2002 (7) TMI 268 - Commission - Central Excise

Settlement Commission Rejects Applications Due to Misdeclaration & Obstruction

IN RE: SUREN INTERNATIONAL LTD.

The Settlement Commission rejected the applications as the case involved gross mis-declaration and smuggling beyond its jurisdiction. The applicants ... Settlement of case - Application of Settlement of case Issues Involved:1. Eligibility of Applicants for Settlement Commission2. Full and True Disclosure Requirement3. Jurisdiction and Scope of Settlement Commission4. Complexity and Nature of Investigation5. Conduct of Applicants During InvestigationDetailed Analysis:1. Eligibility of Applicants for Settlement Commission:The applicants, including a company and its directors, filed applications for settlement regarding six Bills of Entry and a show cause notice (SCN). The main applicant accepted an amount of Rs. 6,01,249/- as payable, with the total duty involved being Rs. 32,01,488/-. The Customs Authorities seized 17 containers of imported goods, leading to further investigation and the issuance of an SCN under Section 110(2) of the Customs Act for extending the period for issuing the SCN by another six months.2. Full and True Disclosure Requirement:The applicants filed an amended application accepting an additional duty of Rs. 1,76,01,382/-, totaling Rs. 2,15,95,729/- for eight Bills of Entry. They claimed discrepancies in the weight and description of goods due to supplier mistakes and accepted additional duty liabilities. However, the Revenue objected, stating that the applicants had not made a full and true disclosure of their duty liability, as required under Section 127B of the Act. The Revenue highlighted that the applicants were disowning goods imported in their name and projecting themselves as rescuers for suppliers abroad, which did not amount to full and true disclosure.3. Jurisdiction and Scope of Settlement Commission:The Revenue argued that the case involved non-declaration and concealment of goods, constituting smuggling and fraud, which fell outside the purview of the Settlement Commission under Sections 127B and 127C of the Act. The Commission agreed, citing the judgment of the Hon'ble Madras High Court in the case of Commissioner of Customs (AIR), Chennai v. Customs and Central Excise Settlement Commission, which held that gross mis-declaration and smuggling did not relate to levy, assessment, or collection of Customs duty and were outside the Settlement Commission's jurisdiction.4. Complexity and Nature of Investigation:The Customs Authorities' investigation extended beyond the 40 containers to 1450 containers imported by the applicant since 1998. The investigation involved examining suppliers, shipping lines, negotiating banks, and clearing agents. The Commission found that the investigation's complexity and the need for thorough inquiries justified allowing the Customs Authorities to complete their investigation without interference from the Settlement Commission.5. Conduct of Applicants During Investigation:The applicants were found to have been non-cooperative during the investigation, with pending prosecutions for non-compliance with summonses. The Jurisdictional Commissioner reported that the applicants had lodged false complaints and engaged in obstructive behavior, casting serious doubts on their bona fides. The Commission noted that the applicants' conduct and the need for extensive investigation warranted rejecting the applications for settlement.Conclusion:The Settlement Commission rejected the applications, concluding that the case involved gross mis-declaration and smuggling, which were outside its jurisdiction. The applicants had not made full and true disclosures, and the complexity of the investigation required allowing the Customs Authorities to complete their inquiries. The applicants' obstructive conduct further justified the rejection of their applications.