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2. The issue involved in all these appeals is essentially the same, therefore they are taken up together for decision. The appeals were heard on 11/8/2015 and 18/8/2015.

3. The Directorate of Revenue Intelligence(DRI) investigated the cases of over valuation of export goods. Investigations revealed that some exporters namely M/s Nidhi Textiles, M/s Milan Exports, M/s Madhuri Impex Pvt. Ltd., Madhuri Synthetics, M/s Mahavir Synthetics, M/s Laxminath Exports who are all merchant exporters inflated the FOB value of their exports significantly and obtained the DEPB Scrips/DFIA Licenses against such exports. The DEPB scrips were sold to various transferees on the basis of endorsement of transferability by the DGFT. Appellants in the present appeals are such transferees of the DEPB scrips, DFIA licenses and Focus Market scrips. The transferees imported the goods against such scrips and availed the duty credit/exemption available under the scrips under Notifications such as 89/2005-Cus, 40/2006-Cus. The gross inflation in the FOB value of exports resulted in excess duty credit availibility on the DEPB scrips. Importers/transferees who made imports under these scrips could therefore avail the credit obtained fraudulently resulting in loss of Revenue to the Government. The investigation by DRI culminated in issue of show cause notices to the exporters and the transferees/importers of the DEPB/DFIA documents. The impugned orders have been passed holding the goods exported and imported liable to confiscation. The demand of duty has been confirmed against the importers i.e. transferees of the scrips under Section 28 alongwith confirmation of penalties under Section 28AB. Penalties have also been imposed on the exporters and importers under Section 112/114A. When the matter was investigated and referred to the licencing authority, the Joint DGFT cancelled all the DEPB/DFIA scrips ab-initio. Only transferees are in appeal before us.

4. Shri. J.C. Patel, Advocate led the arguments from the side of appellants. Other advocates also made a few contentions which have been considered by us. Written submissions were also submitted by the advocates.

5. Shri. J.C. Patel made the following submissions:

(i) The appellants are transferees of Licenses issued under DEPB/DFIA/Focus Market schemes under the Foreign Trade Policy. The Licenses are endorsed as transferable by the licensing authority. Further, the exports effected by the original licensees and against which exports the licenses are granted, are duly verified by the Customs by an endorsement made to that effect on the shipping bills. That apart at the time of exports, the Shipping Bills have been duly assessed by the proper officer of customs.

6. Shri. V.K. Singh, Ld. Special Counsel appearing on behalf of Revenue made following submissions.

(i) The investigation clearly established that the said exporters had indulged in the act of exporting low value made ups and fabrics in the guise of high value made ups and fabrics deliberately with an intention to avail undue and illegal export benefits under DEPB/DFIA schemes. In doing so, the exporters created fictitious/bogus records of purchase (invoices) of the goods eventually exported by them, so as to create a fictitious record of having purchased the goods from fictitious/non existing local suppliers at much higher values than the real price paid for purchase thereof from local shops in Surat etc. Further an element of 11% brokerage was also included in the said invoices to further increase the recorded cost of procurement though no such brokerage was ever paid. Further in order to get back the money shown to have been paid for such high value purchase of goods, the exporters had effected a maze of financial transactions which involved creation of discounting of the cheques drawn in the name of non existing/fictitious local suppliers by using the services of financial brokers. The entire gamut of well planned acts of commission, aimed at defrauding the Government through misuse of the DEPB/DFIA schemes, is further proven by the evidence collected during the investigation locally and at Dubai (through diplomatic sources) that the value declared by the Dubai based purchasers of the exported goods is just a fraction (average 6.7% ) of the value declared by M/s. Nidhi Textiles and others at the time of export before the Indian Customs.

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.