Tribunal reinstates license for Flemingo DFS Pvt Ltd, citing settled allegations not grounds for revocation.

The Tribunal allowed the appeal by M/s Flemingo DFS Pvt Ltd, setting aside the denial of license renewal and cancellation based on resolved allegations of clandestine removal of goods, shortfall in warehoused goods, burglary incidents, and evasion of customs duty. The Tribunal held that settlement of disputes cannot be a ground for license revocation and ordered restoration of the license, granting consequential reliefs to the appellant.

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Issues Involved:
1. Clandestine Removal of Goods at Chennai Sea Port
2. Shortfall in Warehoused Goods at Goa International Airport
3. Burglary Incident at Chennai Bonded Warehouse
4. Evasion of Customs Duty at Vishakhapatnam Port
5. Renewal and Cancellation of Private Bonded Warehouse License

Summary:

1. Clandestine Removal of Goods at Chennai Sea Port
The appellant, M/s Flemingo DFS Pvt Ltd, was accused of clandestine removal of goods by forging documents and making false declarations, leading to a revenue loss of Rs. 3.88 crores. A Show Cause Notice was issued on 10.01.2007. The appellant approached the Settlement Commission, which settled the duty liability at Rs. 82,25,502.45, granting immunity from fines, penalties, and prosecutions. The High Court upheld this settlement, dismissing the department's writ appeal. The Tribunal held that the settlement of the dispute cannot be a ground for not renewing or revoking the license.

2. Shortfall in Warehoused Goods at Goa International Airport
A Show Cause Notice was issued demanding Rs. 96,66,209 for a shortfall in warehoused goods at the appellant's Duty Free Shop at Goa International Airport. The Tribunal, in 2018 (361) E.L.T. 742 (Tri-Mumbai), set aside the demand, holding that the theft incident did not occur due to any improper removal of goods by the appellant. The Tribunal emphasized that the appellant had insured the goods for customs duty, thus no duty could be recovered from them.

3. Burglary Incident at Chennai Bonded Warehouse
In April 2011, goods involving a duty amount of Rs. 3,17,701 were stolen from the appellant's warehouse in Chennai. The appellant lodged a police complaint and received a 'not traceable certificate.' There was no involvement of the appellant's staff. The department directed the appellant to shift the shop to a more secure area, which was complied with.

4. Evasion of Customs Duty at Vishakhapatnam Port
The appellant was accused of evading customs duty by forging and falsifying records at their Duty Free Shop in Vishakhapatnam Port. After adjudication, the demand was confirmed, but upon appeal, the Tribunal in 2018 (363) E.L.T. 450 (Tri-Hyd) set aside the duty demand and ordered the restoration of the appellant's license within one month.

5. Renewal and Cancellation of Private Bonded Warehouse License
The appellant's license was periodically renewed based on High Court orders until 07.07.2011. The present Show Cause Notice dated 07.11.2011 proposed to reject the renewal request and cancel the license. The Commissioner of Customs denied the renewal and ordered the cancellation of the license. The Tribunal found that all allegations raised in the Show Cause Notice had been resolved in favor of the appellant, thus there were no grounds to deny the renewal or cancel the license.

Conclusion
The Tribunal set aside the impugned order, allowing the appeal with consequential reliefs. The order pronounced in open court on 31.07.2023, concluded that the department could not deny the renewal request or cancel the license based on resolved allegations.

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