valuation could have been detected at the time of exports on basis of which DEPBs/DFIA Licences were granted as well as at the time of imports under the DEPBs/DFIA Licences. We find that the applications for transfer contained documents such as shipping bills which are signed by the custom officers. Thus the point is that the goods which are later detected by the DRI to have been over valued, were allowed to be exported by the customs officers without pointing any discrepancies in the value and thereafter DGFT allowed transfer of the license on the basis of such documents. The plea of the appellants is that they cannot be held responsible when the procedure for transfer involves only the transferor, Customs and DGFT. We agree with this contention. This contention is supported by the Supreme Court decision in Goodluck Industries(supra) and Jindal Dye Intermediate Ltd(supra). It was held in the former case by the Tribunal that where the license is made transferable by the licensing authority, the only condition of the relevant notification which applies to the transferee is the one which requires that the license should have been made transferable by the licensing authority. The burden of proof that export obligation has been fulfilled is to be discharged by the original licensee.
8.3 The special Ld. Counsel for Revenue stressed that in respect of licenses obtained by fraud, misrepresentation etc., benefit cannot be taken by any one, whether the transferor or transferee otherwise it would lead to a dangerous proposition and enable fraudsters to obtain DEPB scrips by fraudulent means. To this we can only comment that authorities themselves are also responsible to the extent of not having checked the fraud at the time of exports. We should not be affected in our findings only by the fact that grant of benefit to transferees will encourage fraudsters. We are only guided by the law itself. And the law has been laid down in a number of judgments by the Apex Court. It was held in the case of East India Commercial Co. Ltd (supra):
35. Nor is there any legal basis for the contention that licence obtained by misrepresentation makes the licence non est, with the result that the goods should be deemed to have been imported without licence in contravention of the order issued under Section 3 of the Act so as to bring the case within Clause. (8) of Section 167 of the Sea Customs Act. Assuming that the principles of law of contract apply to the issue of a licence under the Act, a licence obtained by fraud is only voidable : it is good till avoided in the manner prescribed by law. On May 1, 1948, the Central Government issued an order in exercise of the power conferred on it by Section 3 of the Act to provide for licences obtained by misrepresentation, among others, and it reads :
In the circumstances, we must hold that when the goods were imported, they were imported under a valid licence and therefore it is not possible to say that the goods imported were those prohibited or restricted by or under Chapter IV of the Act within the meaning of Clause (8) of Section 167 of the Sea Customs Act.
In case of Sampat Raj Dugar(supra), the Honble Apex Court held
21. The next question is whether the import of the said goods was contrary to law in any manner and whether the said goods are liable to be confiscated under the Customs Act. The only provisions relied upon by the appellants are Clauses (d) and (o) in Section 111 of the Customs Act which we have set out hereinabove. In our opinion none of these clauses are attracted in the present case. Clause (d) contemplates an import which is contrary to any prohibition imposed either by the Customs Act or any other law for the time being in force. No such prohibition can be pleaded in this case since on the date of the import the said goods were covered by a valid import licence. The subsequent cancellation of licence is of no relevance nor does it retrospectively render the import illegal. [East India Commercial Co. Ltd. v. The Collector of Customs, Calcutta -1963 (3) S.C.R. 338 at 372.] Clause (o) contemplates confiscation of goods which are exempted from duty subject to a condition, which condition is not observed by the importer. Occasion for taking action under this clause arises only when the condition is not observed within the period prescribed, if any, or where the period is not so prescribed, within a reasonable period. It, therefore, cannot be said that the said goods were liable to be confiscated on the date of their import under Clause (o).
