TaxTMI 
TaxTMI 
2007 (9) TMI 477
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.... this Bench. The Admission Hearing in respect of the applications filed by the applicant and co-applicant Nos. 1, 2, 3 and 4 was held on 28-6-2007. During the hearing, the representative of the Revenue submitted that in the instant case, one co-applicant (viz., co-applicant No. 4) is an absconder. 3.1 The Bench, vide Admission Order No. 165/CUS/MGR/2007 dated 13-7-2007, observed that provisions of Settlement Commission in Chapter XIVA of the Customs Act, 1962 do not bar an application from a COFEPOSA detenue or an absconder. From sub-section (7) of Section 127C it is clear that an applicant could represent before the Settlement Commission himself or through a Authorised Representative. It is, therefore, clear that an applicant's so called abscondance cannot be a bar to entertain his application by the Settlement Commission as held consistently by the Commission. If there is a case for levy, assessment and collection of duty, a Bill of Entry and a Show Cause Notice related to the Bill of Entry is also present along with a true disclosure of the duty liability then the case has to be admitted, howsoever be the fraudulent nature of the case. Howsoever, grave the manipulations ma....
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....has paid total amount of Rs. 44,80,835/- vide three pay Order No. 033653 dated 26-6-2007 for Rs. 24,25,357/- 033654 dated 9-6-2007 for Rs. 12,77,199/- and 033655 for Rs. 7,78,279/- on 29-6-2007 as directed by the Settlement Commission. It reiterated that the co-applicant (No. 4) has not disclosed to the Commission that COFEPOSA Detention Order is pending for execution against him. As per Section 127B of the Act, the applicant/co-applicant has to disclose full facts of the case in his application before the Commission which had not been adhered to in this case. It also submitted that co-applicant No. 4 never appeared before the investigating agency and has not co-operated in the investigation. The said co-applicant No. 4 has never been examined by DRI during the investigation, nor has he made any disclosure of his role in the offence. He is seeking immunity only on the plea that if the case against the main applicant is settled, his application may also be settled granting immunity to him also from all charges. Even the veracity/authentication of the signature of the co-applicant No. 4 said to be signed in the application form cannot be verified/c....
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....ng of settlement in the interest of revenue by the Commission. However, in cases of outright smuggling/misdeclaration wherein there is suppression of true disclosure by the applicant vis-a-vis their knowledge/involvement and more particularly wherein the Detention Order has been issued and is pending execution against the applicant, such case may not be considered for admission and no relief/immunities from fine, penalty and prosecution may be granted to such unscrupulous applicants. 4.4 The Revenue further submitted that the applicant had misdeclared the goods exported as H Acid, a high value chemical as against actual goods, viz., potassium chloride, a low value item solely for the purpose of availment of DEPB benefit fraudulently to the tune of Rs. 16,40,616/- in 8 export consignments. The fact remains that it was a fraud committed by the applicant and the actual goods meant for export were illegally diverted into local market for profit. It may be a fact that in the demanding Paras of Show Cause Notice the DEPB amount of Rs. 16,40,616/- to be recovered from the applicant is not mentioned. However, the misuse of DEPB, inasmuch as how the noticee had commi....
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....Shri Jacob Abraham, SIO, DRI, Mumbai and Shri Nitin Dhruve, IO, DRI, Mumbai. The ld. Advocate of the applicant submitted that the issues required to be settled during this Final Hearing are as follows :- (I) Issue of Duty Liability, (II) Issue of immunity from interest, (III) Issue of immunity from Fine, Penalty and Prosecution. I. Regarding issue of Duty Liability: 1. The case in the SCN issued to the applicant is of fraudulently obtaining of DEEC and DEPB licences and erroneous availment of credit facilities thereunder. 2. The alleged violations are contained in para 36 of the SCN (pg. 43) and the paras that follow. They may be enumerated thus, also setting out the admissions made by the applicant. (i) The applicant misdeclared the goods exported by it as high value chemicals, whereas they were actually low value chemicals. On the basis of such misdeclared exports, the applicant obtained DEPB from the DGFT, which was subsequently cancelled by the DGFT itself. The DEPBs so obtained were utilized by the applicant to ....
