The Ahmedabad bench Customs, Excise and Service Tax Appellate Tribunal (CESTAT) availing Cenvat credit by bills of entry based on Vishesh Krishi and Gram Udyog Yojana (VKGUY) and Duty Entitlement Pass Book (DEPB)licences is invalid.
Hindalco Industries Limited, the appellant had cleared imported goods under VKGUY/DEPB licence/ authorizations issued by DGFT and purchased from one M/s. Padmavati Agencies Private Ltd. which was subsequently found to be forged licences. After knowing this fraud the appellant deposited the custom duty foregone by clearing the goods at the time of assessment under forged VKGUY and DEPB licences.
A show cause notice was issued, and the same has been decided by appropriating the duty already paid. The penalties were set aside. It was alleged that the appellant has availed the cenvat credit in respect of bills of entry which was initially assessed based on forged VKGUY and DEPB licences. The department argued that since the bills of entry were assessed based on forged licences the same is not a valid document to avail cenvat credit.
Shri Anand Nainawati, Counsel appeared on behalf of the appellant and submitted that the cenvat credit was denied on the ground that there was forgery and fraud in respect of licenses under which the imported goods were cleared. It was stated that the Commissioner of Customs has categorically held that the appellant was not the party to the forgery of the licence committed by the seller of the licences. Therefore, the penalties were dropped.
The two-member bench comprising Mr Ramesh Nair, Judicial Member and Mr C L Mahar, Technical Member observed that “the genesis of this case is the fraudulent obtainment of VKGUY & DEPB licences regarding that custom matter the appellants were issue show cause notice dated 05.11.2012 which was adjudicated vide order-in-original passed by customs commissioner.”
Since the adjudication order in the customs matter was not considered by the Adjudicating Authority, the CESTAT remitted back the matter to the adjudicating authority for reconsideration. Accordingly, the impugned order was set aside and allowed the appeal by way of remand.
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