Finally the Supreme Court held in the case of Sneha Sales Corporation, by referring to its own decision in East India Commercial Company(supra), as follows:
In his order the Collector has taken note of the fact that by order dated December 18, 1986 passed by the Deputy Chief Controller of Imports and Exports under clause 9 of the Import and Export (Control) Order, 1955 the four import licences on the basis of which goods were imported by respondent No. 1 had been cancelled ab initio on the ground that the party had obtained the said licences by fraud and misrepresentation. The Collector held that since the licences had been cancelled ab initio by the Deputy Chief Controller of Imports and Exports there was no licence in existence at the time of import and the goods had been imported in contravention of the provisions of Import and Export (Control) Act and the goods were liable to be confiscated under Section 111(d) of the Act-----------------------
-------------------------------We are unable to accept this contention of the learned counsel in view of the law laid down by this Court in East India Commercial Company Ltd. v. Collector of Customs, Calcutta (supra) wherein this Court has said :-
Nor there is any legal basis for the contention that licence obtained by misrepresentation makes the licence honest. With the result that the goods should be deemed to have been imported without licence in contravention of the order issued under S. 3 of the Act so as to bring the case within cl. (8) of s. 167 of the Sea Customs Act. Assuming that the principles of law of contract apply to the issue of a licence under the Act, a licence obtained by fraud is only voidable; it is good till avoided in the manner prescribed by law.
5. In the aforementioned decision of this Court it has been clearly laid down that in a case where the licence is obtained by misrepresentation or fraud it is not rendered non est as a result of its cancellation so as to result in the goods that were imported on the basis of the said licences and being treated as goods imported without a licence in contravention of the order passed under Section 3 of the Import and Export Act that fraud or misrepresentation only renders a licence voidable and it becomes inoperative before it is cancelled. In the present case the licences were cancelled by order dated December 18, 1986 after the goods had been imported and cleared. The Tribunal was, therefore, right in holding that the import of the goods was not in contravention of the provisions of Import and Export Order, 1955 and Import and Export (Control) Act, 1947 and the goods were not liable to be confiscated on that basis under Section 111(d) of the Act.
The Special Counsel contended that these judgments of the Apex Court are distinguishable. In the case of East India Commercial Company (supra), he stated, it of about violation of post import condition. And in Sneha Sales Corporation (supra) the issue was of permitting import and not of authorising exemption from duty. He stressed that the Supreme Court judgments do not bar the issue of raising demand notices under Section 28 in such cases. He relied on the Apex Court judgement in the case of Tata Iron and Steel Co (supra). We do appreciate the manner in which judgments in the case of East India Commercial Co and Sneha Sales Corporation have been attempted to be distinguished by the Ld. Spl. Counsel. At the same time we cannot agree with Special Counsel for various reasons. In the case of Sneha Sales Corporation the license had been cancelled ab-initio, which according to the Special Counsel means that only importability of the goods was in question and Supreme Court held that even though the licenses were cancelled ab-initio, they are not rendered nonest at the time of import. We note that their Lordships clearly held that license is rendered only voidable. The decision in the case of East India Commercial Company held that license is good till avoided. If we were to agree with the contention that licenses is operative for importability but could not used for availing the duty benefit in term of Notifications cited, it would clearly lead to a contradictory interpretation of the Honble Supreme Court judgments. A valid License is valid for all Purposes. The only condition in the notifications which grant duty benefits as far as transferee is concerned is that the licenses must be valid at the time of import. There is no other condition in the notifications. In our considered view, once the licenses are held valid there can be no denial of benefit of notification on their plain reading. We also note that in their judgement in the case of TISCO, at the very outset the Honble Court stated the question to be whether the extended period under Section 28 is applicable. The facts in the present case are at variance and the question is whether duty liability can be fixed on the transferees of the licensees.
8.4 Special Counsel then drew our attention to the case of Dow Agro Sciences India Pvt. Ltd. 2012 (283) ELT 524 (Tri.-Mumbai). He also referred to the case of Munjal Showa Ltd. Vs. Commr. of Cus. & C. Ex. 2009 (246) ELT 18 (P & H) in which the P & H High Court held that when the documents under which exemption is claimed are found to be forged the purchaser steps into the shoes of the seller and does not acquire the better title than the seller. On this basis the Honble High Court denied the benefit of DEPB credit to the importer. In the former case the Tribunal relied on the case of Munjal Showa Ltd. and the case of M/s. Friends Trading Co. Vs. Union of India. In the case of Munjal Showa Ltd. the Honble High Court considered and distinguished the cases of East India Commercial Co. Ltd., Sneha Sales Corporation, Taparia Overseas Pvt. Ltd. and Leader Valves Ltd. The Honble High Court took the view that the judgment in the case of Sneha Sales Corporation and East India Commercial Co. Ltd. dealt with the confiscation and not with the payment of duty. We may examine these contentions of Ld. Spl. Counsel.
