ICI INDIA LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE brief facts of the case are as follows : - The appellants are manufacturers of paints and allied products. The raw material requirements for the manufacture are met mainly by imports. Since October, 1999, the appellants imported certain raw materials and cleared the same duty -free by availing exemption under Notification No. 34/97 -Cus., dated 7 -4 -97 which provided for duty -free imports of raw materials against credit earned by any exporter and certified by the Director -General of Foreign Trade (in short, DGFT) under the Duty Exemption Pass Book (in short, DEPB) Scheme in terms of the relevant provisions of Exim Policy 1997 -2002. Post -export DEPB certificates/scrips/licences issued by the DGFT to an exporter were transferable in the market and a transferee -importer was entitled, under the above Notification, to utilise the certified credit for paying basic customs duty and surcharge on imports of non -restricted items of raw materials. The imports made by the appellants without payment of duty were on the strength of four DEPB scrips procured from the market. In early 2000, the Customs authorities, through investigation, found the DEPB scrips to be forged and fake and issued four show cause notices (SCNs) for recovering a total duty amount of Rs. 70,39,862/ - from the appellants under Section 28(1) of the Customs Act, holding the imported goods to be liable to confiscation under Section 111(o) of the Act and for imposing penalties on the party under Sections 112(a) and 114A of the Act. The appellants hotly contested the SCNs, maintaining that they had not violated any condition under the notification and hence they were entitled to the benefit of exemption and were not liable to any penal action. Ld. Commissioner of Customs who adjudicated the dispute found against the party and passed Order No. 37/2000, dated 25 -5 -2000 confirming the above demand of duty against them under Section 28(2) and imposing on them a penalty of equal amount under Section 114A besides holding the goods to be liable to confiscation under Section 111(o). Hence the present appeal.

(2.) WE have carefully examined the records and heard both sides.

(3.) THE finding of fact mentioned at 3(a) above is not under challenge, nor is it the appellants' case that the subject licences were issued by the competent licensing authority. On our part, we have examined the evidence on record and have found that the Commissioner's finding at 3{b) above is supported by unrebutted evidence. It has been found beyond doubt that the DEPB licences in question had not been issued by the DGFT and were forged documents. It was reported by the DGFT's office that the licences in question had not been issued to M/s. Hindalco Industries Ltd. or M/s. S.B. Agro (India) Ltd. and it was deposed by senior functionaries of these companies that they had not transferred any such licences to the appellants. It was also proved that the signatures shown as that of transferor in the transfer letters were forged and further that the bank accounts cited in the said letters, as the bank accounts of transferors, were bogus. The appellants stated under Section 108 of the Customs Act that they had purchased the licences through M/s. Classic International and M/s. James Enterprises and that the payments were made through banks. But further enquiries made with reference to the addresses of these two firms as seen in the bank records proved that the firms did not exist at such addresses. None of these investigative findings has been challenged by the appellants. We, therefore, uphold ld. Commissioner's finding that the licences were forged and fake.