One of our clients has been importing goods from outside India. Custom Duty is paid through DEPB licneces. The client purchases the licences from the clearing agent who get the goods cleared from customs. After five years it is dedected by the custom authorities that the licences used to pay the custom duty are fake or the amount of duty entitlements have been changed/ enhanced. This could not have beend done without the connivence of the staff at customs. What is the liabilities of the importer. Can he take the shelter that he had purchased the licence after payment and how the fraud can go without the knowledge of the custom authorities for a long time and custom officers are also involved in the wrong doing.
In such cases the department generally issues a SCN to the importer for demanding duty with interest and would propose to impose penalty. Since your client is a bonafide purchaser, he would acquire valid title to the DEPB licence, which is in the nature of goods. It cannot be questioned or revoked at a later date, applying the general principles of contract law and sale of goods law. In fact there are few decisions available on this point in favor of such bonafide importers. They can also take the plea of time bar if the import was done five years back.