As regards the case of Dow Agro Sciences India Ltd., we find that the DEPB was obtained as a result of a racket involving forgery of export documents which is not so in the present case. Secondly, we also note that the Honble Member who delivered the judgment in the case of Dow Agro Sciences India Ltd took an opposite view in the case of Binani Cement Ltd. Vs. Commissioner of Customs, Kandla 2010 (259) ELT 247 (Tri. Ahmedad) which was affirmed by the Honble High Court of Gujarat. While affirming this judgment the Honble High Court categorically recorded that the Tribunal had followed the decision of the Supreme Court in the case of Sneha Sales Corporation. In this case of Binani Cement Ltd. we note that the circumstances were similar to the appeals at hand. In those cases also the Licenses were cancelled ab-initio after the transferee had utilized them for import. We also note that the observation of the Honble Tribunal decision in the case of Dow Agro Sciences India Pvt. Ltd. (supra) at para 9.25 stating that the case of Sneha Sales Corporation is also similarly distinguishable does not hold good because in the case of Binani Cement Ltd the Honble High Court of Gujarat has relied on Sneha Sales Corporation. In our view the judgments of the jurisdictional High Court which are consistent and the judgment of the Honble High Court of Gujarat cited above should prevail over the judgment of the P & H High Court in the case of Friends Trading Co. which in any case has taken a dramatically opposite view from the judgment in the case of Leader Valves delivered by the same Court. Further the contention that the earlier Supreme Court judgments such as East India Commercial Co. Ltd., Sneha Sales Corporation would apply only to the issue of importability of goods does not hold good in the face of the Honble High Court of Bombay decision in the case of Sanjay Sanwarmal Agarwal Vs. Union of India. It was held therein that :
5. Learned counsel for the petitioner contends that when the manufacturer has completed export obligation under the Advance Licence and DEEC Books have been audited and checked by the Customs Authorities then they neither have authority to travel beyond the scope of the Customs Act and the Import Export Policy nor could they refuse to allow duty free clearance of the petitioners goods, admittedly, covered under the definition of import licence.
6. The contentions sought to be advanced by the petitioner are identical with the contentions which were raised in the case of Taparia Overseas v. Union of India, 2003 (161) E.L.T. 47 (Bom.) = 2002 (2) Bom. C.R. 7; wherein this Court had occasion to deal with the similar contentions and to hold that the concept that fraud vitiates everything would not apply of the cases where the transaction of transfer of licence for a value without notice of alleged fraud arising out of mercantile transaction governed by common law. It was also held that import made under the valid licence could not be subjected to levy of customs duty as such it is not open for the Customs Authorities to withhold the clearance of the imported goods. In that case, the licence was suspended after the import of goods was completed. Same is the situation in the case in hand. Under these circumstances, having heard rival parties, we are in agreement with the submissions made by the petitioner that the issue in this petition is squarely covered by the judgment of this Court in the case of Taparia Overseas v. Union of India (supra) and the petitioner is liable to succeed on merits.
Therefore we are not inclined to agree with the Special Counsel.
8.5 Here we would also mention about the discussion of the case of Taparia Overseas Pvt. Ltd. (Mumbai High Court) in the judgment in Dow Agro Sciences India Pvt. Ltd. The Tribunal held that the Taparia Overseas Ltd. was dealing with REP Licenses whose transfer was governed by common law because the licenses were freely transferable. But that in cases where the licenses required endorsement of transferability, the concept of fraud vitiating everything will be applicable to such transactions. And that in the case of Taparia Overseas Pvt. Ltd. and Sneha Sales Corporation, the Apex Court treated DEPB Scrips/ REP Licenses as goods for the purpose of Sales Tax Laws only. And the Court did not compare the two from the point of view that the concept of fraud vitiating everything will be applicable when the transfer of licenses is made under a statute.
