Customs - Section 114A of Customs Act, 1962 – Import of paper based articles – Using of forged duty free scrips – Demand of duty – Imposition of penalty – Appellant is engaged in business of importing and trading paper based articles – Appellant imported goods under Bills of Entry using duty free licenses issued by Directorate General of Foreign Trade – Investigations revealed that Sharafat Hussain used User IDs of Customs officers and entered wrong details of licences in Customs Electronic Data Interchange system enhancing value of duty free entitlement by entering fake and forged licences – Using such licences, several importers cleared their consignments without paying duty – Appellant is one of such importers – After issuance of SCN, Commissioner (Exports) confirmed demand of duty and imposed penalty under Section 114A of the Act – Whether Appellant is a bonafide purchaser of duty credit scrips without aware of fraud committed by Sharafat Hussain – HELD – Appellant imported goods and asked Sharafat Hussain to clear goods by filing Bills of Entry and paid a percentage of duty chargeable to Sharafat Hussain, who in turn, used fake or forged or manipulated licences/scrips to pay duty online and clear the goods – Appellant purchased benefit of exemption notification from Sharafat Hussain and not scrip/licence – There is no provision to transfer benefit of any exemption – Without transferring licence/scrip, benefit of exemption cannot be transferred – Invoices issued by companies owned by Sharafat Hussain to Appellant do not indicate that any licence/scrip was transferred to Appellant – As Appellant had not fulfilled requirements of either getting licence/scrip transferred to it or producing it at time of clearance as required under exemption notifications, Appellant is not entitled to benefit of exemption notifications – Duty can be demanded from importer where fraudulent or forged licences/scrips are used to clear goods even if importer itself has not committed fraud, because ‘fraud vitiates everything’ – Confirmation of demand invoking extended period of limitation is sustained – Since Appellant was not a bonafide buyer of duty free scrips/licences, penalty imposed under Section 114A of the Act is also sustained – Appeals are dismissed

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