Per M. Veeraiyan : After hearing both sides for some time on stay petitions, we felt that the appeal itself could be decided finally, and accordingly we waive pre-deposit of the dues as per the order-in-original and proceed to dispose of the appeal.

2. The relevant facts, in brief, are as follows:-

(i) The appellant company M/s. Munjal Showa Ltd. imported consignments through ICD Ballabgarh using transfer release advices (TRA) issued by Mumbai Customs House.

(ii) The Customs authorities, Ballabgarh initiated verification with the Mumbai Customs authorities and came to know that the DEPB licences based on which TRAs were issued by them were not genuine and the results of this verification were communicated to the appellant company and thereupon the appellant company paid the duty amounting to Rs. 1,29,43,927/- on 12th August, 2003.

(iii) Show cause notice dated 3rd October, 2006 was issued proposing confirmation of the duty paid as above and proposing penalty on the company, on Shri K. Chakravorty, Senior Divisional Manager (Commercial) and Shri Kanwaljeet Singh, Junior Officer (Commercial) of the appellant company.

(iv) Commissioner vide his order dated 17.10.2007 confirmed the duty demand; imposed penalty of equal amount under Section 114A of the Customs Act. He also imposed redemption fine of Rs. 10 lakhs in lieu of confiscation of the goods cleared without payment of duty against invalid DEPB scrips. He also imposed a penalty of Rs. 1 lakh on Shri K. Chakravorty and Rs. 50,000/- on Shri Kanwaljeet Singh. There is also a demand of interest amounting to Rs. 3,20,378/-.

3. The learned advocate for the appellants submitted that they were victims of circumstances. They have procured the DEPB licences from the market through brokers on payment of normal consideration. They have made payment through cheques and these cheques have been encashed and debited from their company's bank accounts. The original authority has imposed penalties on the appellants only on the basis of presumptions. He has relied on the statements of one Shri Bishnoi, the broker who disowned any dealing of the tainted DEPB scrips. The appellants wanted the said Shri Bishnoi to be cross-examined before the adjudicating authority and the same had been rejected. He also submits that the appellants were not knowing that DEPB scrips were forged and they had no intention to evade Customs duty. Therefore, he assailed the demand on limitation as well.

4. The learned Joint CDR submits that fraud vitiates every transaction; that a fraud inter-vivos stands on a different footing from a fraud against the State. The appellant company has not proved that they were bona fide purchasers of DEPB scrips. But for the intervention by the department, the fraud would have gone unnoticed causing heavy damage to the revenue and that the appellants have taken calculated risks. He submits that in the given facts and circumstances of the case not only duty is liable to be confirmed, penalties are also warranted on the appellants and that redemption fine imposed is also justified. He also relies on the decision of the Tribunal in the case of M/s. New Kailash Jewellery House Vs. CCE, New Delhi reported in 2006 (206) 1046 in support of his contention that the fraud against the State requires to be treated differently from fraud intervivos.

5. We have carefully considered the submissions from both sides. We take note of the fact that immediately on communication of the results of verification by the Customs authorities, the appellant company paid on 12th August, 2003 the entire duty involved. The appellants claimed that they have purchased the scrips through the broker Shri Bishnoi which has been denied by the said agent. We find that the appellants have entered into transactions for purchase of the DEPB scrips with M/s. ACME and Ankur Impex, Mumbai both of whom are reportedly not traceable. They have made payments to these firms by cheques. It is their contention that Mr. Bishnoi also acted a