A Supreme Court Bench of Justice MR Shah and Justice Krishna Murari affirmed an order passed by the Punjab and Haryana High Court by which the High Court had dismissed an appeal filed by the Appellant under Section 130 of the Customs Act. In that context, the Supreme Court held that "In that view of the matter and on the principle that fraud vitiates everything and such forged/fake DEPB licenses/Scripps are void ab 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."

ASG Shri Vikramjit Banerji appeared for the Respondent before the Court.

In this case, the Appellant had imported consignments through ICD using Transfer Release Advices (TRAs), issued by the Bombay Custom House. On verification, it was found that the Duty Entitlement Passbook Scheme Licensees (DEPB) on the basis of which TRAs were issued, were not genuine. Therefore, the Appellant was required to deposit the duty with interest in lieu of the DEPB benefit availed by it.

The Appellant informed the Department that it was surprised to learn about the forgery and was taking steps to lodge F.I.R. against the transferor and sought time to make payment. The Appellant then deposited the amount of duty under protest.

After completion of investigation, a show cause notice was issued to the Appellant, alleging evasion of duty by seeking exemption against debits in releasing the advices, which were forged and which were not genuinely issued by the competent authority.

The Appellant challenged the show-cause notice on the ground of limitation as well as on the ground that though the DEPB Scripps were forged but there was no intention to evade Customs Duty.

The Commissioner of Customs passed an order holding that the DEPB Scripps were forged and thus void ab initio and, therefore, the exemption availed of was inadmissible. It was also held that the goods were liable to confiscation and the Appellant was liable to interest and penalty.

The order passed by the Commissioner of Customers was put before the Customs, Excise, and Service Tax Appellate Tribunal. The Tribunal rejected the plea of the Appellant on the issue of liability of duty.

Aggrieved, the Appellant appeared before the High Court under Section 130 of the Customs Act. The High Court dismissed the appeal.

The Appellant then appeared before the Supreme Court.

The Supreme Court concurred with the finding of the Department and the Tribunal and held that the Department was completely justified in invoking the extended period of limitation. In that context, the Court opined that "the DEPB licenses/Scripps on which the exemption was availed by the appellant(s) was/were found to be forged one and, therefore, there shall be a duty liability and the same has been rightly confirmed by the Department, which has been rightly confirmed by the Tribunal as well as the High Court."

In light of the same, the Supreme Court dismissed the appeals.

Cause Title - M/s. Munjal Showa Ltd. & Ors. v. Commissioner of Customs and Central Excise (Delhi - IV) & Ors.

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