The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that penalty under Customs Act,1962 is not imposable when fabricated DEPBS scrip purchased on bonafide belief.
Shree Fats And Proteins Pvt Limited, the appellant have a grievance as purchaser of DEPB scrips from the open market on the bonafide belief. However, later on DEPB scrips was found to be fabricated and the department sought to recover the duty availed by invoking extended period.
In the case of M/s. Vijay Solvent Extraction Ind. Pvt. Limited vs. CC, Kandla wherein the Division Bench of CESTAT Ahmedabad held that extended period cannot be invoked when the assessee has not suppressed any material fact and as the appellant himself is a victim of fraud/ forgery committed.
Fraud vitiates everything and such forged/fake DEPB licenses/ initio, it cannot be said that the Department acted illegally in invoking the extended period of limitation. In the facts and circumstances, the Department was absolutely justified in invoking the extended period of limitation.
It was evident that the moment, the appellant(s) was/were informed about the fake DEPB licenses, immediately they paid the Customs Duty, may be under protest. The Customs Duty was paid under protest to avoid any further coercive action.
A single member bench of Mr. Somesh Arora, Member (Judicial) observed that “fraud vitiates everything and it having been considered and decided that for the fake scrips, no right accrues, same holds good for the appellant in the present matter too. However, since in the decision of Division Bench from the same facts cited by the appellant, it has already been decided that there is no allegation of fraud against the importer, penalty cannot be invoked in the absence of mens-rea, therefore regarding penalty party is entitled to relief.”
The Tribunal set aside the penalty imposed since there is no intention to the fraud/ forgery and allowed the appeal.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
