Steel manufacturer granted immunity from penalties for using forged licenses under Customs Act, 1962

The Settlement Commission for Customs and Central Excise granted a steel manufacturing company immunity from interest, confiscation, penalty, and prosecution under the Customs Act, 1962. The company, accused of using forged DEPB licenses and TRA in importing goods, claimed innocence, stating they purchased the licenses in good faith. The Commission considered them as innocent victims of criminal activities, acknowledging their lack of knowledge or participation in the forgery. The settlement terms fixed the duty liability at Rs. 6,78,762, which was already paid, and allowed the settlement to proceed under specified provisions of the Customs Act.

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Issues: Settlement of case involving forged DEPB licenses and TRA, liability to pay customs duty, immunities from interest, confiscation, penalty, and prosecution.

In this judgment by the Settlement Commission for Customs and Central Excise, the applicant, a steel manufacturing company, sought settlement regarding a Show Cause Notice issued by the Directorate of Revenue Intelligence for using forged DEPB licenses and TRA in importing goods. The applicant imported Steel Scraps for manufacturing finished goods using DEPB licenses purchased from the market. The investigation revealed the forged nature of the licenses and TRA, leading to a demand for customs duty payment of Rs. 6,78,762, with proposed confiscation of goods and penalties. The applicant claimed innocence, stating they purchased the licenses in good faith and had already paid a portion of the demanded amount during the investigation. They expressed willingness to pay the duty but sought immunities from interest, confiscation, and penalty.

During the hearing, the applicant's advocate highlighted the company's bonafide belief in purchasing the licenses, already paying a significant amount of the duty demanded, and requested immunity from interest based on precedents. The Commission noted that while the applicant was not directly involved in the forgery, being the importers, they were liable to pay the duty. The Commission granted immunity from interest, considering the applicant as an innocent victim of criminal activities, having no knowledge or participation in the forgery. The settlement terms included fixing the duty liability at Rs. 6,78,762, which was already paid, granting immunity from interest, confiscation, penalty, and prosecution under the Customs Act, 1962.

The settlement was allowed to proceed under Section 127C(1) of the Customs Act, 1962, and finalized under sub-section (7) of Section 127C. The terms specified that the settlement would be void if obtained through fraud or misrepresentation. Immunities were granted under Section 127H(1) of the Customs Act, 1962, with attention drawn to the provisions of sub-sections (2) and (3) of Section 127H regarding the settlement's validity and consequences of misrepresentation.

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