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....Nagpur v. Ankit Pulp & Boards Pvt. Ltd reported in 2007 (209) E.L.T. 135 in support of these submissions. (c) He further submitted that proviso to Section 23(2) would also not act as a bar to exercise the right to relinquish the title to the goods for the following reasons: (i) The proviso to Section 23(2) was inserted vide Finance Act, 2006 only w.e.f. 18-4-2006. To make the duty payable on the goods imported prior to the date of insertion of this 'proviso', the Revenue cannot snatch away the substantive vested right of the applicant to relinquish the title to the goods, which crystallized and accrued since the date of importation of the goods, by applying the amendment retrospectively. Reliance is placed on Section 6(c) of the General Clauses Act, 1897, which reads as under - "6. Effect of Repeal. Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not, (c) affect any right, privilege, obligation, or liability acquired, accrued or incurred un....
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....er question were covered by a valid import licence. The subsequent cancellation of licence is of no relevance nor does it retrospectively render the import illegal. He, therefore, requested that the applicant be allowed to relinquish the title to the goods with consequent benefits. The ownership of seized goods, on allowing the relinquishment of title to the goods, will rest with the Central Government and therefore question of duty liability on these goods will not arise. II Regarding issue of immunity from interest : He prayed for grant of immunity from interest, and submitted as under :- (i) It may please be appreciated that the Notification No. 51/2000-Cus. dated 27-4-2000 issued under Section 25(1) of the Act, under which the exemption was availed and the bond was executed by the Applicant, specifically provides for interest liability at a specified rate, and therefore in light of the judgment dated 8-9-2006 of a Division Bench of Hon'ble Madras High Court in the matter M/s. SLS Exports Pvt Ltd. v. Customs & Central Excise Settlement Commission, Chennai in WP No. 18607 of 2005, the Hon'ble Commission had powers to grant immunity from inte....
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....red by the bond as contractual." "7........Therefore any interpretation which curtails or restricts the jurisdiction of the Settlement Commission should be avoided. It is well settled that in selecting out of different interpretations, the Court will adopt that which is just, reasonable and sensible rather than one leading to uncertainty. In the present case, the interest payment is due to non-fulfillment of export obligations under the notification. The notification is also a law relating to levy of Customs duty and interest liability has been created under this notification. Thus, the Settlement Commission has power with regard to the waiver of interest under the notification." (iv) The Hon'ble Bombay High Court in the matter Tanu Healthcare Ltd. v. Union of India reported in 2007 (207) E.L.T. 641 referred the aforesaid decision of Single Judge of Hon'ble Kolkata High Court, while declining to reduce the interest @ 15% imposed by this Hon'ble Commission. However, it may please be appreciated that the aforesaid judgment of Division Bench of Hon'ble Madras High Court was not brought to the Notice of Hon'ble Bombay High Court. (v) This Hon'ble ....
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....0, and after considering and analyzing the judgment of Hon'ble Calcutta High Court, expressed its disagreement with proper and appropriate reasoning. This Hon'ble Commission may please exercise its judicial freedom in considering the conflicting views reflected by different High Courts and may adopt the one considered more appropriate to the facts of the instant case. (x) Since the applicants have extended full co-operation in the Settlement Proceedings, he requested that complete immunity from interest may please be granted. (xi) Without prejudice, the applicants in respect of the seized goods which are lying at port, and the title to which has now been relinquished by the applicant, submit that no interest is payable on these goods as the same have not been cleared from customs, and moreover, since now, the title would rest with Central Government there would be no duty payable, consequently there would be no question of any interest. III Regarding issue of immunity from Fine, Penalty and Prosecution : In view of the full cooperation extended by the applicant, with the settlement proceedings, and full and true disclosure of duty liabil....