On the point of contention whether fraud vitiates everything we may refer to the Hon'ble High Court of Bombay decision in the case of Taparia Overseas Ltd. (supra). In that case also the import licenses obtained by license holder by fraud were suspended after the import by the transferees. It was held therein that-
28. It is not in dispute that the above procedure was followed by all the petitioners while getting the licences transferred in their respective names. It is, therefore, clear that transfer of licence was to be governed by ordinary law. The Apex Court had an occasion to deal with one of such similar issues sought to be raised in these petitions. In the leading case of East India Co. (supra), the Apex Court inter alia, observed as follows :
..... ..... Assuming that the principles of law of contract apply to the issue of a licence under the Act, a licence obtained by fraud is only voidable: It is good till avoided in the manner prescribed by law.
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The fact that the contract has been induced by fraud does not make the contract void, or prevent the property passing, but merely gives the party defrauded the right on discovering the fraud to elect whether he shall continue to treat the contract as binding or disaffirm the contract and resume the property. If it can be shown that the party defrauded has at any time after knowledge of the fraud either by express words or by unequivocal acts affirmed the contract, his election is determined for ever. The party defrauded may keep the question open so long as he does nothing to affirm the contract. The question always is, has the person on whom the fraud has been practised, having notice of the fraud, elected not to avoid the contract?, or, has he elected to avoid it? or, has he made no election? As long as he has made no election he retains the right to determine it either way, subject to this that if in the interval whilst he is deliberating, an innocent third party has acquired an interest in the property, or if in consequence of his delay the position even of the wrongdoer is affected, he will lose his right to rescind. ...............................................................
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It is thus no doubt true that as a general rule, if a transaction has been originally founded on fraud, the original vice will continue to taint it, and not only is the person who has committed fraud is precluded from deriving any benefit under it, but an innocent person is so likewise, unless there has been some consideration moving from himself. In the cases at hand, it is not in dispute that all the petitioners had obtained licences for valuable consideration without any notice of the fraud alleged to have been committed by the original licence holders while obtaining licences. If that be so, the concept that fraud vitiates everything would not be applicable to the cases where the transaction of transfer of licence is for value without notice arising out of mercantile transactions, governed by common law and not by provisions of any statute.......................................
On the above canvas, having examined the well settled, established and well recognised concept of law that the effect of fraud is not to render the transaction voidable initio but renders it voidable at the instance of the party defrauded and transaction continues valid until the party defrauded has decided to avoid it.
37. Alternatively, let us consider it from another angle assuming that licence comes to an end upon it is suspension and/or cancellation, in catena of cases, it is laid down that the date of import of goods would be the date on which the Bill of Entry was presented under section 46. This legal position is clear from the decision of the Apex Court as laid down in Union of India v. Apar Ltd. 1999 (112) E.L.T. 3 (S.C.) and Garden Silk Mills v. Union of India - 1999 (113) E.L.T. 358 (S.C.). The same is the view taken by the Apex Court in Sampat Raj Durgar case (cited supra). Imports against replenishment Licences were permitted duty free if the importers produced an import Replenishment Licence the goods or the materials were imported into India. In the instant cases when the goods were imported into India, and even when the Bills of Entry ware filed, neither were the licences suspended nor the same cancelled. In all these cases, Bills of Entry were filed by the petitioners well before the suspension and/or cancellation of the licences in question, thus the imports were made under valid licences, the goods could not be subjected to levy of customs duty in the peculiar facts and circumstances of the cases in hand.
We also note that in the case of Hico Enterprises Vs. Commissioner the Larger Bench decided in a similar case that-
Thus, in view of the aforesaid discussion, we are of the considered opinion that the principles evolved in the case of Goodluck Industries and upheld by Apex Court and followed subsequently in other cases, is to be made applicable to the case on hand, since it is based on sound principle of law. Consequently, we uphold the contentions raised by the appellants while negating the contentions raised by the Department. Therefore the legal maxim LEX NON COGIT AD IMPOSSIBILIA can be invoked and benefit of the same be given to the transferee of the licence for claiming exemption under the Notification. The transferee cannot be called upon to fulfill the condition (v)(a) of the Notification No. 203/92-Cus. It is the original licencee, who has to satisfy the above referred condition, but not the transferee of the licence. In the result, the reference is answered accordingly.
