Settlement Commission grants immunity in cigarette smuggling case under Customs Act

The Settlement Commission in Mumbai granted immunity from prosecution to applicants involved in a cigarette smuggling case. The applicants admitted to duty liability and settled the matter under Section 127B of the Customs Act. The settlement terms included a personal deposit, adjustment of duty liability, fines for attempted smuggling, and penalties. Immunities were granted under Section 127H, with a caution against fraud. The settlement allowed for the refund of the balance amount from the sale proceeds after adjustments, ensuring compliance with the conditions set forth.

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Issues: Smuggling of cigarettes, attempted concealment, duty evasion, settlement application under Section 127B, grant of immunities, penalty imposition, final settlement terms.

The judgment by the Settlement Commission, Mumbai, involved the admission and disposal of applications filed by the applicant and co-applicant regarding the attempted smuggling of cigarettes concealed among electronic consumables in a container. The officers of the Directorate of Revenue Intelligence (DRI) located the container and seized 31080 cigarette packets and 31680 Radio Cassette Recorders. The JNCH assessed the duty on the seized items, leading to a Show Cause Notice proposing confiscation, duty demands, and penal provisions against the applicants. The applicants filed settlement applications under Section 127B of the Customs Act, admitting the duty liability of Rs. 14,26,504.24 as demanded in the notice.

During the admission hearing, the applicants' representative submitted that the duty on the seized items had been paid partially and requested final settlement. The Revenue had no objection to admission and disposal of the case. The applicants sought immunities from fine, interest, and penalties, attributing the incident to a mistake by the overseas supplier. However, the Revenue contended that the applicants knowingly participated in the smuggling scheme, opposing the grant of immunities. The Bench considered the submissions and observed that the applicants fulfilled the conditions under Section 127B, allowing the case to proceed under Section 127C(1).

The Bench settled the case under Section 127C(7), with the applicant depositing Rs. 8,00,000 as personal deposit and adjusting the duty liability against it. The settlement terms included adjusting the balance duty from the sale proceeds of the seized items, fixing interest liabilities, imposing fines for attempted smuggling, and penalties on the applicants for their involvement. Immunity from prosecution was granted under Section 127H. After adjustments, the balance amount from the sale proceeds was to be refunded to the applicant, with a caution that the settlement would be void if obtained through fraud or misrepresentation. All concerned parties were informed accordingly about the settlement terms and conditions.

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