The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that importer is liable for making forged imports. And penalty under section 114 A was charged against the importer.
Shri S.C. Jain Advocate appeared for the Appellant and Shri Rakesh Kumar appeared for the Department.
In the instant case,2 appeals assailing the same order passed by the commissioner of customs were been disposed of together by ITAT. The appellants, M/s Nidhi is an enterprise firm which carried business of importing and trading paper based article and appellant Shri Sudarshan Kumar Jain was a partner of this import business enterprise.The appellant Neethi enterprise was charged u/s 114 A and appellant Shri Sudarshan Kumar Jain was charged u/s 112(a)(ii), 114AA,of the Customs Act, 1962 . Along with them ShriSharafat Hussain and Shri Vinod Pathror, were also charged under these sections.
Nidhi imported goods using various duty free licenses which were transferred by ShriSharafat Hussain but Nidhi had not obtained physical copy of any of the licences. Here Shri Sharafat Hussain by entering fake and forged licences and by entering the same licence multiple times helped several importers to clear their consignments without paying duty. The appellant Nidhi was one of such importers. And the appellants were not knowing about these forged importing methods they adopted. Hence they were imposed penalty, they filed appeal.
It was contented on behalf of the assesse that Nidhi wasabonafide purchaser of the duty credit scrips and was not aware of theforgery committed and there was no evidence for that at all. Also contented the possibility of involvement of customs officials in it and benefits earned by them, and argued that the SCN was pre-mature as the role of the officers were not investigated. Also held that separate penalty should not be imposed on partner as firm and partners were not separate entity and SCN was issued by authority having no jurisdiction.
On behalf of commissioner of customs, it was contented that the Nidhi enterprises neither took any precautions nor had a copy of licence. Also upheld the maxim of Buyer Bewareand impugned that they followed procedure incorrectly.The DR also opposed that the partnership firm and partner were different and penalty against partner exist. And also held that the SCN was matured and the investigation against officers will be decided by CBI.
The principle bench comprising of justice DilipGupts(president) and Mr.P.V. Subba Rao (technical member) found that Nidhi had not even obtained physical copy of any of the licences or scrips nor had any idea of the licence. And also questioned the genuinityof appellant being bonafide and also held that the authority who passed the impugned order had all jurisdiction.The tribunal set aside the penalty imposed on the partner and upheld all other penalties.
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