This decision was upheld by the Honble Supreme Court in 2008 (228) ELT 161 (S.C.). In the present case the appellants being bonafide purchases of Licenses for value without any notice of fraud, it has to be held that the concept of fraud vitiating everything is not applicable.
It was argued that the endorsement of transferability under provisions of EXIM policy being a statutory requirement to make DEPB scrips transferable, the concept of fraud vitiating everything must then be applicable to such transaction. And that this concept was not applicable to transfer of REP Licenses in the case of Taparia Overseas. It was further argued that the DEPB scrips could not be equated with REP Licenses because in cases like Tapariya and Sneha Sales Corporation, the two were treated as goods for purpose of sales tax laws only and situation contemplated under Sales Tax Act could not in the absence of intendment, be given effect to while applying provisons of the Act or the FT(Development& Regulation) Act. We are unable to agree with this argument. We find that transfer of REP Licenses is also in terms of the Import Export Policy. Further, we may refer to the case of Jindal drugs Ltd. Vs. State of Maharashtra [2004(178) ELT 105(Bom). It was held therein that
23. ............ The Apex Court in the case of Jugalkishore v. Raw Cotton Co., A.I.R. 1955 S.C. 376, had occasion to consider the meaning of actionable claim. In this judgment Apex Court ruled that a judgment debt or decree is not an actionable claim because no action is necessary to realise it. It has already been the subject of an action and is secured by the decree. A decree to be passed in future also does not come as such within the definition of an actionable claim. On the same analogy credit made in the D.E.P.B. is a crystalised debt for realisation of which no action at law is necessary. It is a determined amount of liability accepted by the customs. No action at law for its realisation is necessary. In case of transfer of D.E.P.B. credit, it confers upon transferee the immediate right to pay customs duty. This is not an inchoate or incomplete right. It cannot be held to materialise in future because its utilisation is dependant upon transferee importing goods covered by the D.E.P.B. scheme. Nor can D.E.P.B. credit be held to be actionable claim because the customs authorities might not recognise the credit therein and the transferee would have to commence action against them in the Court of law. In our opinion, the transfer of D.E.P.B. credit confers upon the transferee a right which is choate and perfected and exercisable immediately.
24. The Apex Court in Delhi Cloth & General Mills Co. v. Harnam Singh,. A.I.R. 1995 S.C. 590, was pleased to hold that a debt is property. It is a chose in action and is heritable and assignable and it is treated as property in India under the Transfer of Property Act. In the very same judgment the Apex Court ruled that it is necessary, however, to bear in mind that, under modern conditions, chose in action arising out of contract have two aspects: (i) as property and (ii) as involving a contractual obligation for performance. The property aspect is relevant for purpose of assignment, administration, taxation and the like, the contractual aspect for performance. Therefore, in our view, the credit entry in the D.E.P.B. cannot be described as an actionable claim.........................................................
27. ................... In the submission of the learned Counsel for the petitioners, reliance on the judgment of the Vikas Sales Corporation (supra) by the Delhi High Court was erroneous. In his submission, R.E.P. licence cannot be equated with the transfer of credit in the D.E.P.B. R.E.P. licence is merely a licence which grants a right to import goods, which right is transferable. Whereas, credit in the D.E.P.B. is not a licence, which merely gives right to import goods. It is an amount available to the credit of the holder to be liquidated against the payment of import duty for future imports. Therefore, in his submission, reliance placed on the judgment in the case of Vikas Sales Corporation (supra) while deciding that the credit in the D.E.P.B. is goods is not correct in law. He further submitted that the Delhi High Court while deciding the case in Philco Exports (supra) and the Apex Court in the case of Vikas Sales Corporation (supra), in turn, relied upon its earlier judgment in the case of [N. Anraj v. Government of Tamil Nadu], A.I.R. 1986 S.C. 63, holding that R.E.P. licence is not an actionable claim.
