Customs Duty Case Settled: Reduced Penalties, 10% Interest on Delay, Partial Immunity Granted; Fraud Voids Settlement.

IN RE: UNIVERSAL EXPORTS

IN RE: UNIVERSAL EXPORTS - 2007 (220) E.L.T. 995 (Sett. Comm.) Issues Involved:1. Issue of Duty Liability2. Issue of immunity from interest3. Issue of immunity from Fine, Penalty, and Prosecution4. Admission of the application of a COFEPOSA absconderDetailed Analysis:1. Issue of Duty Liability:The main contention revolves around the fraudulent obtaining of DEEC and DEPB licenses and the erroneous availment of credit facilities. The applicant admitted and paid the duty liabilities of Rs. 2,58,582/- for the misdeclared exports and Rs. 21,66,775/- for imports under misdeclared DEEC licenses. However, the duty liability of Rs. 20,55,478/- for imports under Advance Licenses was contested on the grounds of relinquishment of title to the goods. The Bench, however, did not agree with the relinquishment at this stage, as the goods were still under seizure and the fraudulent nature of the licenses precluded a bona fide abandonment. Thus, the duty liability of Rs. 44,80,835/- was settled.2. Issue of Immunity from Interest:The applicant sought immunity from interest based on various judicial precedents, including a stay order from the Supreme Court in a similar case. The Bench acknowledged the differing views of various High Courts but decided to grant partial waiver from interest, imposing a 10% interest rate on the delayed payment of duties, excluding the duty component for the seized goods.3. Issue of Immunity from Fine, Penalty, and Prosecution:The Bench considered the full cooperation of the applicants in the settlement proceedings and the payment of duties. However, given the fraudulent activities, full immunity from penalties was not granted. Specific penalties were imposed on key individuals, such as Rs. 5 lakhs on Shri Yusuf Dhanani and Rs. 3 lakhs on Shri Sarfaraz Dhanani. Immunity from prosecution under the Customs Act was extended to all applicants, subject to the payment of interest, fines, and penalties. For Shri Sarfaraz Dhanani, this immunity was conditional on his non-involvement in prejudicial activities for one year.4. Admission of the Application of a COFEPOSA Absconder:The Bench addressed the issue of admitting the application of Shri Sarfaraz Dhanani, a COFEPOSA absconder. It was noted that there is no legal bar for admitting his application, and the apprehension of the Revenue regarding the potential quashing of the Detention Order was deemed unfounded. The Bench admitted his application but decided not to grant full immunities due to his absconder status, indicating partial guilt.Conclusion:The Settlement Commission settled the case with the following terms:- Customs Duty settled at Rs. 44,80,835/-.- Interest at 10% on the delayed payment of duties.- Partial waiver of fines and penalties, with specific amounts imposed on key individuals.- Immunity from prosecution under the Customs Act, subject to conditions for certain applicants.- The order is void if obtained by fraud or misrepresentation of facts.All concerned parties were informed accordingly.