M/s Munjal Showa Ltd Vs Union of India & Ors(Supreme Court)

Date-23rd September, 2022

Sub-Whether extended period of limitation can be invoked where DEPB license on the basis of which import duty exemption was claimed were fake licenses?

In this case, the division bench of Hon’ble Supreme Court was called upon to decide regarding the Custom duty liability in pursuance of a discovery that the DEPB scrips were forged and thus the importer had to deposit the appropriate duty with interest. While the importer deposited the said amount, however contested the liability on the pretext that there was no element of fraud as it had no knowledge and thus extended period of limitation could not have been invoked. Having lost upto high court, the Supreme Court while deciding the SLP held that 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 and whether the buyer(s) had a knowledge about the fraud or the forged / fake DEPB licenses/Scripps and whether the appellant(s) – buyer(s) was/were to take requisite precautions to find out about the genuineness of the DEPB licenses/Scripps which they purchased, would have a bearing on the imposition of the penalty, and has nothing to do with the duty liability.

Thus the SLP was dismissed. This judgement reminds similar things which used to happen when fake TDS certificates were used by unscrupulous assessees to claim income-tax refunds.

Ramesh Patodia
24-09-2022