29. The Delhi High Court rightly relied upon the case of Vikas Sales Corporation (supra) and rightly held that D.E.P.B. credit is not an actionable claim. We concur with the view taken by the Delhi High Court and hold that the D.E.P.B. credit is liable for sales tax under the Bombay Sales Tax Act.........
The same view was held by the Honble Supreme Court in Vikas Sales Corporation[AIR(SC)-19960-2082/SCC-1996-4-433/JT-19965-482].
Thus it is clear that the DEPB scrips are held to be goods. This being the legal position, the Sale of Goods Act will apply. Section 29 of this Act deals with Sale by a person in possession under a voidable contract. It states When the seller of the goods has obtained possession thereof under a contract voidable under Section 19 or Section 19A of the Indian Contract Act, 1872, but the contract has not rescinded at the time of the sale, the buyer acquires a god title to the goods, provided he buys them in good faith and without notice of the sellers defect of title. In the present situation the contracts were voidable in terms of Sections 19 and 19A of the Contract Act reproduced below
19. Voidability of agreements without free consent-When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused. A party to contract, whose consent was caused by fraud or mispresentation, may if he thinks fit, insist that the contract shall be performed, and that he shall be put on the position in which he would have been if the representations made had been true. Exception: if such consent was caused by misrepresentation or by silence, fraudulent within the meaning of section 17, the contract, nevertheless is not voidable, if the party whose consent was as caused had the means of discovering the truth with ordinary diligence.
19-A. Power to set aside contract induced by undue influence- When consent to an agreement is caused by undue influence, the agreement is a contract voidable at the option of the party whose consent was so caused. Any such contract may be set aside either absolutely or, if the party who was entitled to avoid it has received any benefit thereunder, upon such terms and conditions as to the court may seem just.
Therefore transfer of DEPB scrips in the present cases will governed by the provisions of the statute, that is the Sale of Goods Act. In such a situation the Mumbai High Court decision in the case of Taparia Overseas will prevail. Resultantly, applying the ratio of Taparia, we are convinced that effect of misrepresentation in the present cases has not rendered the transaction between the original license holders and the transferees void ab-inito but rendered it voidable at the instance of the party( in this case importer)defrauded and transaction continues to be valid until the party defrauded has decided to avoid it. In the present case the licences/scrips were transferred to the appellant importers who had no knowledge of the misrepresentation by the exporters in obtaining them. The Bills of Entry were filed by the appellant importers well before the cancellation of licenses, thus imports were made under valid licenses. Therefore goods could not be subjected to levy of Custom duty for imports under Licences nor could availment of credit in DEPB scrips be denied.
8.5A The view that duty cannot be demanded from the tranferees was perhaps recognised by Government when it introduced Section 28 AAA in the Customs Act with effect from 28/5/2012. Section 28AAA provides that in such cases duty shall be recovered from the person to whom the instruments (such as DEPB) is issued. If law had been so clear that duty could be demanded from the transferee, there would have been no need to introduce Section 28 AAA in the statute.
8.6 Ld. Spl. Counsel for Revenue also relies on the Apex Court Judgment in case of M/s. FEDCO (P) Ltd. to make the point that when a license is obtained by fraud or mis-representation, it would be reasonable to think that the person in whose favour the license has been obtained cannot but be a party to the fraud or mis-representation. We have carefully gone through this judgment. The facts were that the petitioner in this case engaged in the business of chemicals and plastics etc had obtained five import licences. The goods were imported under these licenses. Before any of the goods could be cleared the company /petitioner received a notice that the licenses were proposed to be cancelled. The petitioners requested for particulars on the basis of which the licenses were proposed to be cancelled and sought permission to inspect the papers. However no particulars were furnished and no inspection was allowed. The licenses were cancelled. Therefore two issues arose before the Honble Apex Court; the first issue was whether cancellation is a reasonable restriction on exercise of fundamental rights. Honble Court held that We are therefore of opinion that the provision that license may be cancelled, if it is found, after giving a reasonable opportunity to the licensee to be heard, to have been obtained by fraud or misrepresentation is a reasonable restriction in the interest of the general public on the exercise of the fundamental right of citizen guaranteed under Article 19(1)(f) and (g) of the Constitution. The cancellation being under a valid law there can be no question of any right under Article 31 of the Constitution having been infringed. Secondly the issue was whether the cancellation could have been done without allowing inspection of records. The court held that the order of cancellation was made in utter disregard of principles of natural justice, without expressing opinion on merits. This judgment has no bearing on the facts of the present case before us. In that case there was no situation of transfer of licenses. The Apex Court never considered whether duty liability can be fixed on the transferee of licenses which were obtained by mis-representation by the transferor. Reliance on this judgment does not support the case of the Revenue at all.
