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Munjal Showa Ltd. vs Commissioner Of Customs And Central Excise - (Supreme Court) (23 Sep 2022)

Fraud vitiates everything and forged DEPB licenses are void ab initio



The original assessee has preferred the present Civil Appeal against the impugned judgment passed by the High Court by which the High Court has confirmed the order passed by the Customs, Excise and Service Tax Appellate Tribunal (“Tribunal”) confirming the demand of Customs Duty with interest.

From the judgment and order passed by the Tribunal and even from the findings recorded by the Department, it has been found that the DEPB licenses/Scripps, on which the exemption benefit was availed of by the Appellant(s) (as buyers of the forged/ fake DEPB licenses/Scripps) were found to be forged one and it was found that the DEPB licenses/Scripps were not issued at all. A fraud was played and the exemption benefit was availed on such forged/fake DEPB licenses/Scripps.

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.

It is also required to be noted that, the moment, the Appellant(s) was/were informed about the fake DEPB licenses, immediately they paid the Customs Duty, may be under protest. The Customs Duty was paid under protest to avoid any further coercive action. The fact remains 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 the present case so far as the penalty proceedings are concerned, the matter is remanded by the Tribunal to the adjudicating authority, which is reported to be pending. The adjudicating authority is directed to complete the penalty proceedings on remand, at the earliest preferably within a period of six months. Appeals dismissed.


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