KAMANI OIL INDUSTRIES Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE appellant imported and cleared a consignment of Sunflower oil in July, 1999. The customs duty payable on it was paid through DEPB licence, a valid way of discharging duty liability. Subsequently, in December, 2003 a show -cause notice was issued, inter alia to the appellant alleging that the DEPB licence had been obtained by fraud and for that reason the payment of duty made in 1999 was not valid. The appellant was, therefore, directed to show cause why the duty unpaid should not be paid and penalty imposed on him. The said notice invoked proviso to Section 28 of the Customs Act for justifying the delayed issued a show -cause notice.

(2.) IN the adjudication proceedings, it was the submission of the appellant that it had purchased the DEPB credit for valid consideration and it was not aware of or involved in any fraudulent activity whatsoever. It was, therefore, contended that proviso to Section 28 has no application to the present case and no duty or penalty could be recovered from the appellant. Even though the Id. Adjudicating authority accepted the appellant's contention that it was not a party to the fraud, all the same, duty liability was confirmed. The present appeal is directed against that duty demand.

(3.) THE contention of the Id. Counsel for the appellant is that the duty demand is contrary to the specific provision in the proviso to Section 28 and for that reason is to be held as illegal. It is being pointed out that the proviso relates to duty "not levied or short -levied - - - by reason of collusion - - - - by the importer - - - - - - or the agent or employee of the importer". It is the Id. Counsel's submission that the proviso permits of action only in case where there is collusion, wilful mis -statement etc. by the importer of the consignment in question or his agent. He contends that since the finding in the adjudication order itself is that the importer in the present case has not committed any fraud or mis -declaration, the proviso had no application to the present case. The Id. Counsel has also relied on the decisions in the following cases : -