The Reliance on the case of Ram Preeti Yadav (supra) is also misplaced. Here the issue was that a person whose result in an Intermediate Examination was withheld, being suspected of using unfair means, was at the same time issued a provisional mark sheet. The person thereafter passed his B.A. and M.A. examination, got employment as a teacher. The Honble Apex Court held that there is no equity in favour of the person in as much he knew that his result has been withheld because of the allegation of having used unfair means. He suppressed this fact and took admission in B.A. and studied thereafter. In this context the Honble Court held that benefit of fraud cannot be allowed to be enjoyed. However in the present case before us no evidence of fraud is produced as far as transferees of the licences are concerned.
Similarly, other judgment of K.I. International Ltd. (supra) is on a different platform. In this case the element beneficiaries used TRAs were was sold to them at throw away prices and did not exercise normal diligence to check the veracity of TRAs. In the present case there is no allegation that licences were sold at throw away prices.
8.7 On the reliance placed on the Apex Court judgment in the case of Tata Iron and Steel Co. Ltd. (supra) by the Spl. Counsel, our attention was drawn to the concept of precedential value of a direction made by the Supreme Court. In the case of Municipal Corporation of Delhi Vs. Gurnam Kaur 1989 AIR 38, 1988 SCR Supl. (2) 929 dt. 12.9.1988 it was held that that:
Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. With all respect to the learned Judge who passed the order in Jamna Das' case and to the learned Judge who agreed with him, we cannot concede that this Court is bound to follow it. It was delivered without argument, without reference to the relevant provisions of the Act conferring express power on the Municipal Corporation to direct removal of encroachments from any public place like pavement or public streets, and without any citation of authority. Accordingly, we do not propose to uphold the decision of the High Court because, it seems to us that it is wrong in principle and cannot be justified by the terms of the relevant provisions. A decision should be treated as given per incuriam when it is given in ignorance of the terms of a statute or of a rule having the force of a statute. So far as the order shows, no argument was addressed to the Court on the question or not whether any direction could properly be made compelling the Municipal Corporation to construct a stall at the pitching site of a PG NO 939 pavement squatter. Professor P.J. Fitzgerald, editor of the Salmond on Jurisprudence, 12th edn. explains the concept of sub silentio at p. 153 in these words:
"A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind. The Court may consciously decide in favour of one party because of point A, which it considers and pronounces upon. It may be shown, however, that logically the court should not have decided in favour of the particular party unless it also decided point B in his favour; but point B was not argued or considered by the court. In such circumstances, although point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio.
In view of this judgment, we hold that the judgment cited by Spl. Counsel is per incuriam. The judgments in the case of East India Commercial Company and Sneha Sales Corporation would hold fort in the circumstances.
8.8 In view of analysis above based on judicial pronouncements, we set aside the confiscation, demands of duty and interest and penalties.
8.9 Although, we have dealt with the core issue in our discussion above, some submissions of various counsels do need our attention. One of the submissions is that in respect of some transferees, the exporter namely M/s. Rajat Pharma Ltd had approached to the Settlement Commission and deposited the entire amount of duty, thereafter matter was settled. In such cases it is obvious that duty cannot be demanded both from the exporter and the importers (who are before us). Further in terms of Section 127(J), every order of the Settlement Commission passed under Section 127(C) shall be conclusive and no matter covered by such order shall be re-opened in any proceedings under this Act. Therefore duty demand against these importers are set aside on this ground also, apart from confiscation and penalties. In some cases, the exporter had deposited duty at the investigation stage on behalf of the importer also. In such cases too, the question of demanding duty to the extent of amount already deposited does not arise. In cases where the importer bought the goods on High Sea sales basis, misrepresentation of their part has not been proved. In any case we have stated in paras above that the transferees in cases of all appeals had no knowledge of mis-representation by the exporters.