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...."5.....the fact of payment of duty in the cases detected against these per sons may act as a deterrent against their chance of indulging in similar prejudicial activities in future since this may adversely affect their financial backbone..." The said judgment of Hon'ble Supreme Court clearly shows that the payment of Customs Duty itself would act as deterrent. Moreover there is no allegation that this applicant has been found indulged in any prejudicial smuggling activities after issuance of the instant Show Cause Notice. It may please be appreciated that the fact of payment of duty liability, itself would act as deterrent. He further submitted that the co-operation extended in the Settlement Proceedings, and the aforesaid position as per the decision of Hon'ble Supreme Court, may please be considered, while deciding the issue of grant of immunities from penalty (under Customs Act) and prosecution (under Customs Act, & IPC). He prayed for complete immunity from penalty (under the Customs Act), and from prosecution under the Customs Act, 1962 and Indian Penal Code. REGARDING OTHER CO-APPLICANTS : He submitted that the co-applicants are apologetic and have chosen the path of com....
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.... is the son of Shri Yusuf Dhanani and partner in M/s. Sana International and an absconder under COFEPOSA was aiding and abetting Shri Yusuf Dhanani and purely acted on the directions of Yusuf. Even if he is caught now and interrogated after such a laps of time he may not in all probability be able to throw any further light more than what Shri Yusuf Dhanani has brought out, thanks to the tutoring that he (Sarfaraz) must have received by this time. The incident is also of 2001 and in remote past. We also see even though some of the persons concerned were arrested, no criminal complaint seems to have been filed all these years which could have run concurrently with the COFEPOSA orders. Revenue could also not emphatically inform as to whether Sarfaraz has been declared as a proclaimed offender under the Criminal Procedure Code. The Revenue has made a plain plea that the applicant absconder's signature may not be authentic but has made no verification on this score. In case the Revenue at a later date confirm that the signature of this co-applicant was not genuine then the immunities granted could be withdrawn for false evidence as per Section 127H(3). He could also be proc....
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.... the title at this late stage before the Commission and that too, after issue of the Show Cause Notice. The goods are still under seizure. We, at the stage of admission itself, did not agree for the relinquishment of the title and sought from the applicant the duty on this score. It is also to be noted that the relinquishing of the title before home clearance could have been possible if the other things had been proper, where in the normal course of business, an importer abandons the goods - the reasons could be several for doing so like cancellation of the purchase order, wrong delivery of the goods, payment disputes etc. Here, we have a case where the import took place in the year 2001 and till date there was no relinquishing of title No order for home clearance could have been made in the case as the goods were under investigations. The importer could have got them provisionally released on payment of duties and other terms and conditions of the Revenue. The case laws cited by them did not have a situation like this before them when those decisions were made. An order for home clearance was not possible in this case due to the fraudulently obtained DGFT Licences and ....
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....und of co-operation, payment of duties etc. 9(a) The case before us is a case of fraudulent obtaining of licences and undue duty benefits by way of custom duty concessions. The consignments vide Bill of Entry's dated 27-7-2001, 30-7-2001 and 3-8-2001 were all imported on the fraudulently obtained advance licences wherein duty benefits were unduly availed. The goods are liable for confiscation and in their absence fine is called for. Interest is also leviable from the due date till the date of the duty payment. Full duties has been paid on these Bill of Entries. 9(b) The other consignments imported vide Bill of Entry dated 17-9-2001, 17-9-2001 and 18-9-2001 which have been not allowed to be relinquished and on which a duty of Rs. 20,55,478/- have already been paid is also liable for confiscation. However, the goods are long in custody, must have deteriorated and still under seizure. A token fine in lieu of confiscation would do. Interest also is to be waived as the goods have been not yet cleared and are under seizure. 9(c) Fine in lieu of confiscation is also called for, for the imports made on fraudulently obtained DEPBs for which import duty of Rs. 2,58,582/- wa....