ORDER
S.S. Kang, Vice President
1. Heard both sides. The appellants filed this appeal against Adjudication Order passed by the Commissioner of Customs whereby the duty of Rs. 1,40,149/- was confirmed.
2. Brief facts of the case are that the present appellants made import against DEPB Scrip. The goods were cleared without payment of duty. Subsequently, it was found that DEPB Scrip were obtained by producing forged bank certificate of export and realization issued by various banks, and therefore, DEPB Scrips were cancelled by the competent authority. In pursuance cancellation of DEPB Scrip demand of duty was confirmed after issuance of show cause notice.
3. Facts of the case are that M/s. Parker Industries after producing the relevant evidence before the competent authority obtained Transferable DEPB Scrips which were first transferred to one M/s. Shyam International. M/s. Shyam International transferred the same to M/s. Vivek Impex Pvt. Ltd. and the present appellants purchased the DEPB Scrip from M/s. Vivek Impex Pvt. Ltd. Subsequently it was found that the DEPB Scrip was obtained by producing forged documents. As the Scrip was cancelled subsequently, the duty is demanded from present appellant as the appellant imported the goods under these scrips.
4. The contention of the appellants is that the import was made on 24.11.2000 and the goods were assessed by the proper officer before clearance. Thereafter DEPB Scrips were cancelled on 16.1.2002 ab initio. The contention is that at the time of import DEPB Scrips were valid which entitled them to import the goods free of customs duty, and subsequent cancellation of DEPB Scrips by the DGFT will not affect the import made before the cancellation of DEPB Scrips. The appellants relied upon the decision of the Hon’ble Supreme Court in the case of East India Commercial Co. Ltd. v. C.C. . The contention is that this decision was followed by the Hon’ble Supreme Court in the case of UOI v. Sampatraj Dugar and Anr. and various High Courts. The appellants also relied upon the decision of Bombay High Court in the case of Taparia Overseas (P) Ltd. v. UOI, wherein after following the decision in the case of East India Commercial Co. Ltd. the Hon’ble High Court held that in case licence obtained by licence by original licencee by fraud of mis-representation but the goods imported before the cancellation of licence the importer is entitled for the benefit of licence and no customs duty can be demanded. The appeal filed by the Revenue was dismissed by the Hon’ble Supreme Court. The contention is that this decision is subsequently followed in the case of C.C., Bombay v. Sneha Sales Corporation, reported in 2000 (121) E.L.T. 577 (SC). In this decision it was held that import made under a valid licence cannot be subjected to levy of Customs duty.
5. The contention of the Revenue is that M/s. Parker Industries produced copies of shipping bill along with bank certificate of export and realization (BC&R) for getting transferable DEPB Scrips. The same were issued by the DGFT. Subsequently investigation was conducted by the bank authorities whose certificate was produced by M/s. Parker Industries as proof of their realization of export particulars and it was found that bank had not issued such certificate and these were forged documents which were used to obtain transferable DEPB Scrips and as the DEPB Scrips were obtained by producing forged documents the same were cancelled by DGFT. The Revenue relied upon the decision of the Hon’ble Supreme Court in the case of New India Insurance Co. v. Kamla, to submit that the Hon’ble Supreme Court held that what was originally a forgery would remain null and void forever and it would not acquire legal validity at any time by whatever process of sanctification subsequently done on it. Forgery is antithesis to legality and law cannot afford to validate a forgery. The Revenue also relied upon a decision of Madras High Court in the case of South India Exports v. Jt. Director of Foreign Trade, reported in 2004 (177) ELT 57 (Mad.) wherein Hon’ble High Court after taking into consideration the decision of the Hon’ble Supreme Court in the case of East India Commercial Co. Ltd., relied upon by the appellants, held that Customs authorities can also inspect in respect of mis-representation while getting Advance licence and mis-utilization of imported material. The contention of the Revenue is that when the DEPB Scrips were obtained by producing forged documents duty was rightly demanded in the impugned order as the DEPB Scrips were not valid scrips.
6. In the present case admitted facts are that M/s. Parker Industries obtained DEPB Scrips by producing forged bank certificate of export and realization in respect of goods exported by them. Inquiry was conducted from the banks which shows that such certificate was not issued by the bank. DEPB Scrips were purchased by the appellants and was used for import without payment of duty. Subsequent to the import of goods DEPB Scrips were cancelled by the DGFT. The question before us is whether duty is demandable when DEPB Scrips were obtained by producing forged documents and subsequently the same cancelled by the competent authority. Reliance of the appellants is only on the Supreme Court’s decision in the case of East India Commercial Co. Ltd. (supra) and the other decision of the Hon’ble Supreme Court and High Court where this decision was followed. We find that in East India Commercial Co. Ltd. (supra) case the facts were that the importer made import under import licence on the condition that the goods were not for sale but for captive consumption but subsequently it was found that the goods were sold and not captively consumed. In this situation the Hon’ble Supreme Court held the goods were not liable for confiscation when the goods were imported under a valid licence. The Supreme Court held that the breach of condition was committed subsequent to the importation of goods. Hence goods cannot be confiscated under Section 167(8) of the Sea Customs Act, 1878. In the present case facts are different. In this case goods were imported under DEPB Scrips which were obtained by producing forged certificates. The appellants also relied upon the decision in the case of Taparia Overseas (P) Ltd. wherein the Hon’ble Supreme Court held that in the case where licence was obtained by way of mis-representation and fraud and subsequently cancelled customs duty cannot be demand. We find that mis-representation or fraud is falsification of account to obtain the import licence where DEPB Scrips were obtained by producing forged documents showing export realization which is different from falsification of account therefore, ratio of the decision relied upon by the appellants are not applicable to the facts of the present case.
7. Further, we find that the Hon’ble Supreme Court in the case of New India Insurance Co. (supra) has held as under:
THE observation of the Division Bench of the Punjab and Haryana High Court in National Insurance Co. Ltd. v. Sucha Singh (supra) that renewal of a document which purports to be a driving licence, will robe even a forged document with validity on account of Section 15 of the Act, propounds a very dangerous proposition. If that proposition is allowed to stand as a legal principle, it may, no doubt, thrill counterfeiters the world over as they would be encouraged to manufacture fake documents in a legion. What was originally a forgery would remain null and void for ever and it would not acquire legal validity at any time by whatever process of sanctification subsequently done on it. Forgery is antithesis to legality and law cannot afford to validate a forgery.
8. As in the present case DEPB Scrips were obtained by producing forged documents, hence any concession availed on such DEPB Scrips remains null and void and would not acquire legal validity at any time. Therefore, we find no infirmity in the impugned order whereby duty was demanded from the appellants. The appeal is dismissed.
(Dictated & pronounced in the Open Court.)