9. In view of the above the confiscation of goods imported by the appellants who are transferees of the licenses/scrips does not arise. The demands of duty against them and penalties are set aside.
10. Appeals allowed in above terms.
6. In all the present cases, the fact that the licence obtained fraudulently came into notice of the DRI only after the goods imported and cleared under the said DEPB licence. A chart showing date of Bills of Entry and date of show-cause notice is given below:-
Sl. No. Appeal No. Appellant/Importer Bills of Entry No. & Date Show-cause notice No. & Date
1. C/1122/04 M/s Alpha Chemie Sapthagiri 98/01.09.98 S/16-Misc.-1243/98 Gr. 7 dated 29.01.1999 130/03.10.1998 S/26-Misc-38/99 Gr.-IV dated 08.02.1999 1433/06.10.98 DRI/BZU/E/20/98/425 dated 08.07.2002 3648/09.10.98 6452/15.10.98 8149/21.10.98 11331/25.11.98
2. C/56/05 M/s Nilkamal Ltd.
3496/07.11.98 S/16-Misc.-1243/98 Gr. 7 S/10-DEPB-21/99 dated 29.01.1999 3504/07.11.98 S/16-Misc.-1243/98 Gr. 7 S/10-DEPB-23/99 dated 29.01.1999 11650/24.09.98 S/16-Misc.-1243/98 Gr. 7 S/10-DEPB-24/99 dated 29.01.1999 11660/24.09.98 S/16-Misc.-1243/98 Gr. 7 S/10-DEPB-25/99 dated 29.01.1999 11669/24.09.98 S/16-Misc.-1243/98 Gr. 7 S/10-DEPB-26/99 dated 29.01.1999 11640/24.09.98 S/16-Misc.-1243/98 Gr. 7 S/10-DEPB-27/99 dated 29.01.1999 DRI/BZU/E/24/98/2549 dated 30.05.2002
3. C/647 743/05 M/s Nilkamal Crates & Bins 4040/09.11.98 S/16-Misc.-1243/98 Gr. 7 S/10-DEPB-23/99 dated 29.01.1999 DRI/BZU/E/24/98/2535 dated 30.05.2002
4. C/744/05 M/s Kamtee India Photographic Co. Pvt. Ltd.
5066/11.11.98 S/16-Misc.-1243/98 Gr. 7 S/10-DEPB-04/99 dated 29.01.1999 DRI/BZU/E/19/KIPCP/98/2466 dated 27.05.2002
5. C/743/05 M/s Kamtee Imaging Pvt. Ltd.
4141/09.11.98 S/16-Misc.-1243/98 Gr. 7 S/10-DEPB-06/99 dated 29.01.1999 8994/26.10.98 S/16-Misc.-1243/98 Gr. 7 S/10-DEPB-07/99 dated 29.01.1999 3620/09.10.98 S/16-Misc.-1243/98 Gr. 7 S/10-DEPB-05/99 dated 29.01.1999 DRI/BZU/E/19/KIPL/98/2452 dated 27.05.2002
7. From the above details it can be seen in all the cases, the goods were imported and cleared under DEPB licence much before the issue of show-cause notices, therefore at the time of imported of the goods and clearance thereof, the DEPB licences were valid in the hands of the appellants-importers. Therefore, the duty demand against the appellant is not sustainable. As per the above discussion and the Tribunals judgment in the case of Sumit Wool Processors & Others (supra) which is squarely applicable in the present case, the impugned orders are not sustainable, hence the same are set aside. All the appeals are allowed.
(Pronounced in Court on .................2016) (C.J. Mathew) (Ramesh Nair) Member (Technical) Member (Judicial) Sp 26 APPEAL NO. C/1122/04, C/56, 647, 743 & 744/05