2007 (6) TMI 463 - Commission - Customs

Applicants win case against Department for lack of evidence, granted immunities and pay interest on duty liability.

IN RE: FLEMINGO (DFS) PVT. LTD.

IN RE: FLEMINGO (DFS) PVT. LTD. - 2008 (226) E.L.T. 289 (Sett. Comm.) Issues Involved:1. Allegation of non-matching signatures on sales bills.2. Compliance with customs regulations and duty-free shop procedures.3. Onus of proof and requirement of expert verification.4. Immunities sought by the applicants.Detailed Analysis:1. Allegation of Non-Matching Signatures on Sales Bills:The primary dispute revolved around the allegation that the signatures on 3004 sales bills did not match the signatures available with the Department. The applicants contended that the regulations did not require them to verify customer signatures against those in the customs declaration forms, which were solely in the possession of the customs department. The applicants argued that the onus was on the Department to prove the mismatch through expert verification, which was not done. The Department's visual comparison was deemed insufficient by the applicants.2. Compliance with Customs Regulations and Duty-Free Shop Procedures:The applicants maintained that they complied with all the requirements of the Facility Circular No. 6 dated 11-3-2005, including ensuring that the sales bills were signed by the crew members. They argued that the regulations did not specify the need for signature verification. The applicants also highlighted that the goods were delivered on board the ship under customs escort, and there was no allegation of non-compliance in this regard. The Department's claim that the bond officers signed the escort reports on a weekly basis was countered by the applicants, who provided copies of the escort reports as evidence.3. Onus of Proof and Requirement of Expert Verification:The applicants argued that the Department should have sought the opinion of a forensic or handwriting expert to verify the signatures. The Department's reliance on visual comparison was challenged, with the applicants asserting that such a method was inadequate for proving forgery. The judgment noted that the Department did not obtain statements from the buyers whose signatures were disputed, nor did they seek expert opinion, thus failing to provide concrete evidence to support their allegations.4. Immunities Sought by the Applicants:The applicants requested immunities from interest, fine, penalty, and prosecution. The judgment settled the duty liability at Rs. 82,25,502.45, which the applicants had already paid. However, the applicants were required to pay simple interest at 10% per annum on the admitted duty liability from the date of sale until the actual payment. The judgment granted immunity from fine, penalty, and prosecution under the Customs Act and other Central Acts to both the main applicants and the co-applicants.Conclusion:The judgment concluded that the Department's allegations were based on presumptions and lacked tangible evidence. The applicants had complied with the required regulations, and the Department failed to prove the allegations of forgery and diversion of goods to the local market. The total duty liability was settled at the admitted amount, and the applicants were granted the requested immunities, subject to the payment of interest. The settlement would become void if it was later found that any material particulars were withheld or false evidence was provided.