In Customs Appeal No (s). 52688 and 52689 OF 2019-CESTAT- Benefit of exemption under the license is not available on strength of fraudulent licence and the appellant is liable to pay the duty: CESTAT (New Delhi)
Members P.V. Subba Rao (Technical) & Binu Tamta (Judicial) [12-04-2023]

Read Order: M/s Bimal Paper Pvt. Ltd. And Others v. Principal Commissioner of Customs

LE Correspondent

New Delhi, April 18, 2023: Citing the case of Nidhi Enterprises v. Commissioner Of Customs, (export), New Delhi (LQ/CESTAT/2022/116), wherein the Tribunal followed the decision of the Supreme Court in M/s Munjal Showa Ltd. & Ors. versus Commissioner of Customs and Central Excise (Delhi – IV) (LQ/SC/2022/1215) and ruled that duty was payable where the duty was not paid initially by using fake/forged scrips/licenses, the principal bench of CESTAT in the said case has held that the benefit of the exemption under the license is not available on the strength of a fraudulent licence and the appellant is liable to pay the duty.

The Tribunal noted that it is a well settled legal principal that fraud vitiates everything and nobody can profit from the fraud whether or not the fraud itself was committed by that person.

“In the case of Nidhi Enterprises, this Tribunal held that the buyer of the licenses has to fulfill the requirement of Caveat Emptor. The appellant in this case has not even remotely fulfilled its obligation as a buyer of the licences/ scrips. In fact, the appellant had not even bought the licences/scrips but only purchased the benefit from the licences/scrips. Therefore, the impugned order correctly confirmed the demand of duty from the appellant. Since, the duty is payable the corresponding interest also has to be paid, as applicable,” the Tribunal further said.