SUMAT PERSHAD Vs. COMMISSIONER CUSTOMS (EXPORT)

JUDGEMENT

(1.) This writ petition, at the instance of the petitioner M/s Sumat Pershad and Sons, impugns Order-in-Original No.06/2019/Sunil Tated/Commr/Exp/ICD/TKD, dated 11th October, 2019, issued by the Commissioner of Customs (Export) (hereinafter referred to as "the Commissioner"), whereby

(2.) Paper was imported, by the petitioner, under various Bills of Entry, between 8th March, 2011 and 21st January, 2015, at the Inland Container Depot, Tughlakabad (ICD, TKD). Duty was paid, on the said imports, by debiting various licenses/scrips, issued under the Duty Free Import Authorisation (DFIA) Scheme, Focus Product Scheme (FPS) and Focus Market Scheme (FMS), under the Foreign Trade Policy (hereinafter referred to as "FTP") of the Directorate General of Foreign Trade (DGFT). It is not necessary, for the purposes of this judgment, to enter into the specifics of these licenses/scrips. Suffice it to state that the DFIA, FPS and FMS are export promotion schemes, provided in the FTP, whereunder importers could import items duty-free, or at reduced rates of duty, subject to fulfilment of export obligations, or other obligations stipulated under the FTP for the purpose. These licenses/scrips, once issued, are, to a large extent, tradable in the market.

(3.) Intelligence was received, by the office of the Commissioner, that various clandestine imports of paper had been effected, through M/s Kirti Cargo, a Customs Broker, and its G-Card holder, Sharafat Hussain. Apparently, in collusion with officers of the Customs, and by accessing the online passwords assigned to these officers, Sharafat Hussain had managed to hack the Electronic Data Interchange (EDI) system, which is an online system - supposedly impenetrable - conceived by the Customs authorities, whereunder Bills of Entry are filed online, and duty is also paid online, through the Indian Customs Electronic Gateway (ICEGATE). Licenses, or scrips, which allowed for duty free import of goods, as also the extent of exemption as available thereunder, were required to be registered, under the EDI system, before duty-free import, using such scrips/licences, could be effected. Sharafat Hussain had, apparently, managed to penetrate the EDI system, using the passwords of various indulgent Departmental officials, and register, in the EDI system, scrips which were fictitious/non-existent, as also to enhance the amounts of duty exemption available under existing scrips. Using such non-existent, or "overvalued" scrips, Sharafat Hussain, representing the Customs Broker Kirti Cargo, was paying duty, against imports effected by various importers whereas, in actual fact, the duty was never paid, as the licenses themselves were fictitious, or overvalued. The licenses were shown to have been issued to various companies/firms floated by Sharafat Hussain, such as M/s. Zealous Overseas Pvt. Ltd., M/s Zealous International, and M/s Fibretech Exim, among others. In this subterfuge, Sharafat Hussain had, allegedly, enlisted the services of one Vinod Kumar Pathror, who masqueraded as an employee of Kirti Cargo and, thereby, managed access to the Export Promotion Measures (EPM) branch of the ICD, TKD.