2001 (8) TMI 1324 - Commission - Customs

Immunity granted by Settlement Commission under Customs Act and IPC for duty liability after full disclosure

IN RE: EMJAY CREATIONS

IN RE: EMJAY CREATIONS - 2007 (219) E.L.T. 776 (Sett. Comm.) Issues Involved:1. Misdeclaration of goods and classification under incorrect Customs Tariff Heading.2. Confiscation of goods under Section 111(m) of the Customs Act, 1962.3. Imposition of penalty under Section 112(a) of the Customs Act, 1962.4. Communication and receipt of the order-in-original by the applicant.5. Settlement of duty liability and request for immunity from prosecution, penalty, fine, and interest.Issue-wise Detailed Analysis:1. Misdeclaration of Goods and Classification under Incorrect Customs Tariff Heading:The applicant, M/s. Emjay Creations, filed a Bill of Entry for the clearance of synthetic fabrics under Customs Tariff Heading (CTH) No. 6002:43. However, upon examination, it was revealed that the goods were actually four-way spandex velvet fabrics classifiable under CTH 6001:92. The declared quantity and weight were also found to be significantly less than the actual quantity and weight. The total quantity was 17,706 yards (16,190 meters) against the declared 10,447.75 meters, and the net weight was 6,150 kgs against the declared 4,200 kgs.2. Confiscation of Goods under Section 111(m) of the Customs Act, 1962:A show cause notice was issued to the applicant, proposing the confiscation of the goods under Section 111(m) of the Customs Act, 1962, due to the misdeclaration of the description and quantity of the imported goods. The notice also proposed the imposition of a penalty.3. Imposition of Penalty under Section 112(a) of the Customs Act, 1962:The show cause notice also proposed the imposition of a penalty on the applicant under Section 112(a) of the Customs Act, 1962. The applicant admitted the additional duty liability and filed an application before the Settlement Commission, admitting the payable duty amount of Rs. 10,05,654/-.4. Communication and Receipt of the Order-in-Original by the Applicant:The Settlement Commission considered whether the order-in-original had been communicated to the applicant before the submission of the application to the Settlement Commission. The Revenue provided details of the issuance and despatch of the order-in-original, indicating that it was despatched on 9-1-2001, and the application to the Settlement Commission was filed on 10-1-2001. The Commission observed that it was not clear whether the order had been received by the applicant, and thus, the application was allowed to proceed.5. Settlement of Duty Liability and Request for Immunity:The applicant admitted the entire duty liability of Rs. 10,05,654/- and paid the same. The applicant also executed a bond equal to the value of Rs. 18 lakhs. The applicant's advocate submitted that the applicant had made a full and true disclosure and cooperated with the Commission, requesting immunity from prosecution, penalty, fine, and interest.Final Judgment:The Settlement Commission, after examining the records and submissions, concluded that the applicant had made a full and true disclosure and cooperated with the proceedings. Consequently, the applicant was granted immunity from prosecution under the Customs Act, 1962, and the Indian Penal Code. The applicant was also given immunity from the imposition of penalty, fine, and interest. The order of settlement was contingent upon the applicant's full and true disclosure; any fraud or misrepresentation would render the order void. All concerned parties were to be informed accordingly.